Carriers Denied Restitution in Pacific Hospital Case

Although the Pacific Hospital of Long Beach kickback scheme has been called the largest insurance fraud case in California's history, costing workers' compensation carriers nearly $1 billion, a federal judge determined that no one is entitled to restitution. U.S. District Court Judge Josephine Staton on Tuesday declined to order seven defendants, including former Pacific Hospital of Long Beach owner Michael D. Drobot, to pay restitution to State Compensation Insurance Fund, AIG or Travelers. The judge said she arrived at her decision because carriers failed to follow her advice t...