On July 11th, 2023, the Special Investigative Unit of RJN Investigations, Inc. was recently notified regarding the successful prosecution in the case of People of California vs. B. Groscost and F. Koltsov. According to the press release issued by the California Department of Insurance, “These co-conspirators allegedly ordered screening and prescriptions for injured workers in order to enrich themselves, not to protect their patients,” said Insurance Commissioner Ricardo Lara. “By investigating fraud, my department is helping keep insurance costs down for all of California consumers and businesses.” From 2014 through 2017, Groscost operated five workers’ compensation clinics in Southern California doing business as DSJ Management, Inc., in Fountain Valley, California. Groscost controlled treatment, referrals, medical and financial records at the clinics even though he was not licensed to practice medicine. The Department of Insurance investigation with the assistance of the National Insurance Crime Bureau discovered that Groscost allegedly received approximately 2.1 million dollars in kickbacks from Koltzov, owner of LFPS, Inc. and Resource Pharmacy, Inc., for patient referrals for urine drug screening and compound cream prescriptions. Koltzov’s company billed workers’ compensation insurance carriers multi million dollars for these claims. The investigation also revealed that Groscost allegedly failed to report employees to the Employee Development Department (EDD) and paid them as independent contractors. He failed to report over 5.1 million dollars in wages to EDD and as a result, avoided paying over $510,000.00 in taxes. “On behalf of our client, the RJN SIU provided pertinent reports and billing data to assist in the criminal investigation. After attending over fifteen criminal hearings at the Orange County Superior Court, both suspects entered into a plea-bargaining agreement. B. Groscost was then sentenced to one year in County Jail, two years probation and ordered to pay restitution. F. Koltzov was then sentenced to one year probation and also ordered to pay restitution. Full restitution was made payable to various insurance companies operating in California, including our client that received a certified check in the amount of $8,638.00.
ABOUT R.J.N. SIU:
Formed in 1996, the RJN SIU Division was created to assist California employers, governmental agencies, insurance carriers and TPA firms in securing professional assistance so as to detect, investigate and prosecute insurance fraud. To date, the unit has trained well over 4,000 examiners and the documented referrals by this unit have resulted in over 235 convictions for workers’ compensation insurance fraud in California. In just the last 4 years, we have secured $1,651,197.00 in court ordered restitution on behalf of our valued clients.
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