CA Workers Comp: How Fraud Syndicates Are Robbing California Blind says Prosecutor

The tools to fix California's workers' comp fraud problem already exist. The laws are written. The statutes are clear. So why is the fraud still winning?
Retired Kern County Deputy DA Kate Zimmermann spent over a decade building some of the most complex organized fraud cases in California — cases that took years, covered dozens of locations, and exposed schemes so sophisticated they were designed from the ground up to avoid detection.
In this episode of Fraudcraft, Kate doesn't pull punches. She talks about the training gaps that leave investigators unable to articulate what they already know is wrong. The institutional habits that let fraud slip through adjudication unchallenged. The long-game schemes that carriers fund without ever realizing it. And the simple, unglamorous fixes that nobody wants to do because they don't come with a press release.
This is the conversation the industry keeps almost having — but never quite finishing.
If you work in workers' comp, SIU, claims, compliance, or prosecution, this episode is worth your full attention.
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Disclaimer: The views of the guests are their own & may not necessarily reflect the views of Fraudcraft the podcast. However in order to incite change & understand problems, we need to present all of the sides of the system connected to fraud.
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Transcript

SPEAKER_00 0:00

Hey everyone, this is Tina, your host on Fraudcraft, the podcast where subject matter experts take you on a ride inside the billion-dollar underground economy created by fraud significates. This is where we talk all things fraud schemes and fraud tech in the commercial insurance industry. In this episode, we get into it with one of California's top deputy district attorneys from Kern County, recently retired prosecutor Kate Zimmerman. Her very first case had every organized criminal fraud scheme type imaginable, and she's acquired years of very complex fraud scheme knowledge. Her insights are invaluable and must be shared. California businesses and consumers? Listen to her insight. Take as a cautionary tale so that you don't lose more of your money to fraudsters. Thank you for being a listener and subscribing to my podcast. It's free. We appreciate your support. I need you to hit like on the videos and comment. Let me know what you think about what Kate says. Pose any questions that you might have for her, as she'll be a regular guest. She has so much to share. Thank you for watching, and let's see you on the next video. Kate, you've had a lot of experience as a prosecutor with criminal investigators. And I would like to know what makes a good criminal investigator for a prosecutor. Let's start there.

SPEAKER_02 1:15

In general or inside the insurance world? Let's do all. First off, you have to have the fire in the belly. I mean, if if you're just doing it because it's a stable paycheck, if you've gone to a DA's office because it's an eight to five cop job Monday through Friday and you're going to have the weekends off, you may be adequate. You're never going to be great. If you don't have the fire in the belly, but that's that's the same as in any profession. You know, there's the people who are there because it pays the bills, and there's the people who are there because they want to be there and because they find something personally satisfying in what they're doing. You can tell instantly which one you're dealing with when you're dealing with an investigator. In the insurance end of the thing, you have to have somebody who is secure enough in themselves that they don't need to have accolades all the time, because they're few and far between. Most people, when you think about what are the sexy cases or the glamorous cases, they're not thinking insurance fraud. If you're if you're trying to do it because you think there's going to be some great headline and you're going to get investigator of the year, probably not. You're doing it because you enjoy the puzzle. You're doing it because of the personal satisfaction. You're doing it because you have a heart for victims that frequently get overlooked as being victims. You know, I think the fire in the belly really has to be the touchstone. Because if you don't have that, you're not going to put in the time and the effort. You're not going to put in the let me think this through. You're you're trying to figure out what's the least amount of work you can do to get from A to B. And I'm not suggesting that you take the long route simply to take the long route, but you know, when you're racing cars, there's a thing about go fast slow. And and to some degree, you got to take the corner slow enough that you can come out fast. And if you come in too hot, you're going to miss the corner and you're going to goof it up. You have to be willing to put in that time and the effort to come in slow so that then you can run when it gets going and you know exactly where you're at and you've streamlined it.

SPEAKER_00 3:08

Yep. I like that because I've I've found that with white-collar crimes, organized crimes, fraud syndicates, capping steering on kickback schemes, when you're investigating that, I can't tell you how many times I've gone down, I've spent hundreds of hours down this one path or two paths, realized that there's nothing really to see there. Like there's there's nowhere else to go with that. And you've got to kind of back up and do another angle. Have you experienced that?

SPEAKER_02 3:33

Yeah. Yeah. That and the other thing is when people are cheating the system in insurance, and I suspect, you know, any of the other complex financial frauds, most of them are not confined to only one thing. Okay. They're going to get whatever money they can't any way they can. So you can have two, three, four, five, a dozen different theories of liability, all of which could be assessed. Are you really going to pick up 12 rocks and put together 12 cases? Or are you going to say, what are the biggest things I can put for shells in my shotgun and go hunting? And to some degree, you kind of got to peek under the rocks to at least get a preview of what they are to be able to make a determination as to what's going to be a viable case or not a viable case. And I and I think there was something that you and Don talked about, and it really resonated with me, with the idea of, you know, you have to be saying, I'm doing this to find the truth. And sometimes the truth is there isn't a fraud. And I found it, I found it disappointing and frustrating dealing with particularly f the Fed side of the house. Maybe I just bumped into people who had this orientation, but I heard about it in anecdotes enough in my travels where there really was a sense that they didn't want to get involved in cases unless they were assured there was going to be a conviction at the back end. And I always laughed at that because I'm like, well, first off, how can you assure there's going to be a conviction at the back end? You don't know what you don't know until you look at it. Be mindful that you don't always want to be the one more guy at the tree syndrome. You've got to take some along the way. But you you have to do these thoughtfully and say, you know, which um you can't come into it from that perspective. You have to say, I'm I'm looking at what's the truth, and I'm and I'll go where the evidence takes me.

SPEAKER_00 5:13

You know, the the one thing I want to ask you is, you know, I love California. I love our businesses in California. I do love the California work comp system in all its ugliness. Um everybody, everybody talks about that the California work comp system is broken in some way or another, or in many ways. And so I like to talk about what's broken, but I also talk about how we can fix it and inspire that movement at some point. If you had all the power in the world, what is the one thing or many things you would fix about the California WorkComp system?

SPEAKER_02 5:48

It's funny. I think that the power to fix it is in many ways already present. And I know you're gonna look at me and go, what are you talking about, Kate? Think of it as we talked a bit about how at the WCAB, you've got judges who will say, I'm not here to deal with the fraud aspect. Okay.

SPEAKER_00 6:08

Well, okay, try this on for size. Don't talk to me about the labor code. I'm like, well, we are in work comp.

SPEAKER_02 6:15

Well, okay, so try this on for size. So as soon as something gets filed to get paid, and I always laugh because people talk about the difference between, well, is that the bill or the medical report? Well, the bill is not a bill in a medical report. It's the bill because the bill requires the medical report to be the medical documentation and is the substantial evidence behind it. When you flip to the back page, every report says I attest under Pelly of perjury, those contents are true, and I didn't get paid anything to do it. Okay. So when you say, prosecutors, huh? We need what's the affirmative lie? Well, okay, so they've told you all of the contents of this are true and correct. If you find that something's not true, you already have got a material misrepresentation. That's also present when it goes to WCAB. Yes. So this shouldn't be as difficult as it is. And I and I think we overcomplicate and then we don't enforce what's already there. If we say that the statutes say you're not entitled to anything unless and until you prove you are, period. You're not entitled unless and prove until you prove, unless we decide it's more expedient to send you to the hallway and pay off cents on a dollar. So if we simply took the rules that are already there on the books, if we actually held people accountable to what they say they've done and to why they're entitled, right there you'd have a huge fix in the works from the beginning. And this this isn't rocket science. It doesn't require three legislative sessions and bills being carved out and lobbying. And I mean, the the tools are there. We just, it's, I don't know, not sexy to reach into the toolbox and grab the tool you have. Everybody wants to have the shiny new toy. How do we fix this on a global level? So I think if you start there, that would be huge. The other component that I see in this is there really needs to be, if we're gonna do any fixes, I think more transparency as to who is on the other side of what's being produced. And I mean everybody from uh we fixed it in some ways with the liens, where now they have to attest that they personally provided the service. You know, that was a huge deal. We didn't have people having to attest that. You had you had these zombie bills that have been through five different people factored out the door. And for people who don't know, factoring was where you would essentially have people selling liens as commodities. So I can pay it for 10 cents, but I think I can sell it to somebody else for 20 and I've doubled my money. And all along the way, everybody's looking at what's the big number that the um medical fee schedule says it should cost. And as long as we're working below that number, at some point we have a hope that the carrier is going to pay us this big number, you know, saying we need transparency who actually provided the service. You know, we need transparency on where is it being done? We need transparency on, you know, and we've sort of started doing some of that, but do we truly hold people accountable on that transparency? Do we have people who go and cross-check it? And if so, what are they doing when they're doing the cross-checking?

SPEAKER_00 9:17

Well, and then they stop filing liens too.

SPEAKER_02 9:19

Well, and that was that was brilliant. But but look at that overnight, look at how much fraud went out of the system. How do you know it's fraud? Because if I truly believed I was owed a debt and all I gotta do is pony up and put a hundred bucks on the table to say, I want to hold my place in line to go adjudicate this so I can get paid what you owe me, why would I not do that?

SPEAKER_01 9:37

Right.

SPEAKER_02 9:37

The fact that they walked away from millions and millions of dollars in paper tells you something about the value of that paper. Right. You know, right there was a huge. So transparency, good. Putting people with skin in the game, good. We know how to do this. It's just a function of having the will to do it. I have worked with some phenomenal investigators over the years out of the Department of Insurance. You know, um, the late great Ray Cherogino, Daryl Tully, Dennis Reed, Rich Mejorado. I I love Rich. Rich at one point went to SAC and was working in their training division. Oh, nice. And so I had an opportunity to ask somebody who would actually know the answer to a question that I had mused on repeatedly. And that was how much training do we give our State Department of Insurance on the workers' comp system itself? And he came back and said, um, yeah. Because they really not mean no. You know, granted, this was years ago and maybe something has changed, but I always felt like they did a disservice on a on an institutional level to their detectives who had that fire in the belly by not giving them the tools to truly regulate the system they're being asked to regulate. I mean, this would be the equivalent of asking somebody to be a traffic cop and have them never have seen a car driven and we don't give them the vehicle code and we say now go enforce the traffic rules.

SPEAKER_01 11:05

Yes.

SPEAKER_02 11:06

We would laugh at that and say that that didn't make any sense at all. So here you have the Department of Insurance that again, I they have some phenomenal people. I think that at their heart they mean well. I think they struggle in some ways to balance their training needs to be post-certified as cops, as it were, versus being subject matter experts on what they're trying to regulate. And I think what I saw regularly was people could look at something and say, this doesn't look right. They're clearly doing something that's committing fraud, but it's that trying to drag it over the line. And I'm sure you would see this, Tina, in both your private SIUs and your DOI investigators. Everybody in the gut level knows it's a problem, but they can't quite put it into words. And ultimately, the prosecutor who is gonna try and have somebody write a probable cause declaration, you know, that that document that we make police sign that says, under penalty of perjury, I believe they committed a crime because these facts are true. If they can't put in words why it's a problem, it makes it really, really hard to write a probable cause declaration. And it goes back into that materiality black hole. Why does this matter? I I think if there was a way to do additional support, and it's hard because government institutions don't necessarily do a lot of support from the outside. We tend to be the top pushing down rather than the bottom up. But I think it would benefit the system in its entirety to have that. I know that when they put the anti fraud unit in DIR, that was really part of the original vision was to have them be, as Jim used to call it, 1-800 help me. You know, here you've got the people who are writing the rules, the people who are administering the rules at the Department of Industrial Relations. Can they be those subject matter experts? And I don't know how much of that came to fruition. You know, for quite a while, that wasn't the primary focus. But those would be the things if I had the power would be let's put together a serious brass tax and get everybody fluent on it. Um, you know, my goodness, a DLI, you could learn Arabic in a year. You might have to pull people and add a module that takes more than five minutes to do. But it would pay dividends in allowing these cases to be more thoughtfully worked on a faster timeline and put into something that can be more quickly moved into either civil prosecution by the prosecutors or criminal prosecution under the statutes.

unknown 13:47

Absolutely.

SPEAKER_02 13:47

If things are lined up like that from the beginning. But the sheer volume of cases where, yeah, you're right, I can see this as fraud, but you don't have it outlined in a way that that resonates. And then it gets further complicated because it goes to some prosecutor who got assigned to the unit three months ago and they did it because they did something wrong and they don't know anything about it. They don't want to be there when they're simply counting their time until they're off and gone somewhere else. With their investigators who also are doing time out in the penalty box until they can get out and go somewhere else. I think that was something that Don did very, very well at the FAC was the real push to professionalize the anti-fraud sector and say, you know, there is definitely value in having longevity, having institutional knowledge, being able to say this works or this doesn't work, or even just, you know, having the same person on the case from start to go. But, you know, like I said, I that case from 08 to 2019, 11 years. That's a long, I mean, that's unheard of for a property to have a case for 11 years. But you got people continually coming in and trying to clean up somebody else's work, or I think of it differently and I'm looking at it differently. But to the degree that things can get streamlined, I'm all for that. And sometimes that means you pick up rocks and you do some investigation and you say, I'm walking away from this part. This this complicates it unnecessarily. This is a better theory. Set it by the side, and it's not wasted work. It was a it was a necessary point of evolution in a case that you're trying to make as strong as possible so that you can walk in and and own it and say, There's no question here. Yeah, we're giving it to a jury because the jury has to render the verdict, but I'm not taking it to a jury to see what a jury says about it. It's you know, it's already a foregone conclusion, we're gonna win.

SPEAKER_00 15:30

Right. What would you say to new prosecutors? What laws to study, what laws to focus on that go into the commercial insurance unit?

SPEAKER_02 15:38

With the labor code. They tell you everything you need to know about the system. And then from there, and I'm talking about comp because that was the part that I did. So it's statutory. You start there. Then you start playing with, okay, well, where are the definitions going to have problems? Oh, they're talking about medicine. I might want to look at the business and professions code, because the business and professions code is going to tell me what is legal medicine in the state of California, how medicine is delivered, who can deliver it, what they can do, what's required in supervisions or non-supervisions, the code of regulations. To be a bit of a geek, at least until you learn it, but you should always still be learning. I mean, I remember I got a call from uh a really good friend of ours, Oliver, and he said, Hey, Kate, he called me, he says, Don't you have Dr. So-and-so in jail in Kern County? And I said, Yeah, why? He says, Did you know he's billing for service? Out of jail? I said, How? I said, What have you got? And by the time it was said and done, um, we discovered that they were using physician assistants to keep a clinic open. The physician assistants had no idea the doctor was in jail because he was absent so much of the time, it didn't occur to them to have it be different.

SPEAKER_00 16:53

Everybody listen to this right now, listen to what Kate's saying, because this happens all the time.

SPEAKER_02 16:57

All the time. And by the time it was done, my investigator and I really became kind of many experts in physician assistant law in the state of California and discovered that, yeah, no, that they couldn't do it that way. My jail doesn't take messages for people and run the phone over and say, hi, somebody's calling you and needs to be supervised in the clinic. And we were able to come up with an insurance fraud prosecution because it wasn't legal medicine being practiced. But if you don't know the rules and how it's supposed to fit together, you'd you'd never you'd never have that come together like that. But that that's one of those, it's better to be lucky than good. I was thinking about that when you were talking to your interpreters. What are the odds that the person who's there as the court reporter knows the interpreter and says, that's not so-and-so. That's a better to be lucky than good moment. You know, you you get that. Yeah. But they they really have to start. If you're trying to do comp investigations or comp prosecution and you don't have a well-read labor code, if you don't have a well-read copy of the official medical fee schedule that gives the definitions of what all the different services are, so that you can say, does this make sense? You're really trying to fight with two hands tied behind your back, and it's not going to go well.

SPEAKER_00 18:11

Right. I want to get your opinion on something. When Don and I were doing his episodes, um, and I think he did this to rattle me and he knew he would get me on this one, but because he knows how I feel about interpreting fraud, because I've worked really hard on an interpreting fraud over the past several years. I know a lot of interpreters out there who have worked really hard for their certifications. I've made friends with a lot of them. They're really wonderful people. And then you've got this interpreter fraud issue. And I know you have a lot of experience with this. Um, he really got me on this when he said, you know, he goes, Tina, I'm really pragmatic on some issues related to interpreting. And he said, I don't have a problem if uh a company pays to be on site at a clinic to do interpreting. And that really, that really got to me because we talk about the institutionalized fraud, and it's back to where that judge in Orange County said, Well, I don't understand why we have an attorney here being prosecuted for business referrals. Doesn't an attorney need, you know, to do business referrals to get business and work out of his office, forgetting the fact that this copy service was providing free people, you know, free office assistance, free work, free free software.

SPEAKER_02 19:20

Well, but they're but they're not free. You're being paid in kind with the information. Again, it's it's the precision of the language when you say I'm giving you this person for free. No, you're paying me in information about your client's attorney. And in return for you giving me what would be otherwise private information, right? I'm willing to offer you this.

SPEAKER_00 19:44

Right. A lot of people don't understand the whole reason. And I I've spoken to a lot of attorneys. I have a lot of applicant attorney friends out there, and they're like, you know, well, this this coffee service came and uh they're offering to give me a free legal assistant, um, a free office manager, yada, yada, yada, yada. And I they're they're like, well, this is legal, right? And I'm like, you do realize why they're doing that. You know, they're trying to they're trying to get access to your clients, they're trying to get access to the data, stealing, you know, the your client's data or your patient's data. But they're also, it's also a kickback situation to where they're offering you free services on your not non-work comp cases and clients for access to all your work comp cases. So do you do free?

SPEAKER_02 20:27

It's dirtier than that, Tina. Well, come on, tell us. Okay. So people want to know, it was kind of funny because I remember waking up one morning and work comp Central had put out an article talking about the explosion in exposure for the supplemental or subsequent injury benefit trust fund. Exactly. But see, you can't divorce the two of them. And this is one of those where I got kind of the the goosebumps when it finally went, ah, because you know, one of the challenges, and you know, we'd sit around and have these philosophical discussions about how is there enough money to support all of this? I mean, certainly the bad actors work in concert. They may or may not be in the same company, but they all recognize that if we scratch each other's back, it makes it harder and harder for the carriers to see what's going on. So if Dr. Bad Doctor over here writes a report that supports Dr. Crook Doctor over there, um, now you look like you're legit, I look like I'm legit, and we both got paid. Okay. But how was there ever enough money doing little carved pieces back and forth? And I had to laugh when that article came out because we had had a number of meetings with some of us, and I think you may have even been in one along the way. And we were looking at SIBTF and saying, that's the piece that's missing. So, in a nutshell, for people who don't know SIBTF, essentially this the case that started the whole idea was a gal who was blind in one eye. She'd been blinded. And the state has an interest in. Asking employers to hire people who have some sort of physical disability. Because we'd rather have the person who's been blinded in one eye working for a living rather than sitting at home collecting benefits when they're capable of working. Well, the employee ended up having another accident, I know bad luck, and got blinded in the second eye. And the argument was over who was responsible for this worker now who couldn't work at all. And old employer says, hey, I paid for the first problem. I'm not responsible for the second. The second one said, Hey, I'll own the second one, but I'm not responsible for the first. So they set up this trust fund that's out there that's administered out of DIR. So it's not a private carrier. And that's going to be incredibly important as we work through this. When you think about why this is the perfect crime inside workers' comp. Okay. So SIBTF comes on board and says, you had an injury, it was at a certain percentage. Here's a second injury at a certain percentage. Now we're going to step in and make sure you are taken care of and we're not going to hit either employer for more than what's their responsibility. The reason why this becomes the perfect crime is, as you and Don and you and Shoddy have talked about, is carriers and third-party administrators have obligations to report potential fraud. DIR does not have the same requirements. So by going into a fund that is administered directly by the workers' comp system, they have avoided all of the tripwires that would normally be in place that somebody would say, I see a red flag. I need to say this is fraud and should be looked at closer. So already they're ahead of the game. No carriers looking at it because it's not their money. We could talk about that at some point it is because it's funded out of the comp policies, but it's attenuated, it's a far enough removed system that people don't see a one-to-one ratio.

SPEAKER_00 23:43

They need the that were comp um clean to kick off the SIBTF benefits.

SPEAKER_02 23:48

Correct. But what else do you need? You need data. Records, medical records. Okay. And this is how dirty this is.

SPEAKER_00 23:54

As you can get.

SPEAKER_02 23:56

This is this is deep water stuff, okay? This is getting sexy. But work with me here. Okay. So when we found SIBTF and we started looking at it and saying, okay, what's going on there and why and how? If you look at the compensation structure for the attorneys for applicants and how it varies between an individual claim versus an SIBTF award, it all makes sense. Because if you get an SIBTF award, the attorney gets far more money in perpetuity. In perpetuity, as opposed to it being a ranked percentage off of what I got here, close the books and move on.

SPEAKER_00 24:34

Yeah, because in WorkComp, they only get like 18% of the compromise and release a settlement. Correct.

SPEAKER_02 24:41

So if one of my clients gets picked up for an SIBTF claim, I now have a basically a lifetime income stream out of that injured worker.

SPEAKER_00 24:51

Yeah.

SPEAKER_02 24:51

Okay. So here is how the game is played. Copy service, and I'll explain how they fit back into the matrix, but they come in and tell us.

SPEAKER_00 24:59

And I'll help if you miss somewhere.

SPEAKER_02 25:00

Please do. Because it's been a little while since I've looked at this.

SPEAKER_00 25:04

It's such a great fraud scheme.

SPEAKER_02 25:06

Well, and it explains why why the exposure exploded, because people realized what was going on and said, hey, I can exploit this. Yeah.

SPEAKER_00 25:13

And to the SIU investigator, what we're talking about is if you see a copy service billing for 500 locations on a work comp claim, check there's an SIBTF claim being filed on the other side of things. Or if there certainly will be at some point. Yeah. And the copy service is billing the insurance carrier for all the records that they're going to use for on the SIBTF side. Massive scam. Sorry, go ahead. I get so excited.

SPEAKER_02 25:37

And I should probably point out at this point, part of how I know all this was part of it was reading it. Part of it is people aren't smart enough to lock down their Google Docs online and you can pull up things. And at one point, we put somebody into an online seminar that was being offered by a copy service that was marketing to applicant attorneys and explained how the fraud would work and what the in was for the attorneys once you sign up with us to do this.

SPEAKER_00 26:05

And there was that executive level engineer at one of the copy service companies that we know about who admitted that they were paying $5,000 a month to applicant attorneys for taking on SIBTF claims. So there's that.

SPEAKER_02 26:22

Well, yeah. And then do you want to talk about the doctor side of it? Because there's a doctor angle in it too. Yes, please. We'll have another. Okay. With my glass of uh, I've got coffee. So you have the what are we doing? Do we drink wine on a podcast? I don't know that we do, but we probably should. Is that appropriate? I don't know. Um I'm sorry, go ahead. I'm sure there's something with cocktails and crooks or something on it.

SPEAKER_00 26:47

I think Rich Rich Duffy said, I drink wine and I know things. That's what you should call your podcast.

SPEAKER_02 26:54

He's so amazing. So the carrier or the the applicant attorney gets approached by the copy service. Copy service says, hey, we'll come in and we'll handle all of your subpoenas, we'll handle all of your copy work, we'll we'll do all kinds of things for you, we'll make you all kinds of happy. Just let us at the data.

SPEAKER_00 27:11

And just use the software that we Yeah.

SPEAKER_02 27:14

Use the software we've given you, which then captures everything, essentially scrapes the data. Why does the copy service want it? Well, because the copy service, in many instances, also runs a stable of doctors. And that stable of doctors are the ones who will do the exams to say an injured worker has met the threshold necessary to support the SIBTF claim. Here's where it gets really ugly. So if you were to look at the roster of doctors in the stable, how many of them are QME qualified out of DIR? So we were catching how you had these report writing billing services doing work for the QME. And you would say, okay, this looks legal. A doctor can have an outside agency, you know, write the report up off of their dictation, publish the report, do up the billing, send it to the carrier. Nothing wrong there, right?

SPEAKER_00 28:08

Very expensive work, by the way. Thousands and thousands of dollars.

SPEAKER_02 28:11

But wait for it, but wait, there's more. Okay. Would you be interested to know that the doctor is also an employee of the billing copy service? So, on one hand, if I wear my hat that I'm the QME, you work for me copy service. However, on the SIBTF exam, I work for you. So when you're looking at making those percentage thresholds for SIBTF, the people who are giving you those numbers are QMEs. So Dr. A, if he's the QME on claim A, gives an award. But by the time it loops back around, now he's the he's potentially a SIBTF exam doctor. And it may not be the same one, but again, we've got a stable of them. So Dr. A can see them as the QME or make the award. Dr. B comes in under the SIBTF exam side of the house, picks up that lovely award that A left on the ground laying there that just happens to make the number threshold and finds that the person should have the SIBTF award. And at the end of the day, the attorney gets paid for the rest of their life for it. And everybody gets an award. And everybody does. Well, at the time that we were looking at it, I want to say they only had a handful of employees that were running the fund. So there were only like six or seven people tasked with managing all the paperwork. And they were very candid in the seminar that look, they're overwhelmed. They're basically looking and saying, does the paperwork look right? They weren't checking any of the data on the back side of it to see if it was true. It's just if you filled out the form correctly, pretty much you got it. And overnight, SIBTF went from being some you know fringe thing that people cut and knew was out there to being this multi-million dollar, you know, behemoth cash machine.

unknown 29:50

Yeah.

SPEAKER_00 29:50

And at the end of the yeah, for more money, by the way. They've been begging for more money.

SPEAKER_02 29:54

Step of the way, it's been a long game being played. So that's where it wraps back to the carriers. So the carriers don't necessarily care about the SIBTF end. But would you be interested in that the original award being generated by the QME to some degree is driven by setting up the play for the eventual SIBTF because they've already identified this worker and said, we're setting this up on a long game. I mean, we're we're so we're so quick to say, what's the bottom line? How can I look at this here? We totally miss the long game being played. And so you've got this, you know, just ungodly numbers of zeros going out the door, and carriers paid for all of it along the way, not realizing that those were being inflated to set it up for that long game kill that comes back to the applicant attorneys through the kickbacks being paid by the the copy service for the privilege of coming in and scraping their data and getting it all running. It truly, but when you hear it and you go, now it all makes sense. Yeah. Yeah. So you have the obviously they're making money on the initial side of the house with the bad claims, but an awful lot of it is being done to set up what's necessary for later. So essentially, I mean, they're slaughtering the pig three times, essentially, by the time it's done. Absolutely. You know, that they they get it as it goes through, they get it on the treatment, they get it on the med-legal side, on the dispute resolution, and then they get it on the on the other. And it's the same people making money. And there's an and and all of a sudden now there's enough money to spread around to to keep everybody in the fault.

SPEAKER_00 31:27

Wouldn't you love to to get access to that data, the the coffee service billing on the work comp side and the SIBTF side to see how much of that matches up and how and how many double payments are being rendered?

SPEAKER_02 31:40

Oh, yeah. But but it's but it's the beauty of it, Tina, because think about it. The carrier never sees what goes to SIBTF. Yeah, yeah. You know, the carrier looks at it and says, Okay, well, there was a panel Q and me. They came in, they made their decision. I might not be happy about it, but okay, there's nothing here I can fight. And they pay it and they go like this. I'm out, I'm good. And they don't even realize what has been put in motion.

SPEAKER_00 32:02

Absolutely.

SPEAKER_02 32:03

As it's often and gone. And that is just huge, huge money. Yeah. And all of a sudden now there's enough money to make the system run.

SPEAKER_00 32:12

And here's the problem is that we can't get anyone who's anyone with oversight to take a look at this. They haven't yet. I know. I know. And it's a big problem. And it's what it's why we have all those cumulative trauma claims in California. Because they need the CT claims. They need the CT claims for the capping aspect of it and the kickbacks, because CT claims allow for a whole lot of kickback um receivers, right? Oh, yeah, absolutely. And then it also it also helps explain why the applicant party would need all these records, supposedly, right? Which is actually not for the workcomb claim at all. It's actually for the SIBTF side that the insurance carrier is paying for a lot of money. I mean, a lot of those, a lot of carriers are paying about $5,000 per claim just to copy services alone.

SPEAKER_01 33:02

Absolutely.

SPEAKER_00 33:03

It's incredible. I I hope at some point the state does take a look at this because as it was explained to me, as the copy service bills come into the state, they're just pointing and clicking and paying, you know.

SPEAKER_02 33:14

So there's there's one that's a huge profit center and it makes sense the way things is are set up, all of a sudden makes sense when you look at it from that perspective. Things that didn't make sense if you're simply looking in a vacuum and going, How is this working? This doesn't feel right, but I can't put my finger completely on it. Yeah, all of a sudden makes perfect sense. The other one that when you think about it in terms of what it does in the system that makes sense, you know, radiology has been a huge, huge problem and cost driver inside the comp system forever and a day. You know, since God was a corporal. Why? My hypothesis is because whatever treatment you're gonna ask the carrier to authorize, they're gonna want films. You know, that that is gonna be a constant. There's not gonna be a whole lot of fight over it. They're gonna want it. If you're gonna want to go into surgery, they're absolutely going to want it. Yeah. So in that, you know, Venn diagram sweet spot between the two as to a surgical versus non-surgical case, all of a sudden, what's a fairly consistent thing that's going to show up on nearly every claim that no one's gonna question? And I mean, because you know, yeah, you can play the drug game, yeah, you might be able to do, you know, your nerve studies, but some of them aren't gonna be. By definition, imaging is going to be there. Am I wrong?

SPEAKER_01 34:28

No.

SPEAKER_02 34:29

And and and look where we've seen x-ray. I was gonna say, and and look at the problems we've had with imaging over the years.

SPEAKER_00 34:36

Yeah.

SPEAKER_02 34:36

And that, you know, that goes beyond the compend. I mean, that goes all the way back into the late 90s with the people checking grandma out of the old folk home to take her into the mobile trailer and shoot her full of all kinds of x-ray radiation. You're fine. Send her back in until the next month when we do it all over again. They're very savvy in the way they put these together. You know, it explains the why there is such a driver to have the applicants who are capped into the system put through so many stops on the trolley, as it were. Right. Because every one of those, A, is an immediate billing opportunity, and B, you're building that record for SIBTF at the back end.

SPEAKER_01 35:16

Yeah.

SPEAKER_02 35:16

To some degree, they don't even care whether they get paid today on this. The point is, does it build a record that the QME can make their findings on later on? Absolutely. And then and then go for the big kill at the back end of it.

SPEAKER_00 35:27

Yeah. The the QME who belongs to a corporation that is getting paid from the SIBTF side and the work comp side. So it's in their best interest.

SPEAKER_02 35:37

When I saw the Google Docs online and they were referring, and it was a here's how this works in the marketing materials. And they were referring to the guy who was the QME as a quarterback doctor. Essentially, we put it in his hands and he calls the play. And so he's moving things around.

SPEAKER_00 35:56

And I believe for the medical, they call it medical aggregator or something like that, right? I had an insider with one of the big QME clinics and they call it medical aggregators.

SPEAKER_02 36:06

Well, and I always thought it was funny to some degree that they're using the QME for the quarterback doctor because when you think about it, QMEs come in on the dispute resolution side. They're not supposed to be doing treatment. You're supposed to, so you know, it's supposed to be your PTP who's driving treatment side. So I first thought that was kind of an interesting Right.

SPEAKER_00 36:26

But then also remember on the carrier side, try to dispute a QME's bill. You know, it's a med legal bill, so try to dispute it.

SPEAKER_02 36:33

Well, and we're back to if we had people enforcing the rules the way the rules are written, you wouldn't have a problem because there may be a place for a QME, but the QME shouldn't be involved until we know there's a dispute. You don't get to prophylactically say, I think we're gonna have a dispute. In the words of Don, you know, that you don't get to say, hey, I know this carrier's right for the killing. These guys are gonna fight us, so we know we're getting to a QME. Let's go ahead and get ahead of it. You have to wait till it actually happens. And until you have people at the WCAB saying, Hey, wait a minute, this is out of order. We're back to this is a methodical, this is a logical system. You have to follow the rules, you have to do things in order, you have to take the steps. We don't pay for things that aren't there yet, needs to be ripe for this. Right. It would take care of the problem. But instead, we get in the hurry, and it's more about, you know, can we move the volume and quick, let's sign these all off and go out in the hallway and negotiate it and get it on and we create our own problem.

SPEAKER_00 37:32

You want a news flash on this? Sure. What you got for me? Well, it has been a little while since I've looked at some of this, but well, no, you're you're right on point. But also to add to that is is what's happening right now, as explained by John Don, who's an applicant attorney out of San Diego. Wonderful guy, wonderful attorney, really cares about his clients. Uh, I've known him for a long time. So I had him on, he was my first guest on the on the podcast. And what's happening now is are they are creating these agencies, these SIBTF agencies. They're like SIBTF call centers. And what they're doing is that they're calling all the applicant attorneys and saying, Hey, I've got a list of all your work comp cases right now. We can turn those into SIBTF cases for you. And John was like, you know, what do you mean? There's only, you know, they only have these injuries. Oh, don't yeah. And they're they he said something like, Well, they don't qualify for SIBTF. And they said, Don't worry about that. We can take care of that.

SPEAKER_02 38:24

We'll take care of that. We'll get them called.

SPEAKER_00 38:26

Yeah. Yeah. And he's like, no, thank you. He's probably one of the only few who say no, thank you. But I mean, he's like, they knew everything about all his clients. The case is everything, status, you name it. How did they get that info? Isn't most of it available through EAMES? Well, I think they knew a little bit more than what was available on Eams.

SPEAKER_02 38:44

That's the problem. Well, I was always shocked at the amount of information you could get off of EAMES. Um I know I am I know Jim and I used to do a lot of after five o'clock, sit and and spitball, okay, where do we think the next problem and fraud's gonna come from? And you could pull up EAMS. I remember being in a meeting with uh then director Baker. And she had what was the hot 100 list that that Jim and I had worked on, which she was like, what is this? Do you know what this is? Yeah, these are your top hundred lien claimants in your system. She's like, How did you come up with this? I said, Well, Jim pulled it, but it's right there in Eams. I mean, anybody can pull it up and see.

SPEAKER_01 39:24

Right.

SPEAKER_02 39:24

And and when you see that you have, you know, an individual applicant attorney who has more at that point, more exposure in the system than EDD. Here's a government entity running statewide pulling liens at that point for EDD. And you've got some guy out of nowhere who's a one-man shop lawyer who suddenly has more in the system than EDD, that might be somewhere to go look. So I was always shocked at the stuff you could pull out of EAMS if you knew how to get into it.

SPEAKER_00 39:51

And it what will shock you even more, that really ticked me off, you know, I'd go to the state asking for data, and it'd be like, oh, that's that's protected information, HIPAA, blah, blah, blah, blah. And I'm like, well, that's funny because um I was just at the WC one of the WCABs.

SPEAKER_02 40:04

Insurance fraud doesn't have that problem because by definition, you have a third party in the relationship who's going to decide whether or not to pay the bill. But you're talking about somebody who knows enough about HIPAA to be dangerous. They know that if I have a violation, I'm personally responsible, but they don't understand the exceptions that are in the rule, and it's easier to just say no than it is to say yes.

SPEAKER_00 40:25

Yeah. It would, I mean, you know, it was just the DIR, DWC's way of blowing me off. But, you know, I told them I said, step into any WCAB right now, any board right now. You can sit there all day long and watch it. Paperwork that they leave out with all the personal data drives me bonkers, and they need to stop that. They need to fix that because that's a big problem. But I would go to the boards all the time to harass all the bad guys, right? You know, because they'd hang out at the boards and I'm like, oh, here's Tina, you know, she's coming to harass us. Yes, I am. And oh, by the way, what's all this data, you know, out here, all these documents?

SPEAKER_02 40:56

I mean, it's it's really bad. I want to swing back around because you were talking, we were talking we were talking about interpreters. Okay. So when you think about the WCAB and how the WCAB does not require lawyers to be there, okay? Right. Let's play with this a little bit, shall we? Because it makes me because it makes me think a bit about your interpreter problem and the certified versus non-certified, and something to consider. So, in the law, if you're going to court, there are provisions that don't require you to have a certified interpreter. And there's a couple of cases, uh, Korea and Torres come to mind. And they talk about the idea that your linguist interpreter is just a language conduit. You know, you can find the inherent reliability using certain hallmarks and you can use them that way. The answer to the courts on the WCIB side or even your criminal courts, where it's like, well, I know you can have people that are non-certified. Why is this a problem? Well, we're back to no, you can't, because it's not an issue of can there be uncertified, the issue is may there be. And the regulation, whether you like it or not, says they need to be certified inside the comp system. So we're back to if people don't know that there's that provision and able to say, I understand that intellectually you say this doesn't make sense. The issue is it's a statutory universe, and the rule is what the rule says. It doesn't matter what you think or how you feel about it, it's what the rule is. Apply it.

SPEAKER_01 42:24

Right.

SPEAKER_02 42:24

Is I think what gets lost in some of the translation. But I think it gets lost because I'm convinced that people don't necessarily know what the rule is. Again, they may know, well, it has to be certified. Well, why does it have to be certified? Well, because here's the rule that says it has to be certified. Right. And if you lead with, here is the standard, and it's the standard because I can point to here's the standard, here's the definition, here's the legal authority that interprets this, my interpretation's correct. Now what did they do? But it made me think about that when I was listening to you guys talk about interpreters and and perhaps why there's some resistance, because it doesn't instantly resonate because we know we don't have to use them when you go to court. Right. The reason why you have to on your side is because the rule says you have to. So by definition, whether or not they're certified is a material point.

SPEAKER_00 43:08

I have a real life example with an experience with the issue of interpreters and certified versus non-certified. And my my direct experience has been I was a field investigator for a long time. By the way, Michael Cariati's calling. Let me let me get Michael. Hey, Michael, I want to let you know I hey Michael, how are you? Right now, and you're calling. We're recording right now, but we're live in a session, and I could not miss your call. Can do the podcast. Yes, Michael. I'm so happy right now. Can you tell? Thank you. Well, and Kate's smiling too. Kate's excited too. Thank you. Thank you. And can I keep this phone call on this episode?

SPEAKER_02 43:48

Sure thing. Yes. Thank you, Mike. Appreciate it. I am. Good to hear from you. I'm sure we'll talk at some point.

SPEAKER_00 43:54

Yeah, I'm looking forward to it.

SPEAKER_02 43:56

Thank you, Michael. Bye, Michael.

SPEAKER_00 43:58

Great evening. Bye. Oh, hi. How lovely was that? That's fantastic. Love that guy. I do too. We need to, you do know that I can do more than one guest on an episode. So it would be lovely to have you and Mike on Facebook once.

SPEAKER_02 44:10

You know, Shoddy and I tag team taught for years.

SPEAKER_00 44:13

Love Shoddy.

SPEAKER_02 44:14

Love having her on. I'm trying to think, were you there the year she and I did Kate and Shoddy walk into a bar?

SPEAKER_00 44:18

No, but I was there for you and Jim, which was awesome. And you guys you guys played uh Welcome to the Jungle.

SPEAKER_02 44:26

I can't hear that song without thinking about that class. So yeah, Kate and Shoddy Walk Into a Bar was us teaching conspiracy law and helping people understand what a conspiracy is and isn't a conspiracy. So we did this whole thing that, you know, she and I, as underpaid, underloved government servants, decided that we knew how to commit fraud better than the bad guys because we knew where the tripwires were. And so we decided we were going to pat our retirement. And so we did this whole thing with she and I um so we were sitting at Knuckles at NYCA talking about this. And you got the guy in the booth next to us who wants to help, and this and this and this. And by the time we had woven the whole story, we then said, okay, was there a conspiracy formed? If so, what was it a conspiracy to do and who was involved? And then we walked through all of the various pieces with with the attendees. But yeah, so Shotty, Shoddy and I go way back having funny. So did she ever tell you the story of how she and I met?

SPEAKER_00 45:18

No. Can you can we talk about it on the episode?

SPEAKER_02 45:22

Yeah, we sure can. So I got uh asked to go up and teach at then NYCHA now AFA. And it might have been the first time I was teaching, and they asked me to come in and talk about corporate practice of medicine. And it was because of the case that I had walked in that they were all laughing at. And when people said, Oh my god, she got it the store. How did that happen? And I went, I don't know. Let's talk about it. And so I remember her sitting near the front and she raises her hand like she does, and she says, Ms. Zimmerman, you know, uncertified practice of medicine, that's just a misdemeanor. Are you really thinking that we should go ahead and deal with misdemeanors? And I pointed out that the insurance fraud that flows is a felony. And oh, by the way, conspiracy to commit a misdemeanor is still a felony. And frankly, I'm of the opinion that you kick them in the shins however you can get them.

SPEAKER_00 46:10

Especially after the labor code 4615.

SPEAKER_02 46:13

Yeah, but it just but that was that was the first of Shoddy and I meeting when she busted my chops. That is so classic, shoddy. I know. And you know, I just adore her. She is just an squats you across the face and you ask for another. She really does. And and her go with God that she always has on things, I just I love that. But she she's just phenomenal and she's just fearless. I love that about her. She just, you know, rack'em as she was what she used to say. Yep, just rack them. We'll go. You want to play, rack them. Do you think it's at all interesting? And and no slight to Michael, but do you think it's at all interesting how many of us are women that that really got deeply immersed in this along the way?

SPEAKER_00 46:53

It's funny that you mentioned that because when I started in this industry in Texas, I would be, I would go to the monthly trainings that they would give out, and I'd be like the only woman in there.

unknown 47:04

Really?

SPEAKER_00 47:04

Forever, for years. And I remember one year I was I was teaching in Albuquerque. I I did a um I did a capping kickbacks presentation in Albuquerque, and there were like a thousand people in the room, and they were almost all women. It was like three quarters women. And before I started speaking, I said, I'd like all the women to stand up, please. And they were all like, Okay, well, stand up. I said, look around, because I didn't have this luxury when I started for years. I said, I'm really impressed and I I applaud all the women in the room. At the end of the day, the complaint has been for years now that it's hard to find women in leadership and women being recognized in law enforcement and in the private sector.

SPEAKER_02 47:45

Think about the and I don't know, maybe it's a confirmation bias to some degree. Maybe it's because I ran with other women. Okay. But I think about, you know, when I started, there were a number of women, but I didn't know a lot of them real well. And then once it started kind of coming online, I mean, you know, Shoddy, Erica Mulhair.

SPEAKER_00 48:07

And I know for wonderful.

SPEAKER_02 48:10

Yeah, she love Erica. And nothing against Matt. I mean, Matt's brilliant down there too. Yeah. Yeah. But I remember somebody coming in one day and they were talking about how they really were working to see how to get jurisdiction and venue into either Orange, Kern, or Riverside. Right. Because of the three of us. And then I think about some of the SIU people. There was you, Lori Holtman, Jenna, you know, Jenna. Oh my God. You know, and I and that's interesting. And like I said, maybe it's confirmation bias, but it just seems like there's been there was a group of very, very strong women who all kind of stepped in in that same space of time and and kind of worked on things together. And I was always impressed by that. And I kind of thought about it at one point. And I had somebody ask me once about why I if I had any thoughts about why there were. And the big thing I can come up with is again, it's not, it's not the glamorous work. It's not. It really is a space where I think women have been able to come in and and carve it out and make it their own. And people have been, whether it's that they didn't care enough to pay attention and think, hey, I could do something with this or what, but I think it really gave us the the time and space to kind of build it and make it our own. Right. And it it's it's kind of a neat thing to see. And and you know, not taking away anything from from the various men that I've worked with over the years. I've just the women that I've worked with in this have just been amazing, amazing pe women.

SPEAKER_00 49:35

They just major diggers. I think you have to be a really great digger, you know, like a badger badger mentality.

SPEAKER_02 49:42

Maybe that's it is because you they joke about the difference between men's brains and women's brains. And I I heard it analogized as that men are like, if they walked in, it's like a warehouse and everything's in boxes and it's neat on the shelves, and you know, they can take down a box and they can be in the box, but they got to close the box and put it back on the shelf and then pull out the next one. Women, there's in the same warehouse, but the boxes are all over the floor and the stuff's falling out of the top, and you're in 18 of them at the same time. But that's looking at fraud. Yes. Is is how to look at that mess and figuratively turn down the noise and find the avenue and just keep digging.

SPEAKER_01 50:18

Yeah. That's an interesting thing.

SPEAKER_00 50:22

Yeah, that's interesting you mentioned that because I know there's a lot of other women um in this space who don't want any recognition. They want to quietly do their work and do their digging, and they just really maybe it's an introverted thing. I'm very extroverted. I love public speaking and I haven't, yeah. Like you know, like you're extroverted. I have no idea. That's what we that's what we get each other. But it's it's interesting you say that because also what I think makes a a person really successful in the space too, and in yours as well, is you've got to really be able to talk with someone face to face and talk about the difficult things and be personable, relatable. That's what I have found that helps make me successful and my work successful, is how I've been able to just talk to anyone and get anyone to tell me everything. Um, I think women Oh, you do the Jedi mind trick beautifully.

SPEAKER_02 51:13

You want to tell me all of your secrets. I want to tell you all my secrets. You want to tell me you were the grassy knoll shooter. I was the grassy knoll shooter. I mean, it just feel free to talk about me, Kate. I love it when you know some some of the stuff that you brought in over the years. I just I was always impressed when it came in the door because you had your ducks in order. You made it very easy to pick up and know exactly what the problem was. There was never the I think there might be a problem. I'm not sure what it is. Which which which those were fine too. I mean, that's that was part of how I viewed our role in at least they brought them to you, right? Yeah, absolutely. And I did, I always thought of that as being part of our role, you know. We were supposed to do outreach, and I looked at outreach as helping educate. Right. You know, there's no shame in not knowing something. There's a shame in not asking when you don't know, when there's people who can answer it. There's a shame in having somebody give you the help and then ignoring it. Right. But there's no shame in not knowing.

SPEAKER_00 52:17

Right.

SPEAKER_02 52:17

But no, uh, your your stuff was always together.

SPEAKER_00 52:21

I appreciate that. It helps when you get the bad guys to tell you everything, their their scheme, you know.

SPEAKER_02 52:26

Okay, we're back to better lucky than good. So our mutual friend, Mr. Bill, the way I met him is my phone rang in the office. Uh what have been January? Brilliant. January of 08. And he says, Hi, I'd like to report a fraud. I was like, Did you really do that? Yes, he called me and says, I'd like to report a fraud. And so he told me the story, and I said, I am really fascinated. You know what? I've got my quarterly planning meeting tomorrow. Let me let me talk to my DOI guys and see what they think. And we got to the meeting and we sat down and we're going around the table with who's got what, and we're okay, I like this. Because I mean, you just you can't take everything. You just there was not enough hours in the day. And I said, Okay, before everybody starts on this real deep, I've got one that called yesterday and I really like this one. And the late great the late great Mark Jorn um said that's the case. So this was January of 2008. April 15th, 2008, Mark's efforts put 300 and 350 agents in the field serving search warrants at 52 locations. Hello. So inside of 90 days, we had absolutely overrun the CFT, the computer forensics guys for the state of California. We're importing them from Nevada to make sure we could pull the computers. And that case ended up being ultimately the case I said that was the appeal Pierce. Yes. He was the primary chiropractor in that. Wow. Yeah. I mean, it watching him work was electrifying, absolutely electrifying. And watching, you know, Daryl and Ray devised an evidence handling because I mean we had all kinds of paper. Where when the case finally went to jury trial in 2015, we literally could put our hand on any sheet of paper and tell which numbered document it was in a folder, in which desk drawer, in which room, in which location for tracking. Absolutely amazing, amazing work on the part of my CDI investigators on that case. Yeah. I mean, the notion that you could go from a phone call, I think there's a fraud, to having that sky, that scale of operation up and running in less than 90 days is just, it's unheard of.

SPEAKER_01 54:35

Yeah.

SPEAKER_02 54:36

But when you talk about the people giving up secrets, that whole case happened because Bill had knocked on a door and spoke to a physician who said, you know, I always thought someone would come asking, would you like the records? Because when they left, they, you know, they were carrying boxes of medical records with them from A to B. And when they left the company, nobody asked for the records back because they didn't care. The records didn't really matter. And so she literally had the box of records in the garage. Come on in, have a cup of coffee, let me get the records for you. And so, you know, when we talk about better lucky than good, sometimes things like that happen. You know, I know, I know sometimes people criticize Department of Insurance. And you know, like every entity, I think there are things that can be done better. We talked about some of the training.

SPEAKER_00 55:26

Yeah.

SPEAKER_02 55:27

But to watch that operation come together was probably one of the most interesting and most amazing things I've seen in my life. Wow. I mean, it was it was like a military operation on steroids. And, you know, you got what was then the bureau chief at the command post where we were doing rollback warrants and running them down to the judges. Because of course, you know, you get here and find out that, well, they actually have another office and the records are over there kind of thing. And I remember him literally running out the door, credit card in hand, to go get a U-Haul. Because when they had done the reconnaissance at the main office, which was in Bakersfield, where they were doing all of the billing out of, which by the way. What about all your pickup trucks out there? Well, check this out. So they had gone in to do reconnaissance, and and Ray Cheragino, the the guy who was my evidence custodian, he had wanted to get an eyes on. So he he was like Columbo. I mean, he's this older guy, but he he walked in and he's like, Yeah, I see there's a lease sign. Is this the is this the first lease place? Oh, it's not. Well, would you be willing to swap? Because I really like the exposure on this one, and he's looking around at the whole thing. So he gets out there that morning and calls in and says, you know, we're at location one. This is ready to go. And then he found out that what he had thought was a half-wall was actually the back of a row of five drawer safes. Safe file cabinets. Wow. And they decided, well, they had gotten a permeation with fraud warrant signed by the judge saying everything here is fraud, take it down to the wallsteads, basically. So yeah, the the bureau chief actually went and rented a U-Haul to go pick up the safes to take them out of there. So I mean, when they have the ability to just do phenomenal things on a really quick timeline. So that was good. But yeah, that was that was one of those when you talk about the Jedi mind trick. That's what started us on this was the Jedi mind trick was this was all because Bill knocked on a door, and I never let him forget that you realize this you did this to me.

unknown 57:18

I love that.

SPEAKER_02 57:19

Yeah, 11 years later, yeah.

SPEAKER_00 57:24

Well, it's away from what we were just talking about, but I'm dying to know about how do you decide between doing a freelan hearing and a grand jury? You're gonna laugh at what I'm gonna say.

SPEAKER_02 57:34

It sounds horrible. I've done both. The advantage of the preliminary hearing, if you have a detective who can really work it, again, you're gonna hear the name Ray Chiragino is my hero. I had that man 115, which is the ability to testify to hearsay in a preliminary hearing. 35 witnesses at a preliminary hearing. And we were able to really weave together the standards inside of comp, the standards for the med board, what they were doing, what the expert had to say about it in a way that made it very clear why what they were doing was wrong. Not the preferred way of doing it. It was about a two-week prep with him, and he was sweating bullets the whole time and he did phenomenal. I just can't say enough about Ray. I love him to death.

SPEAKER_00 58:16

Where is he now?

SPEAKER_02 58:17

He passed away a number of years ago. And truly, truly a special man.

SPEAKER_00 58:23

World lost an angel. Pardon? World lost an angel, huh?

SPEAKER_02 58:28

But um, and so that worked. But honestly, some of the grand juries I did were back to the training idea. It was almost easier in some instances to bring in the percipient witnesses to testify and get that probable cause done on an indictment than it was to train up somebody to be able to write a probable cause declaration that would be necessary to charge by complaint to go by preliminary hearing. And it's it's it's not that they couldn't, but there's something seems a little off to have me working with you to teach you what I need you to be able to put into a PC deck. And I was never comfortable with that. So in those instances, you know, obviously I'd use my CDI guys if they had done a warrant, they obviously were the custodians of you know what had been taken. They could talk about what was taken in the warrant, they could talk about chain of custody. But I wasn't gonna have them, you know, spend hours and hours and hours having something explained to them by say Jim Fisher or somebody from Bureau of Postsecondary Ed. It was easier to just bring in the person from DIR to talk about the system. Easier to bring in the person from BPPE to have them talk about what's required to to do compliance with the job displacement vouchers or whatever the niche topics were.

SPEAKER_01 59:49

Yeah.

SPEAKER_02 59:49

So from my perspective, I I liked that. The other thing I liked is I always liked being able to look at my uh my witnesses. You know, there's there's something powerful in breaking them. If that sounds that sounds horrible to say it that way, but uh Did you say breaking them? Yeah. I mean, I would literally sit there and stare at somebody and let them stare at the desk looking like they were gonna throw up and let them know that they're not moving until they answer the question. And so we would go through that painful part in front of the grand jury. And from that point on, it was fine. A, you have a very clear transcript that your defendant can read and say, this is what this person's going to say, and I'm really up a creek and I better cut a deal. In the alternative, it made it much easier when you got to the courtroom because they already knew they were going to answer the question. They've already answered it. We didn't have to have that painful just waiting for them to are they going to say it. So yeah.

SPEAKER_00 1:00:42

And along those lines, another kind of um issue that I I've seen over the years is how people testify. So I'd like to talk to you about that. Okay. I I like to hear what prosecutors need from their witnesses when they're when they're testifying, because I've seen some some okay testi testifying over the years. I've seen some really bad testifying. So would you go into what a prosecutor needs from their witness on the stand?

SPEAKER_02 1:01:12

Well, it starts before you ever get into the courtroom. What do you need from your witness? You need a witness to be completely honest with you the good, the bad, the ugly. And I would always tell my witnesses, look, I don't care how bad you think this makes you look. I don't care. But I need to know it because it's the only way that if there are somebody who's a semi-cooperating witness, it's the only way I can protect you. You know, between there are either motions that can be run to exclude stuff that would be irrelevant but potentially embarrassing, or the line of question that's going to put you in an order that you can understand it and get to where we're going. The big thing is candor. Especially if they were a witness from a carrier that, like, oh, you guys have like buddied up and holding yards. And you know, what instructions are we giving? I was told to tell the absolute truth and to be polite with whoever is asking the question. Hey, that works. I think. So I mean that that really is a thing. And oh, by the way, you know you're coming in. It's not like we plucked you off the street and threw you in the car. So showing up unprepared, you know, you think about insurance fraud cases and how long they take to get into a courtroom. There's no excuse for you not to know what you're there to talk about. There's no reason for you not to be able to explain how your company codes things so that you know definitively that this number matches this number, which means we're talking about this patient type of thing. Right. I mean, those were the big things. And they sound, you know, they're very fundamental, but it's amazing how often the fundamentals get lost in the weeds. Everybody's really focused on. The other thing that drove me absolutely nuts, and I never did it again after the first case, was I never liked carriers that would try and designate a witness.

SPEAKER_00 1:03:09

Interesting.

SPEAKER_02 1:03:10

Like it was some sort of a ta-da, I've now dubbed you. You are our official witness. Because inevitably it was some guy from a corporate office who didn't know anything about the case and came in and they're trying to testify. I'm like, no, no, no, no, no. I want the person who actually had boots on the ground, actually was out digging in the dumpster. What did they find? What did this mean? Why did this have significance? And so the first case I did, I had a carrier that sent me their official and literally had no clue what they were doing. And fortunately, it was in a grand jury. So, I mean, it was in the transcript, but at least it wasn't playing like in the middle of the I was able to say, okay, this is not going to happen. You're going to send me the right person now, and we will schedule another session and we'll do it the right way here.

SPEAKER_00 1:03:54

Yeah, I remember some trials that I that I said and where the judge would reprimand um the witness. A few times I saw to where it was on the insurance carrier side where they did exactly what you said. They sent someone who had no idea about SIU fraud, anything like that. And then I saw actually a state official who got reprimanded. Um, the judge actually said, You don't even know anything about this case, and you never read anything. You you haven't read up on this case at all, have you? And the state official was like, No, I haven't. And he's like, get out of my courtroom. You know, like what are you, you know, what are you doing here?

SPEAKER_02 1:04:30

And they should. And you know, um, I can see how it can happen because it happened to me. That's another one of those things I would want somebody who's a baby prosecutor to know. It's okay to say, no, you're not going to tell me who the witness is going to be. We're going to talk. I'm going to make sure that I'm comfortable with you. And if I'm not comfortable with you, then you're going to give me somebody who I am comfortable with. You're not going to tell me that only this person has the authority to speak. You know, subpoenas aren't requests for tea. And I and I get that to some degree there's a, well, we're sending for the person most knowledgeable or somebody who's designated a custodian of records. And I always laugh because again, that's not a that's not like a IW the custodian of records. You know, it just means that you're somebody who can speak to how are they maintaining capt. And so, you know, you can create a custodian out of just about anybody. You just have to tell them what with the records and they can attest to them. Um, but yeah, that that never flew. And as witnesses, that made me crazy. And like I said, it really only happened the one time because I I wouldn't let it happen again.

SPEAKER_00 1:05:35

I was taught a certain way of how to testify. I I was taught by some of the best in the industry over in Texas in the district courts, by some really great prosecutors and um some judges as well. So I kind of want to push down on this because I want to take the opportunity where we have you right now for anybody who's about to testify, either a criminal investigator for their prosecutor going to testify, or someone from the insurance side, private. Sector. How when you're asking questions from your witness, how do you want them to respond? Because we see the stuff on TV, right? Where is the drama? And that's what a lot of people see. And that's kind of like their instruction, right? If I get on the stand, you know, maybe I'll use some emotion and maybe I'll over-answer. So I would like for you to tell people who might be testifying next week or next month or sometime this year for the first time. When you ask a witness a question, how do you want them to respond? And as far as uh what type of framework with the response?

SPEAKER_02 1:06:32

Well, first off, I have complete compassion for anybody who has to testify. I had a rare opportunity as a prosecutor to testify in a Really? Yeah, yeah. Right after I joined the Information Strike Unit, as a matter of fact, we had a um a five victim homicide in Kern County that garnered national media.

SPEAKER_00 1:06:51

And there was someone steal a cow.

SPEAKER_02 1:06:53

I'm sorry? Did someone steal a cow? No, no, it was a homicide.

SPEAKER_00 1:06:57

Right, that's what I'm saying. Someone stole a cow and they were because you say they joke in Texas to where, you know, um there's no death penalty for horse thieves.

SPEAKER_02 1:07:05

I get it. Yeah, yeah. No, this was a guy who killed his entire family. And I'm sorry. I know I'm a I'm a little, yeah, but uh I had the fortune or misfortune of having previously prosecuted one of the primary witnesses who put the defendant in Bakersfield over the time frame that the killing had taken place. And when it was all said and done, they said, fine, we'll bring her in and and she'll have to to lay down that there hadn't been a deal for testimony. And I still maintain that the defense attorneys on that played it wrong because if they had been smart, they would have had my, it was my then, she wasn't the elected yet. She became our next elected. Uh say, Did you have a deal for testimony? No. Thank you. No questions, and then argue that she's a junior member of the office. What's she gonna say? He didn't do that. He decided to object on foundation and the game was on. And so she just starts asking me all kinds of crazy stuff to what do I know? So I I appreciate the stress that somebody's under testifying, particularly if they feel like they don't know what's gonna be asked. I kept waiting to get hit upside the head by the judge on the witness stand because I couldn't believe the stuff we were getting into, knowing there's no way if I was prosecuting a case, I could get into this stuff, but hey, not my case. It's all good. But um, the biggest thing is I would tell somebody who's trying to testify. First off, you know more about what you're talking about than anybody else in the room. Arguably, your prosecutor should know everything you're gonna say, but you still know more about it. You were there. You you did the calculation, you talked to this person, whatever it is that you're talking about, you're the expert in the room on that particular point. So, first off, don't freak out because you do know more. Listen to the question that you're being asked. Don't try and answer what you think you're being asked. If you're not sure what you're being asked, it's perfectly acceptable to say, I don't understand. Or could you rephrase that? But you know, the the big thing is is to take a second, breathe. When you get asked the question, it's okay. Inhale before you answer and gather your thought and then and then give the answer to the question and then trust that somebody will ask you the next question to get the next piece of information out of you.

SPEAKER_00 1:09:13

I practice my I practice my walk up to the the witness. You practice your walk. It's amazing.

SPEAKER_02 1:09:19

People don't do that. I can't believe that people don't realize I'd like to think prosecutors, show people courtrooms ahead of time and say, here's what's gonna happen, or they draw them a map and say, Here's what's gonna happen. You're gonna come in from this door.

SPEAKER_00 1:09:34

Yeah, I in fact I designated a song. Um you're walking to the beat of something in your head. I'm telling you, who is that? Um, what was that song? You're gonna laugh. I don't know how much you know of pop songs, but it's the Demi Lovato, and it was uh That's I it's after I turned the radio off. I think it was uh Demi Lovato, sorry, not sorry. I would practice my walk like I was on the runway, and I had this song in my head. So that's what I would use to walk up to the stand on some of the major cases that I testified on. What would you what would you tell your witnesses on how to respond to the defendant side? The same way. Attorney, same exact way.

SPEAKER_02 1:10:17

Yeah, and and the reason why I would do that for a couple reasons. One, I took it very seriously as a prosecutor that we wear the proverbial white hat. Okay. I don't need to hide things, I don't need to cover things up, I don't need to massage things. I'm there to have the truth come out. And based on what I've reviewed, I believe the truth to be that the defendant committed a crime and I can prove it. But I never wanted a witness to destroy their own credibility by looking like a hack for me. You know, I I really wanted it to be, you know, somebody, the jury's gonna call the balls and strikes, we're gonna play it straight. And part of that, in my estimation, was it didn't matter who asked the question. You treat them politely, you answer the question. If you're being mistreated, it's my job to intervene. It's not your job to intervene. Now, that being said, I remember bringing in Jim Fisher and we were doing a 402 hearing on the Pierce case.

SPEAKER_00 1:11:12

Okay, what's a 402 hearing?

SPEAKER_02 1:11:14

Okay, the 402 hearing is a hearing that's done out of the presence of the jury where the judge basically gets a preview of the evidence to decide what's coming in or what's not coming in. Defense wanted to take him on to try and challenge his ability to testify to certain things. And I remember it was we were in this brand new courtroom and it had a really low kind of witness stand. It wasn't like an up on the like in the witness stand type thing. It was like a chair on the ground type of thing. Jim slides his chair back slightly, leans over, puts his arm up on the counter in front of him, and did everything but do a come on motion with his finger at the defense attorney with are you ready? And I just totally, yeah, uh, don't do that. But but yeah.

SPEAKER_00 1:11:58

But Jim can get away with it, that guy.

SPEAKER_02 1:12:00

Well, yeah. Well, I mean, there was nothing he was gonna get asked that Jim wouldn't be able to answer and hand back to the guy. But it just, you know, that's probably a little overconfident. It worked where we were. He didn't do that in front of a jury, obviously.

SPEAKER_01 1:12:14

Right.

SPEAKER_02 1:12:15

But uh, you know, you just you just polite, you don't yes, you have an interest in the outcome, particularly if you're a victim, but I've always taken the position that somebody can be a victim, and the person that's accused may or may not have been the person who did the victimizing. Because there there is an option for that. Obviously, to get to court for trial, I believe that this is the person who did the victimizing, but you still are polite, you know? And if you aren't, then you start looking like you're the problem. And and you know, yeah, you're kind of the main character, but you're not really the main character, if that makes any sort of sense. Don't make it about you. And so when you come in and start getting obnoxious with defense counsel, you've now made it about you. You want to keep it on what that guy did, is kind of how I look at it. One of the cases that I You could totally picture Jim doing that, can't you?

SPEAKER_00 1:13:05

I remember walking up to uh to testify in one of the major organized crime cases, and defense counsel walks over to me. And I didn't know what I, you know, I was doing my walk that I had practiced to that song, the Demi Lovato song, right? And all of a sudden I've got his big face in front of me, and he goes, Tina, he goes, I really like you, but I'm about to crush you. And he's like, and I and I looked at him and I'm like, You're such an idiot. The prosecutor is right there. And she's like, My God. Okay. Yeah, but if you knew this guy, I was like, whatever. And I get, I get on the stand and he didn't do that. He was actually like really polite. He was trying to psych me out, but I'm like, dude, former narc out of Texas, you can't. I'm a New Englander, man. I'm I'm like, you can't, I love this. Bring it on. I mean, and I, you know, I told him later, he walked up to me, he says, Oh, I'm sorry about that. I'm like, that excited me. I was like, totally, you know, got me rocking.

SPEAKER_02 1:13:59

Oh, I can picture, I can picture you just going, please.

SPEAKER_00 1:14:02

I was, I loved it. I'm like, please do that again. I mean, I need my personality. I love stuff like that. That gets me rocking.

SPEAKER_02 1:14:09

So um they they've gotta do something to try and rattle you because Shoddy once talked about, you know, the paper is the photograph of the crime.

SPEAKER_00 1:14:17

I love that.

SPEAKER_02 1:14:18

And it's like I, you know, I kind of keyed off of that with the paper may be a lie, but the paper doesn't lie. So so what are you gonna say? You're gonna say the paper doesn't say what the paper says.

unknown 1:14:28

Yeah.

SPEAKER_02 1:14:29

So you gotta come up with something else. If you if the case is truly about what does the paper say and was it true at the time you said it, and you're the person who's responsible for the paper, there's not a whole lot to do other than try and turn it into a bit of a circus or you know, psych out the witness. But we're back to you knew your stuff. There wasn't anything he ultimately he could do to you. I mean, he can't take away your birthday, he can't stamp your was it the military when you were in the military, do you guys talk about stamping meal cards, no dessert on Sunday as a punishment? I was gonna be used to talk about, you know, I'm in the military. What are you gonna do to me? Take away my birthday, stamp my meal card, no dessert on Sunday, bend my dog tags, you know, there's nothing you're gonna do to me. Kind of the same idea when you're testifying in these cases. There's nothing they can do to you. They can't take you out back and beat you up. And actually, you staying calm and and answering the question and being polite, juries don't want to watch somebody beat up on somebody who's being polite and thoughtful. So as soon as you as soon as you start getting owly with the defense counsel, to some degree, you've opened the door for them to be nasty.

SPEAKER_00 1:15:32

Yeah.

SPEAKER_02 1:15:33

Let let them look like fools.

SPEAKER_00 1:15:34

Yeah. Yeah, I like that. Another question for you for witnesses who have never testified before, let's say investigators, can they bring their own notes with them on the stand? What's the thought on that? Okay, yeah.

SPEAKER_02 1:15:47

Yeah, I I no, no, I don't want you bringing your notes with you. First off, we're back to you know your case, you don't need crib notes. Start start there. Okay. I would always help out my witnesses because I understand there are places where you're trying to deal with sequences of numbers or otherwise. My personal habit, I would never ask my witness, and what was the number for that? I would give them the number in the question. Are you referring to let's talk about claim number, blah, blah, blah, blah, blah. Previously identified as this. And inevitably, I would have the document already marked and would have given you the copy of what we're working off of. It really is a hitch in the gide up when all of a sudden somebody goes, Hey, um, you look like you're reading something up there. What is that? And nobody's seen it or heard anything from it. That that's a bit of a problem. Yeah, don't be doing that.

SPEAKER_00 1:16:39

Okay, so note to new testifiers.

SPEAKER_02 1:16:43

And all of this is subject to your individual prosecutor. I mean, I you've heard me say this before. Your mileage may vary. So every jurisdiction is going to look at things a little differently. Every prosecutor, we're back to it's an art, not a science. So this is stuff that if you're coming in to testify, you should have had a conversation with your prosecutor. If for some reason you haven't, you need to make sure that you do ahead of time and say, How do you feel about this? Here's what I'm concerned about. How would you like me to handle this situation? And then find out from them. Because you don't want to walk in and not have a plan with the prosecutor as far as how you're going to handle if there's something you don't know or something you're unsure about. And remember, I don't know is an acceptable answer. You know, you you do have that. But again, this is that communication and there needs to be a level of trust. You know, you're you're telling us what you know. You need to trust the prosecutor to take care of you, but the prosecutor can only take care of you to the degree that you've communicated with them. I'm concerned about this. How would you like me to handle if I get asked about a number that I don't know? What what response would you want me to do? How how would you like this? That's all stuff that should be done ahead of time.

SPEAKER_00 1:17:52

Glad that you mentioned that because it's an interesting phenomenon. Americans, and especially someone like an investigator, investigator type personality, we don't like to say we don't know, especially as it's attached to a case that we've we've worked.

SPEAKER_02 1:18:05

It's so hard to say. Okay, my I told you about the late great Ray Cheroghino. Okay. So that prelim where he 115, 35 witnesses, he had defense counsel so angry. When we talked about the late great Ray Cherogino, we did a preliminary hearing, which is the hearing in California and I imagine some other jurisdictions, where you put on evidence to convince a judge that there's probable cause, which is an evidentiary standard, to believe a crime was committed and the defendant is the person who likely committed it. In California, certain investigators in law enforcement have the ability to testify to hearsay statements, statements offered outside the courtroom by somebody for their truth value without bringing the witness in. Helping me out on this case came in and we had 35 witnesses that we would have had to bring in to testify. And he actually testified for each of them by weaving their testimony together. That's insane. It was fantastic. It was fantastic. It took us two weeks to prep it. It was fabulous. He was scared out of his mind, but he did great. And he says, Well, Kate, what if there's something I don't know? Then say I don't know. So we got to cross-exam, and defense wanted to start asking questions. And defense was asking questions, and Ray just kept saying, I don't know, I don't know, because he didn't know, because he hadn't prepped that part. And I told him, I said, it's gonna hurt your ego. And I know this because you don't want to say I don't know. And you know, you're gonna have him spitting, and he, defense counsel, did not disappoint. You know, tried to make it sound like Ray was lazy, that he didn't do things or otherwise. But, you know, I got my judge on board that first off, this isn't a discovery vehicle. The issue is is there cause? He's not challenging, is there cause? He's trying to find out whether other things that were done or considered that doesn't interplay with whether or not we've put on evidence to show probable cause. And it worked brilliantly because defense was losing their mind that they couldn't rattle him. And, you know, Ray was like, I can't believe you made me do that. I'm like, but it's the truth, you know? You're we're putting on this thing. Yeah, there's actually, I think it's a very strong witness who has the ability to own up to what they don't know.

SPEAKER_01 1:20:16

Yeah.

SPEAKER_02 1:20:16

And it's okay. Nobody knows everything, you know.

SPEAKER_00 1:20:20

Another question I have for you is when someone's testifying and they're responding to either you and or defense counsel, where do you want them to look? Who should they be looking at when they're responding?

SPEAKER_02 1:20:31

I don't get real uptight on it. I don't like somebody who turns and smirks at the jury when they're answering. And I know that the jury is your ultimate audience, but at the same time, you know, it's it's not comfortable necessarily. Do you want them looking at the jury at all? If it's natural, yes. If it's creepy, you know, to the to the degree possible.

SPEAKER_00 1:20:55

Um, I remember being taught you don't look creepy at the jury.

SPEAKER_02 1:20:58

You know, when I took trial ad a million and a half years ago, you know, they'd always tell us, if possible, to try and position yourself kind of at the end of the jury box so that somebody's naturally talking to you and kind of looking in the direction of the jury box. I know a lot of courtrooms they've gotten away from allowing prosecutors to rove around. They want you stuck behind a podium of some kind. And so I would, you know, I tell witnesses, I'm like, talk naturally.

SPEAKER_00 1:21:23

Okay.

SPEAKER_02 1:21:23

You know, you're I probably wouldn't turn around away from the jury and stare at the judge unless the judge is the one who asked you the question. That's a different kind of a thing. And then it's a respect issue. But, you know, to the greatest degree that you can just be natural and you know, I know there are people who write questions. That was the one thing I used to get. Well, do you have questions? No, I don't have questions. I have the facts that I need that are in your possession. I'm gonna ask you however many questions I have to ask you until I'm satisfied we've gotten that fact in. And I always thought that that gave me a lot more flexibility because if there was an objection to the way that question was phrased, and for whatever reason the judge decided they were sleeping and just woke up and gave me a bad ruling, that's okay, we'll just come back around at it in a different direction. It also meant that the witness didn't have to try and memorize here's a set of questions, because they're already nervous and we're talking about, you know, what do I have to remember or not remember? Why would I want them trying to memorize here's questions and answers? I need them to be able to think on their feet too. And so, you know, to the to the greatest degree that we could make it a conversation about what's happening or what did, you know, what did you see? Where were you? The better that you're able to do that, I think it plays better. Again, your mileage may vary. Other people may do it completely different. And that, if that works for them, I found that worked for me.

SPEAKER_00 1:22:37

Okay. Um, in our next episode, we're gonna talk about the fraud assessment commission because that's something I I do want to talk to you about. There's a lot, I really want to dive in the fraud assessment commission stuff, and I really want to cover what it's like for the prosecutor in dealing with you guys are supposed to be prosecutors, not grant writers, and not working on trying to fund, you know, find money for your own unit. So how do you feel about talking about that?

SPEAKER_02 1:23:02

I'm okay with it. Again, you know, everybody has a different experience. So Shadi's experiences are different than mine. Uh I was a chief cook and bottle washer type office. I literally was writing my own statistics. I was literally writing my own narratives. I think some of the bigger offices probably have grant writers that did it.

SPEAKER_00 1:23:20

Did you write your own grants? Yeah. That's a big deal. Yeah. Most people get paid a lot of money for that.

SPEAKER_02 1:23:26

I know, I know. No, I it was always kind of a frustration. I understood that you necessarily need to have accountability because it's the public dollar. Where is it going? Is it being used? The downside was I spent time telling people I was working rather than working. And to have to do that multiple times a year was really onerous. And it was it I used to kind of resent it sometimes because it was inevitably I'm in the middle of a case that I'm putting together, and now I gotta stop on the case because now I gotta stop and write a grant. Yes. And and you can't really tell your carrier victims, oh hi, I'd love to do this, but no, I've got a grant that I gotta do. And there's only so many hours in the day to do. Right. The other angle of it was Did you ever swim competitively by chance?

SPEAKER_00 1:24:11

Competitively, no, but I love to swim. Okay.

SPEAKER_02 1:24:13

So I was a competitive swimmer back in the day, and I actually was a competitive diver, if you can imagine.

SPEAKER_00 1:24:18

Oh my gosh.

SPEAKER_02 1:24:18

And how high? Not the big one, the low board. They always had a degree of difficulty they would assign to every dive. So, you know, you got your points for it being whether it was a reverse, whether it was in pike position or tuck position, whatever. And they they would grade that not all dives are created equal. I always thought that the fraud assessment commission should have a degree of difficulty multiplier because we're back to if I have six investigators, I can send somebody to go watch them unseal public works bids to then say I want to get their certified payroll to see if they're paying their premium. You know, when you don't have that kind of staff, when you don't have that kind of depth and you're saying, what do I think about this application versus this application? Well, of course I would love to do this. They talk about they want a balanced caseload. Try being a one-person shop and you're dealing with um, you know, two separate corporate practice of medicine pre-limb type things pending. And oh, by the way, make sure that you've got some uninsured employers and a couple of guys who are committing applicant fraud and a premium fraud in their foot for good measure or more. Plus, plus, plus, plus. It there really were times that felt like that you were trying to really spread the butter to the edge of the bread and and having a hard time getting it all the way there. But uh, you know, you you do what you can and you have to trust to some degree that they're they're doing something in the back room to make it equitable.

SPEAKER_00 1:25:42

I do is it a prerequisite to being in Kern County that you have to be really great at euphemisms? Because you have the best euphemisms ever.

SPEAKER_02 1:25:51

No, but I have been told. I I think you know, I think I developed it in in speaking to to my Kern County peeps in jury boxes. If you can come up with something that's a commonality that people can understand or it worked. I know.

SPEAKER_00 1:26:14

Were you the one that had to go in front of the commission, the fraud assessment commission, and state your case and ask for money? Did you actually have to do that as well?

SPEAKER_01 1:26:23

Yeah.

SPEAKER_00 1:26:24

What's some things that they hammer you on, ask you about when you're there? And and how long are you there? How long are you talking with the commission?

SPEAKER_02 1:26:31

It can vary. I honestly didn't get asked a lot of questions. I'm not sure why. I I I mean, I could I could say I certainly hope it's because I gave them good results for the money I was being given. And in general, it was pretty much a yeah, keep marching, Kate. It was always painful to watch them if they had counties that weren't doing what they thought needed to be done with the money they were being given. If you have siblings and you ever had to watch them be punished by mom and dad, and even though you weren't the one being punished, it was pretty painful to watch. Same idea as you're watching your colleague over there get spanked.

SPEAKER_00 1:27:06

I've been in some of those. I've watched some of those and I've seen that, but then I also see them still giving them the same money again, you know.

SPEAKER_02 1:27:14

Well, and and there's some interesting things that go into that. So, you know, Dawn could obviously give you the the real how the sausage is made, but you know, a portion of what you're getting is generally considered based on if you're a big county and you're getting a lot of referrals, you already are starting ahead of the game. And then comes the what are you doing with it? And so I do sometimes think there was, whether intentional or unintentional, I think there were at times some outcomes that were kind of baked into it to begin with. I'm not gonna criticize any other counties in the valley, but you know, I certainly I belong to a task force that worked with other people up and down the valley because that's one of the ways we would stretch the grant further in the Central Valley, is we knew we couldn't get offices large. Enough to have six investigators. So we did an MOU memorandum understanding. And when we had a search warrant in Tulary County, they would borrow Kern investigators and Fresno investigators and King's investigators. And now all of a sudden you've got six investigators type of thing. And so we would try and do that. The upside is you had more depth. The downside is now you have meetings that you have to have because you have to be working together, and that's a day out of your month that you're not working on cases. So there's there's pluses and minuses with it. But there was very definitely a who was the lead county in the valley versus who wasn't lead county, and it didn't necessarily always completely line up with what was being done work-wise or what the size of the cases were. But I I really think overall we were dealt with very fairly at the commission. Um I remember when Dale Banda was running things up there, and I remember him taking me into his office back when Pierce was first starting, and we had asked for just an unbelievable increase because I mean, we were going to be doing a lot of evidence processing, and we had the bid to do it because I, you know, we we weren't gonna start just tearing through this case. We had to be able to find things, and so everything had to be scanned and then indexed and everything else. And I remember him taking me in his office and saying, Kate, can you do this? And I looked him in the face and said, Yeah, I can get it done. And he believed me and he believed in me and and we got it, we got it accomplished. I remember calling him after we got the the guilty verdict on that one and saying, Dale, we did it. It it really it made me very happy to be able to call him and finally say, Yeah, it was it was finally done and put to bed. You know, there very much is a sense of um I used to call it the Janet Jackson syndrome at the FAC. What have you done for me lately? Like that. It's like, oh look, I'd love some of these cases to move faster. They they go at the pace they go at. You know, people don't realize that by and large, the prosecutor is very much on the timeline of the defense. You know, if they say they want to go fast, we have to be ready to go. They're not waving time, they have statutory rights to have their case done. If they say they need more time because they can't represent the guy adequately, even if you could somehow convince the judge that it's unreasonable, you've just built yourself in an appellate issue to say this person didn't have adequate representation. You know, if they want to drag their feet or I still remember our judge um scheduling the trial and finally just told these people, I don't care that you're doing work in federal court. Point here, you need to come here and do this. This is not your last priority. This is the date. Done, you know, type of thing. But uh in general, um, you know, each of the members of the FAC have their own perspectives and the things that they're particularly concerned about. And you you need to be mindful of that. The other thing is they're not fools, you know. It was always interesting because you'd see there was a county that you could see them starting to ask questions about things and it would be somebody that they've never seen before at the hearing standing at the podium. Um, I just transferred him last week, so I don't I can't answer any of this. Well, they they knew you were sending some sacrificial lamb that you were hoping they weren't gonna be too hard on. I mean, they they knew. I'm sure you've seen that one too, haven't you? Because inevitably it would be a county that they were like, okay, what happened here? I wish I wish I could tell you I wasn't there, but I'll get the information for you. God, yeah. But yeah, those those applications, they're quite comprehensive. Yeah, they cover everything from um the philosophy of where the program's going to what have you done to what do you think you're gonna do. There's just there's just a lot there.

SPEAKER_01 1:31:32

Yeah. It's a lot of work. It really, really is.

SPEAKER_00 1:31:37

For prosecutors who need to be prosecuting, less grant writing.

SPEAKER_02 1:31:41

Yeah. But like I I don't know if there's a better way of doing it. I mean, I know auto, they do a different matrix, and theirs is pretty much, as I understand it, almost entirely done statutorily. I mean, the number is the number, and it's a very small percentage that's within the discretion of what's going to be given or not given.

SPEAKER_01 1:32:01

Okay.

SPEAKER_02 1:32:01

With the with the FAC, I want to say was it 50% or close, right about there, that was the statutory, and then the rest of it is all up for grabs and you know. Yeah, Don mentioned the number thing. I used to know the percentages off the top, but I mean it was it a large portion of it was discretionary.

SPEAKER_00 1:32:18

Yeah. Don goes into that in in his episode, and he and he said that it it's been updated as well.

SPEAKER_02 1:32:24

So and and it may very well have been because it's been now a couple of years since I've done that.

SPEAKER_00 1:32:29

Yeah.

SPEAKER_02 1:32:30

I always thought it was interesting though that and I was always curious how much what was said in the meeting could change it anyway. Because there was very much a sense that they already knew what they were gonna do. You know, yes, we have to have a public hearing. I got the sense that it was more of a bully pulpit to let you know they were happy or unhappy than that there was truly a I've sat here and you've said something so amazing that now we're gonna give you a whole bunch.

SPEAKER_00 1:32:54

What would you say to the prosecutor who A is new to the insurance fraud unit, and then B, just finds out that they have to write a grant to fund their unit?

SPEAKER_02 1:33:05

Make friends with the LAU. That's the local assistance unit. They don't have cooties. They do talk to you, give them a holler and say, Hey, I just I've come into this. If your office for whatever reason can't easily put their hands on apps, you can get what you've done previously and you know, address what you put in there previously. Either, yes, we made said we were going to do this, and here we've met this commitment, or here's a reason why we didn't. Because I think that that was always part of what was something that helped make us successful is we held ourselves accountable and then would articulate either commitment kept or here's why this didn't, here was the challenge, here's what we're doing about it, or what the new timeline is. But you know, that's all stuff LAU can help you with. You shouldn't sit and suffer completely in silence. The other thing is I I don't know if they still have to do this horrific matrix of how many different ways can you parse what to this type of cases? Because they would have the type of fraud and how many defendant and look at it this way and look at it that way, and what's its complexity, and what are the requirements for complexities. I got to the point where, again, we did a lot of MacGyvering in Kern County just because we didn't have things to work with. We created an Excel spreadsheet, and each tab of the spreadsheet matched one of the sections of the statistical. And so when we were doing our intakes and our whatever, we would put them right in there from the beginning and then just move them through with the information, with the idea that we could at least finally pull it and put it in. Because there's nothing worse than that you've been working for weeks and now you're trying to do it, and suddenly if you count it this way, there's 15 cases. If you count it this way, there's 17, and which two am I missing?

SPEAKER_00 1:34:41

Right.

SPEAKER_02 1:34:42

You're trying to where was this? That was that was never fun. Is this a job for AI? Do you think? Maybe. My concern with AI would be particularly in the narrative section, the hallucinations um could really, really goof you up. You know, these are these are important documents, these are public records. You've got people attesting to things that are true. The last thing you need is AI deciding to throw two extra things on a list of items that didn't exist, or you know, coming up with something because they thought it sounded like a good idea. And for me personally, um, I saw a demonstration of it. I don't know that I've mentioned what I did when I came out of the insurance fraud unit. I actually went over to county counsel for a while and was the county's employment and labor attorney. And so my most recent training had been in employment law, and they were talking about doing a workplace investigation for discrimination. And the person was showing off AI and pointed out that they had only interviewed this the victim. They hadn't interviewed the subject. And when the report got generated, AI had completely created an entire report of investigation for an interview that hadn't happened. And so that one's an obvious one. I mean, it's frightening to think it would do that, but at least that one you'd catch. The other thing was is the victim had given a list of things and had named five items, and the AI had made it a list of six. So if the person hadn't gone back to double check their notes and had simply been reading along, okay, yeah, they gave me a list, they would have never caught that there had been this extra one inserted. Well, I've always taken the position that if I have to QC the writing that closely, it's easier for me to just write it and I know it's right. As opposed to, I hope you got this right and now I got to go through and you know cross-check every word to make sure it is. I'll I'll just write it. At some point it'll be better, but right now I don't think it's ready for prime time. And so it's my name that goes on it. I'm not going to put myself in its hands. I know you're really big into the AI stuff. And at like I said, at some point I'm sure I will get there. I'm just I'm a little slow at it. I want it to be right.

SPEAKER_00 1:36:41

I love it. I love it. I understand the limitations, but um, I'm excited to where it can go, to where it can really help us and support us to where you need, sorry to say you, but need less less people doing something that you that you need.

SPEAKER_02 1:36:56

I think there will probably be a short-term contraction in the anti-fraud world. But I think on the long term, people are gonna find that AI certainly still has its limitations. Yeah. And if you're if you're doing your investigations, sitting at a desk, picking up a phone and thinking, if I call somebody, oh, they answered the phone, ABC Doc, yep, it's there. You know, if somebody's gonna crawl the web and yep, there's something registered with the Secretary of State, it must be legit. That's fine. Nothing, you know, AI can't go out and do that door knock. They can't go say, hey, wait a minute, you know, this is a post box. They can't, you can't replace people with that. I I think it's probably gonna take some painful lessons because just understanding the economics of it and on the short term, it looks like, hey, look, I don't have to pay health and benefits and workers' comp insurance and retirement 401s and everything else. I can buy this and it doesn't even have to sleep. I don't have to give it coffee breaks, but they're going to come to a point where they realize they're missing things.

SPEAKER_00 1:37:59

Right.

SPEAKER_02 1:37:59

And and I suspect we're probably going to look back at some point and say, hey, we we missed some pretty big red flags here that should have raised somebody's concern.

SPEAKER_00 1:38:09

I want to say, Kate, thank you so much for talking about these topics, and we'll catch you on the next episode where our audience can hear you talk more.

SPEAKER_02 1:38:16

Yeah. Uh Tina, this this space that you have created absolutely is necessary. I think it's interesting that you were slightly ahead of the sudden awakening of there being massive fraud in multiple programs across the country. So kudos to you for being a little bit ahead of the curve on that. This is so long overdue. I would have given anything to have had this kind of a resource when I started and even as I was going on. And I have to say, I've been enjoying immensely watching. It's been like old home week with watching the different players. But you're doing something incredibly special here. And hats off to you for doing it and getting us all together and giving us the place to be able to have these conversations. I think these are incredibly important. And I think that they would be useful. And I hope that people who are coming up and doing the fight today think it's useful also. So thank you, thank you, thank you. Thank you. You know, you've always been one of my heroes. And so you have again more than exceeded expectations with with what you've pulled together here.

SPEAKER_00 1:39:24

Thank you very much, Kate. I appreciate it. Same back at you. Thank you. Absolutely. What a great guest. What great information that was just imparted. This is why I love doing this podcast. We have great people. This is this is why I created this podcast is to highlight the great subject matter experts that we have in the space. This podcast is for you, for the consumer, for the special investigator in the insurance industry, for the criminal investigator and the prosecutor in law enforcement, trying to figure out the weird language and what to do with insurance fraud crimes. It's complicated. I want to thank you so much for watching us, for supporting us. I can tell you this we need your support. If you don't mind subscribing, it's free. By subscribing, you'll see all the new videos coming on. I have a lot of subject matter experts coming on. We have really great stuff happening. This podcast is growing like crazy. I love it. And we're getting the word out there, and we're helping people, and that's what's really important. So please support us by subscribing, by hitting like on the videos, by watching the videos in their entirety. The algorithms don't like it if you don't do that. I'm learning that. Also, what's really important is that this is to build a community, right? So I want to know what you're thinking when you're watching the video. What questions that you have, what thoughts are prompted by the content? If I can't answer your question, as you can see, we have a lot of subject matter experts at hand. Stay on for the next video because I have another great guest for you. And most importantly, remember that it's cool to be kind. Money's earned from this podcast. Go to really great charities related to animals who don't have living homes right now. So we'll see you on the next video.