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More on That Calderon Corruption Case—involving FBI Stings, Many Millions in Double Billing, and Fake Film Companies

February 24th, 2014 by Celeste Fremon

California State Senator California Senator Ronald Calderon
was taken into custody Monday morning after surrendering to federal authorities to be arraigned Monday afternoon on 24 counts that include corruption, mail fraud, wire fraud, bribery, conspiracy, money laundering….and more.

Thomas Calderon, the former speaker of the California state assembly, and Ron Calderon’s brother, surrendered this past Friday when federal charges against both men were announced by U.S. Attorney Andre Birotte.

As you may know by now, Ron Calderon is accused of being involved in two elaborate schemes in which he allegedly solicited and accepted around $100,000 in cash bribes along with trips to Las Vegas, expensive dinners, and gratis stays at golf resorts, plus a couple of high-paying jobs for his son and his daughter (requiring little or no work). In return Calderon allegedly exerted influence on state legislation that was favorable to those doing the bribing.

In one of the bribery set-ups that resulted in the charges against Calderon and his brother, the state senator allegedly took money and favors from a guy named Michael Drobot, the former owner of Pacific Hospital in Long Beach, which is a major provider of two kinds of expensive and delicate spinal surgeries that are often billed to workers’ compensation programs. (Drabot has accepted a plea agreement and is cooperating with the feds.)

The California law that Calderon reportedly worked to keep on the books (it has since been repealed), allowed a hospital to essentially bill twice for an expensive piece of hardware used in the surgeries. (First the hospital got to bill workers comp for the full cost of the surgery—which amounted to a 20 percent more than the facility would have gotten if it was being paid under Medicare. Then it got to bill all over again for the hardware—the average price of which, was already paid for in the original billing).

In the companion case filed on Friday, Drobot admitted that his hospital exploited this law, which was known as the “spinal pass-through,” law, by billing insurance providers at highly inflated prices for the device in question that had been bought from shell companies that Drobot controlled.

“Drobot allegedly bribed Ron Calderon so that he would use his public office to preserve this law that helped Drobot maintain a long-running and lucrative health care fraud scheme,” said the US Attorney’s office in one of its official statement.

In addition, Drobot had reportedly been paying kickbacks to doctors and chiropractors who, in return, recommended to what would amount to thousands of patients that they have their pricey surgery at Drobot’s Long Beach hospital, even if they lived a hundred or more miles away from Long Beach, and there was perfectly appropriate facility far closer to their homes.

“The co-conspirators lined their pockets by ripping off insurance companies to the tune of hundreds of millions of dollars,” said California Insurance Commissioner Dave Jones.


The charges against the Calderons were, to a great extent, previewed last October when reporters from Al Jazeera America managed to get their hands on a sealed 125-page federal affidavit that was used to get a judge to sign off on the FBIs raid of Calderon’s office some months earlier.

The affidavit (which was redacted by Al Jazeera to block out the identities of the undercover FBI agents involved in a sting against Calderon) is replete with lots of alleged dialogue between Calderon and the three FBI undercovers, who were posing as the head of a new (and fake) LA film company, the film company’s money man, and the film guy’s good-looking girlfriend, who was in need of a job. Calderon allegedly provided said girlfriend employment on the state’s dime—until such time as the fake film guy “was no longer with” his fake girlfriend. (Nope. Not making this last part up.) Oh, yes, and Calderon allegedly solicited and accepted bribes from the undercover FBI agents in return for pushing legislation that would be favorable to their “film company.”

US Attorney Birotte looked grim as he talked to reporters on Friday about the case against the high-living Calderon brothers. “Holding elected office means accepting the public trust…” said Birotte. “And the vast majority of officeholders do so with dignity, honor and the well-being of their constituents. When you selfishly line your pockets, it’s up to us to take steps to hold these individuals accountable.”


Posted in Community Health, consumer affairs, crime and punishment, FBI | No Comments »

FBI Wants to Wiretap the Internet (It’s Worse Than You Think)

September 28th, 2010 by Celeste Fremon

As you may or may not have heard,
the FBI is now very worried that bad guys are texting and Skype-ing and Facebook-messaging each other (Duh!), and that law enforcement can’t wiretap these forms of communication the way they can cell phones, land lines, email and the like.

Okay, one can understand the concern.

As a consequence the feds want to change a one or two things.

Many critics are flagging this as a privacy issue. But it’s much worse than that.

What the FBI and other law enforcement agencies involved are really looking for is the ability to control the design of the technology itself.

Charlie Savage of the NY Times has a very good grip on the basics of what is being proposed. So begin by reading his story.

Here’s how it opens:

Federal law enforcement and national security officials are preparing to seek sweeping new regulations for the Internet, arguing that their ability to wiretap criminal and terrorism suspects is “going dark” as people increasingly communicate online instead of by telephone.

Essentially, officials want Congress to require all services that enable communications — including encrypted e-mail transmitters like BlackBerry, social networking Web sites like Facebook and software that allows direct “peer to peer” messaging like Skype — to be technically capable of complying if served with a wiretap order. The mandate would include being able to intercept and unscramble encrypted messages.


James X. Dempsey, vice president of the Center for Democracy and Technology, an Internet policy group, said the proposal had “huge implications” and challenged “fundamental elements of the Internet revolution” — including its decentralized design.

“They are really asking for the authority to redesign services that take advantage of the unique, and now pervasive, architecture of the Internet,” he said. “They basically want to turn back the clock and make Internet services function the way that the telephone system used to function.”

Dempsey is not exaggerating.

The Feds are asking to change and approve the next generation architecture of such technologies as Skype, Facebook. and others, in such a way that limits peer-to-peer communication.

Not good.

The discussion Monday on Patt Morrison’s show was particularly good—and alarming— on the topic. So listen.

(Susan Landau, formerly of Sun Microsystems, now at Harvard, and Sascha Meinrath, director of the Open Technology Initiative, are both especially good on the show.)

This is only the beginning of the conversation. It is an issue that is very much worth your attention.

Posted in Civil Liberties, Civil Rights, consumer affairs, FBI, Freedom of Information | 10 Comments »

A Million Women v. Walmart…& 9000 Women v. Pfizer

August 31st, 2010 by Celeste Fremon


It’s an really, REALLY unfun month for big corporations trying to dodge lawsuits from gaggles of angry women.

First Walmart. Monday’s New York Times editorial explains the matter well.

For nine years, Wal-Mart has fought to stave off a class-action lawsuit alleging that the company has long discriminated against its female workers in pay and promotions. So far it has avoided a trial on the merits of the issue. The battleground instead is whether the million or so women who have worked for Wal-Mart since 2001 really constitute a class, which the company vigorously disputes. In 2004, a federal district court judge said they did, and in April the Ninth Circuit Court of Appeals agreed, ruling the case could proceed.

Now Wal-Mart has taken the class issue to the Supreme Court. It is probably a smart legal move, given the court’s clear tendency to rule in favor of corporations, particularly when big classes or discrimination claims are involved. We hope the court resists the temptation to toss out the case, which would force women to file lawsuits one by one. Wal-Mart’s employment practices deserve a full hearing.


It seems the whole thing started when nine women working for WalMart realized that they were being paid less than men who did the same work, plus the guys were being promoted more often.

A district judge who found in favor of the women noted that, according to statistics, women working in Walmarts in every region of the country were being similarly underpaid when compared to their male counterparts.

What the Supremes will have to decide is whether that means every one of the one million woman working at Walmart have been discriminated against. In other words, do the female workers at Walmart constitute a class? Or should their suits be—as a very jittery Walmart hopes—simply taken on a case by case basis.

One million women in a class action suit would make the Walmart action the largest employment discrimination lawsuit in American history—a stellar designation that Walmart would prefer to avoid.


PremPro is the hormone replacement drug that, at one time, was the most popular on the market. It is made up of Premarin, a form of estrogen that is made from the urine of pregnant mares (gross, but there you have it), and Provera, a form of artificial progesterone.

Wyeth made Premarin, Upjohn, Provera. Wyeth eventually packaged the two together as PremPro. And, for years, doctors prescribed by the bucketful.

Around 20 years ago, however, some of the nation’s more research-savvy OB/GYNs stopped prescribing PremPro when other hormone replacements drugs were developed that more closely mimicked the body’s own original hormones, and thus were deemed safer (and had fewer side-effects).

Still the preponderance of American doctors continued to go with the familiar PremPro. To date, it is estimated around 6 million women worldwide have taken the drug.

Then in 2002, the Women’s Health Initiative made headlines when they stopped a massive study (sponsored by the National Institute of Health), after they found that women in the study who took PremPro were more likely to get breast cancer than those who did not.

PremPro-taking women with breast cancer wondered if Wyeth had suspected the risks and ignored them. Lawsuits resulted. Then more lawsuits.

Pfizer bought Wyeth around a year ago (and Upjohn in 2003)– along with it, as many as 9000 lawsuits filed by women with breast cancer who claimed that PremPro was, at least in part, to blame for their illness—and that Pfizer/Wyeth hid what they knew of its dangers..

At first, Wyeth/Pfizer was able to get a bunch of suits dismissed, but now the stronger suits are arriving in court, and the tide appears to have turned.

Out of the 12 cases that have thus far gotten in front of a jury, the score is Pfizer 5, women 7. (Here’s the result of one such case from last year., in which the jury concluded that the drug company purposely hid the risk of cancer.)

At the end of last week, Pfizer settled another case before trial.

Monday, a Pennsylvania Superior Court gave plaintiffs another win when she ruled that the two-year statue of limitations for women who allege their breast cancer was caused by PremPro started, not from the day they were diagnosed with cancer, but from the day the Women’s Health Initiative study was released.

Stay tuned. This issue is far from over.

Posted in consumer affairs, Courts, health care, Supreme Court, War on Drugs | No Comments »

Toyota, Criminal Probes….and My Own Recall Adventure

February 23rd, 2010 by Celeste Fremon


On Monday, a federal grand jury opened an investigation to look into
whether Toyota tried to cover up the acceleration problems that led to its massive vehicle recall. Even prior to the criminal probe, Toyota was already facing congressional hearings later this week.

All this recall business got me to thinking about another big, bad automobile recall-
one in which I had a personal stake.

It began in 2000 and continued into 2001. At the time, we had just elected a new president (or the Supreme Court had chosen the president, depending upon your outlook). No airplanes had yet crashed into the Twin Towers.

Back then, the multinational corporations being accused of cover-ups and worse were Firestone, the tire makers, and the Ford Motor Company.

It seemed that the Firestone Wilderness tires that were commonly put on certain Ford light trucks-–most often the Explorer—began coming apart at the treads. Basically, the tires exploded. When the tires blew apart they, in turn, caused the SUVs riding on them to swerve, leap and to rollover. In so doing, they frequently killed and/or maimed their occupants.

After an impressive string of rollover-related deaths triggered an even more impressive string of lawsuits, a massive recall was instituted.

Back then, I had an Explorer. And, I had Firestone Wilderness tires on my Explorer.

Yet, when I began the recall-related adventure you’ll find below, neither Firestone nor Ford thought it necessary to replace myFirestone Wilderness AT tires.

I wrote about what occurred next, first for MSNBC and then for the LA Weekly.

Here is the result:

As this Alice-in-Wonderland inauguration approaches,
during which a president who may or may not have actually been elected will be gloriously and officially sworn into office, it would be nice to be able to trust somebody — like maybe your tire company. For four months straight I tried my best to do just that, even though everywhere we went, people pointed at our tires. One of the last times it happened we were all loaded into my 1997 Ford Explorer, ready to head out for a Sunday excursion. We, in this case, meant me, my 14-year-old son, Will, two of his best friends, plus a tangle of skateboards, pads and helmets. Our destination was the boys‘ favorite indoor skate park, 45 miles north of our house. Just before getting on the 101 freeway, I pulled into a gas station for a quick fill-up, and two 19-year-olds in a Camry cruised by and glanced in our direction.

“Hey, look!” barked the Camry driver at a volume intended to be within our earshot, his left arm gesturing out the window toward our vehicle. “They’ve got those exploding tires!”

Yes, indeed, we surely did. We had Wilderness ATs, the tires recalled by Firestone last summer on account of their habit of parting from their treads at sudden and inopportune moments. It seems that when these ATs separate at freeway speed, they often cause the Explorer wearing them to roll. At present count, tire failures by ATs and two other Firestone tire models, the ATX and the ATX II, have led to 148 deaths and more than 681 injuries in the U.S. alone, according to the National Highway Traffic Safety Administration (NHTSA). This tally of crashes ranks among the highest number of fatalities and injuries the agency has ever recorded in its 30-year history of defect investigations.

2000 was a record-smashing year for auto-related defects in general. In addition to last summer‘s BridgestoneFirestone recall of 6.5 million tires, the largest automotive recall in U.S. history, there have been an unprecedented number of recalls on everything from infant car seats to school buses. In early November, the Ford Motor Co. announced that it was recalling 430,000 Ford Mustangs because of a faulty parking brake. A few weeks later, Ford issued a recall of 846,000 Explorers. Last fall, Continental-General tires were linked to a string of fatal tread-separation accidents, and, on November 21, federal regulators announced they were looking into a possible Goodyear exploding-tire problem. Yet it’s the Wilderness AT tire that continues to cause an ongoing controversy. Eight weeks ago, Firestone announced it had exchanged 80 percent of its hazardous tires. Well, maybe yes, maybe no. As with the Florida election recounts, the truth is in the eye of each beholder, and the facts of the situation vary wildly depending upon whom you ask.

I bought my Wilderness ATs new from my local Ford dealership this past July 24, exactly 16 days before the recall was announced on August 9. When the news broke, I quickly called the dealer to ask how I might get my tires replaced. The service manager himself got on the phone with me, his tone concerned and accommodating. “Just bring your Explorer on in,” he said. “We‘ll get you fixed up as fast as we can.” When I arrived at the Ford lot, an earnest, 20-something mechanic, whom I’ll call Matt, told me that he would first have to check to make sure that my tires were part of the recall.

“What do you mean?” I wanted to know. “Of course they‘re part of the recall.”

Matt patiently explained that the only ATs eligible for replacement were those made at the Firestone plant in Decatur, Illinois. Those were the ones causing all the trouble, he said. With that, he rolled under my Explorer and began looking for what is known as the DOT code, a set of distinguishing letters and numbers printed on every tire’s inside wall indicating where it was manufactured. The Decatur tires have a DOT code beginning with the letters VD. After a minute or two of poking about, Matt rolled out once again. “Great news,” he announced. “Your tires are all 8Xs. Not a VD in the bunch. That means they‘re perfectly safe.”

I stared at the tires, then back at Matt. “Says who? Firestone?”

That would be the same Firestone who pronounced the Decatur ATs safe until the fatalities and the lawsuits started piling up. I said as much to Matt, who appeared to wish he were elsewhere. When I spoke to the service manager, he didn’t seem any happier. “All we know is what Ford and Firestone tell us,” he said. “I just hope they‘re correct and I’m not lying to my customers.”

At home, my son accosted me the minute I walked in the door. “Did you get new tires?”

“Um, no,” I told him. “See, we don‘t have the bad Wilderness ATs. We have the good Wilderness ATs that are not part of the recall because, um, they’re perfectly safe.”

“Yeah, right,” Will said. “Do you believe that?” I admitted I didn‘t know.

Read the rest. You’ll be glad you did, I promise. (And, yes, Virginia, the little guy—or in this case, the 5′ 4″ journalist/mom—can sometimes make a difference.)

Posted in consumer affairs, Life in general | 4 Comments »