Doctors in Southern California have implanted counterfeit screws and rods, ginned up in a small machine shop, into the backs of thousands of injured workers, according to lawsuits filed throughout the state.
Some doctors who used the bogus hardware took kickbacks including cash and private plane rides, while middlemen and hospitals profited by wildly inflating the cost of the screws, according to one suit filed in Sacramento.
The allegations deepen the scandal surrounding a Corona del Mar hospital executive who pleaded guilty in April to paying doctors to bring in patients as part of a $500 million insurance scam.
The executive, Michael Drobot, also admitted to bribing former state Sen. Ronald Calderon to keep huge insurance payments flowing.
The latest lawsuit, filed in mid-June in Los Angeles, says the knockoff spinal implants could harm patients because they could get an infection or react to metal that is not surgical grade. The screws also might loosen or fail. Some of the bogus screws cost $300 to make but were billed at as much as $12,500 each, records say.
“It’s probably the worst example where fraud has progressed from being a financial crime to hurting people for profit,” said Thomas Fraysse, an Oakland attorney on the case. “It’s beyond unethical.”
Law firms in the Bay Area and Los Angeles plan to continue to file cases on behalf of people with counterfeit implants studding their backs.
A contractor for Spinal Solutions, the firm accused of distributing the implants, and an attorney for the machine shop’s owner deny the allegations, saying it is impossible that the elderly machinist mass-produced the hardware.
The cases revolve around spinal fusion surgeries, in which rods and screws are implanted in the back to relieve pain. The state’s workers’ compensation system long paid a premium for hardware used in the surgeries until a loophole was closed by recent legislation.
The latest lawsuit accuses defendants of fraud and battery, saying the hardware has put the life of the patient, Arthur Golia of Riverside, at risk. Golia had seven counterfeit devices implanted in his spine, according to the suit.
It follows a similar January case, which alleges that a Los Angeles man had medical implants from the mom-and-pop machine shop in Temecula put in his back in 2011. One of the screws broke, requiring David Solomon to undergo a second surgery in 2013. He has ongoing pain and loss of movement, the lawsuit says.
“If you break this down to the core of right and wrong, it really is using people as pieces of meat to make money,” said Santa Ana attorney Chris Purcell, who filed the Solomon case in Los Angeles Superior Court. “It’s horrifying to me that this could still happen in this day and age.”
A separate whistleblower lawsuit alleges that many of the patients with fake implants may not have needed the surgery at all. According to that May 2012 suit, they were the collateral damage of a massive scheme to defraud insurers, involving Drobot, former owner of Pacific Hospital of Long Beach.
Drobot admitted to paying doctors kickbacks of up to $15,000 to operate in his hospital. He also admitted to paying bribes to Calderon to protect a law allowing hospitals to bill insurance providers for the full cost of spinal implants. Calderon, a Montebello Democrat, has pleaded not guilty to corruption charges. Drobot’s sentencing is scheduled for December, according to news reports.
Attorneys for Golia, the plaintiff in the latest lawsuit, did not name Drobot as a defendant in their case but said their findings demonstrate the breadth of the graft surrounding the lucrative spine surgeries.
Golia trusted his doctor to use medical implants approved by the Food and Drug Administration, his lawsuit states. Instead, the case alleges, Dr. Jack Akmakjian used counterfeit implants in Golia’s back because he was being paid a kickback to do so. Separately, the Medical Board of California accused Akmakjian in April of injecting unsafe amounts of steroids in patients and overprescribing drugs.
A woman who identified herself as Akmakjian’s office manager said there would be no comment. Parkview Community Hospital, where Golia was treated, did not respond to questions by press time.
Spinal Solutions LLC, a now-shuttered Murrieta company, is accused of distributing and inflating the cost of the hardware in the Golia lawsuit and the whistleblower claim.
The firm’s owner, Roger K. Williams, is accused of passing off the counterfeit rods and screws as FDA-approved even though they were made at the local tool shop. The case says Williams, his wife at the time and a key staffer hid or destroyed records that revealed the true origin of the hardware.
Williams filed for bankruptcy last year, claiming $12.6 million in liabilities, including a plane, yacht and $50,000 Mercedes-Benz. The petition was rejected, court records say, in part because Williams failed to disclose his ownership of a second airplane and a second Harley-Davidson motorcycle.
Efforts to reach Williams were unsuccessful. Arnold Neves Jr., a former attorney for Spinal Solutions, said of the allegations, “I don’t know anything about that.”
According to the lawsuits, Spinal Solutions asked William Crowder, owner of Crowder Machine & Tool of Temecula, to make the rods and screws.
Thomas Mansor, an independent contractor who worked for Spinal Solutions and attended surgeries with their products, said the allegations sound “bogus.” Mansor said he went to Crowder’s machine shop for repairs on tools like screwdrivers. But he said Crowder didn’t have the equipment or capacity to churn out the spinal implants.
“The guy can barely even walk. … They don’t have computerized machines,” he said. “To me, it doesn’t sound right.”
The machine shop is now closed and the owner, who used to make parts for sailboats, is in poor health, said Crowder’s lawyer, Alan Mohill. Crowder made only “prototypes” for Spinal Solutions and didn’t know how they would be used, Mohill said.
“The allegations are false,” he said. “He’s just a small little machine shop.”
Crowder sued Spinal Solutions last July, saying the firm owed him $29,900 “to machine, repair and prototype” tools for doctors. Crowder attached a one-year, $50,000 contract with the implant firm to his suit. Crowder won a judgment against Spinal Solutions because it did not respond to the suit.
Trent Northcutt, chief executive of Aurora Spine in Carlsbad, said devices like rods and screws are relatively simple to make. But for them to be designated as surgical grade requires FDA approval, biomechanical tests and liability insurance that add to the costs. Northcutt said he briefly dealt with Spinal Solutions but found its products inadequate.
Northcutt recalls seeing one Spinal Solutions representative pull up to a doctor’s office in a gleaming white Rolls-Royce and hearing that the company ferried its goods by private plane.
“Everyone knew something funny was going on,” Northcutt said.
The FDA cited Spinal Solutions in 2012 for a variety of quality control violations. Last year, the agency announced that the company was recalling spinal implants because problems with the products “could cause patient harm due to implant breakage, movement, or inadequate sterilization.”
An FDA spokeswoman said she could not comment on ongoing litigation or confirm the agency is investigating.
This story was edited by Amy Pyle and copy edited by Nikki Frick and Christine Lee.