Drobot To Start Serving 63-Month Prison Sentence in June

Monday, January 15, 2018 | 0

Michael D. Drobot will serve five years, three months in prison for overseeing a $500 million workers’ compensation fraud scheme for 15 years, under a sentence handed down by U.S. District Judge Josephine L. Staton on Friday.

The judge said Drobot, 73, of Corona Del Mar, “introduced greed into the doctor-patient relationship,” according to a press release from the U.S. Attorney’s Office for the Central District of California.

Staton also ordered Drobot to pay a $500,000 criminal fine and to forfeit $10 million to the federal government. He will begin serving his sentence on June 4.

On Wednesday, Stanton signed an order allowing prosecutors to liquidated Drobot’s real estate holdings and sell a 1965 Aston Martin, 1958 Porsche and 1971 Mercedez Benz. 

The federal court has not yet determined how much resitution Drobt must pay to victims of the scheme. A restitution hearing is scheduled for May 11.

Drobot pleaded guilty in 2014 to charges of conspiracy and paying illegal kickbacks. He admitted that he he bribed physicians to induce them to perform thousands of spinal surgeries at Pacific Hospital of Long Beach. He also admitted bribing state Sen. Ron Calderon to preserve so called “pass-through rules” that allowed hospitals to bill workers’ compensation insurers for the full price of hardware and implants used in spinal surgeries.

Calderon is now serving a 3-1/2 year sentence in federal prison after admitting to FBI agents that he took bribes from Drobot.

Prosecutors say Drobot financed the kickbacks with money generated from his sale of medical devices implanted into workers’ comp patients sold by his own medical hardware company, International Implants based in Newport Beach. I2 billed Pacific Hospital and tacked on an additional $250 per device knowing that the “pass-through” law required insurers to pay the full amount of the invoices, prosecutors said.

“Through the operation of I2, (Drobot) generated substantial profits that he used to pay at least $40 million in kickbacks,” prosecutors wrote in court papers. “According to the former CFO of Pacific Hospital, his income, bonuses and other compensation at the hospital was in excess of $20,000,000.”

Drobot typically paid a kickback of $15,000 per lumbar fusion surgery and $10,000 per cervical fusion surgery, according to prosecutors. Some patients drove hundreds of miles from their homes to undergo the procedures at Pacific Hospital.

Drobot concealed the kickbacks as legitimate contracts with doctors, chiropractors and others who received them, prosecutors said.

In addition to Drobot, prsecutors seven other defendants have pleaded guilty in relation to the kickback scheme. Drobot’s son, Michael R. Drobot, and the other defendants in the case are scheduled to be sentenced by Stanton over the next two months, the U.S. Attorney’s Office said.