Health insurance claims for sex work lead to conspiracy allegations and more news

Published by
Peter Kavinsky

The Department of Justice (DOJ) is charging a woman with a long-standing health care fraud scheme: From 2017 to 2021, she billed a health insurance company for sexual services offered to dock workers at her California “health centers.”

Sarah Victoria, the “head” of the scheme, recruited women through Long Beach strip clubs and referrals to provide services to her three chiropractic and acupuncture companies. Federal prosecutors also indicted eight other people, seven of whom are dock workers, for allowing her to file false claims with the International Coastal Warehouse and Pacific Maritime Association (ILWU-PMA) health insurance plan in exchange for sexual favors.

Under her plea agreement, Victoria billed a health insurance plan that covered chiropractic services without deductibles or out-of-pocket expenses for chiropractic and physical therapy using dockers’ names or their family members’ names for more than $2.1. million in fake claims. In return, Victoria paid ILWU-PMA plan members cash kickbacks by facilitating the transaction using encrypted language in text messages, court documents say. She ultimately raised about $550,000.

ILWU said in a press release that it “condemned the fraudulent claims allegedly made against its ILWU-PMA welfare plan by seven workers and three healthcare providers.”

“Our union is proud to have negotiated with our employer the health benefits we believe all Americans should have. We will not tolerate the fraudulent use of our contract benefits for which port workers have fought and sometimes died for the past 90 years,” Frank Ponce De Leon, member of the ILWU Coastal Committee, said in a statement.

Victoria admitted to using someone else’s personal information without their consent in fraudulent billing and was charged with “one count of conspiracy to commit health care fraud and one count of aggravated identity theft.” The Justice Department says that when Victoria pleads guilty in court, she could face 12 years in federal prison.

Another defendant is Cameron Ram, a longshoreman, member of the ILWU and alleged customer of Victorian businesses. The DOJ alleges that he agreed to let her make false statements and lied to the FBI agents about it.

This is not the first time that a longshoremen’s union has been embroiled in a fraudulent insurance payment scheme.

In 2019, another ILWU-PMA chiropractor, Darren Hines, pleaded guilty to health care fraud. He billed the plan for services on behalf of another provider and services that were not medically necessary.

In 2016, David Gomez and Sergio Amador were convicted of mail fraud for conducting a transaction in which ILWU-PMA billed for services that were not provided or were not medically necessary. Again, this was done primarily through chiropractic services.

Gomez and his partner opened clinics and created medical management companies, which they used to funnel funds from the clinics to themselves and to pay ILWU members to use their clinics. Again, they used false signatures and names of ILWU family members to make fraudulent claims about the plan. Gomez made about $3 million from the scheme and was sentenced to 20 years in prison.

In 2013, fraudulent claims filed with the same union benefit plan resulted in a backlog of over 100,000 claims. Slow processing times for claims by the plan administrator meant that some workers’ medical claims were directed to collection funds. This, in turn, caused union demonstrations and labor shortages.

  • Sophie Putka is an entrepreneur and investigative journalist for MedPage Today. Her work has appeared in the Wall Street Journal, Discover, Business Insider, Inverse, Cannabis Wire, and more. She joined MedPage Today in August 2021. To follow

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