Guilty Pleas in $2M Scheme Defrauding LA Dockworkers’ Health Insurance

defrauding union health plan
Scheme is reported to have billed over $2 million to the ILWU-PMA health plan

Published Jan 11, 2023 6:54 PM by The Maritime Executive

The U.S. Attorney’s Office for the Central District of California is reporting additional dockworkers at the Port of Los Angeles and Long Beach have pleaded guilty in a long-running scheme defrauding the union’s health plan. Among the allegations were that dockworkers were submitting claims for “sexual services” received at local wellness clinics as well as fraudulent claims for services never rendered to themselves and their family members. The mastermind of the scheme is believed to have submitted more than $2 million in claims receiving more than $550,000 from the health plan.

A dockworker at the Port of Long Beach, Cameron Rahm, age 39, was the latest to plead guilty on January 10 in the ongoing prosecution related to the scheme. He became the fifth dockworker, so far, to plead guilty each to one count of conspiracy to commit health care fraud. After pleading guilty, each of the individuals faces a statutory maximum sentence of 10 years in federal prison.

According to his plea agreement, Rahm visited three different wellness centers that were authorized by the health plan to provide chiropractic services and acupuncture treatments. The International Longshore and Warehouse Union – Pacific Maritime Association benefit plan provided coverage for chiropractic services and generally covered all the cost with no deductible and without requiring plan members receiving the services to contribute any copay amount or incur any other out-of-pocket costs.

Rahm admitted to receiving “sexual services” during the visits to the clinics and authorized the conspiracy’s leader, Sara Victoria, to submit false claims to Rahm’s health plan run by his union. From January 2017 to April 2021, Rahm authorized Victoria to submit false claims to the union’s health benefit plan under the name of his wife, who was a plan beneficiary, totaling approximately $178,495, for which the plan paid approximately $30,243. He also requested $240 in cash per month from Victoria in exchange for his authorization for Victoria to submit additional false claims for reimbursement to the ILWU-PMA plan for services not rendered using his and his wife’s insurance information.

Victoria pleaded guilty to one count of conspiracy to commit health care fraud and one count of aggravated identity theft in December 2022. In total, the U.S. Attorney reports Victoria submitted approximately $2,110,920 in claims to the ILWU-PMA plan, for which the plan paid approximately $551,810. 

Three additional defendants, also dockworkers at the Port of Long Beach, each pleaded guilty to one misdemeanor count of theft in connection with health care. Each of these defendants faces a statutory maximum sentence of one year in federal prison.