15-Month Sentence For Surgeon Involved In Pacific Hospital Workers’ Compensation Insurance Fraud Case

A Federal Judge has handed down a 15-month prison sentence for Dr. Jeffery David Gross for his role in the Pacific Hospital kickback scheme. In 2018, Dr. Gross was charged, along with Dr. David Payne, with conspiracy and fraud for receiving over $1 million in kickbacks for surgeries and referrals at the Long Beach hospital. In addition to the prison term, Dr. Gross will forfeit over $600,000 as part of his plea deal.

The fraud scheme coordinated by Michael D. Drobot, the former owner of Pacific Hospital, saw charges filed against a number of providers and associates for kickback payments. The scheme is said to have resulted in billings to insurance carriers totaling over half a billion dollars, though the exact losses to insurers have been difficult to determine.

More than 15 defendants were charged in cases related to the billion-dollar fraud scheme. Previous sentences for conspirators involved with Pacific Hospital and Drobot include Dr. Daniel Capen of Huntington Beach (30 months), and Dr. Timothy J. Hunt (2 years). Michael D. Drobot and his son, Michael R. Drobot, were previously sentenced to 63- and 41-month prison terms for their involvement in the kickback conspiracy. Their case also marked the first major case involving the provision of AB 1244 which requires the Division of Workers’ Compensation (DWC) to dismiss liens held by individuals convicted of fraud.