Sat, Feb 22, 2014

http://www.ocregister.com/articles/calderon-602787-state-public.html

State Sen. Ronald S. Calderon was indicted Friday on charges alleging he took more than $100,000 in bribes, some paid by a Newport Beach businessman accused of one of the largest insurance frauds in California history.

Calderon, of Montebello, agreed to surrender Monday on the 24-count indictment alleging mail fraud, wire fraud, tax fraud, bribery and money laundering. The U.S. Department of Justice also indicted his brother, Thomas M. Calderon, a former member of the state Assembly, on money laundering charges. He surrendered Friday.

Prosecutors said Ron Calderon was snared inan undercover FBI operation in which agents posing as independent film producers paid him $100,000 in cash bribes – as well as plane trips, gourmet dinners and trips to golf resorts – in exchange for supporting legislation favorable to their industry. If convicted on all counts, Ron Calderon, 56, faces a maximum sentence of 396 years in federal prison. Tom Calderon, 59, could face 160 years.

Ron Calderon's attorney, Mark Geragos, did not respond to repeated phone messages Friday seeking comment.

In a federal court filing late last year on behalf of his client, Geragos alleged that there was a campaign by the FBI and prosecutors “to smear the reputation of Sen. Calderon and convict him in the press.”

The indictment also alleges that Ron Calderon attempted to convince other public officials to support and oppose legislation on behalf of Michael Drobot of Newport Beach, a former CEO of Pacific Hospital of Long Beach.

Drobot, 69, was charged Friday with conspiracy and paying illegal kickbacks of $10,000 to $15,000 to doctors who referred spinal surgery patients to his hospital. Authorities say those kickbacks supported a $500 million fraud scheme in which the hospital charged the state workers compensation fund and other insurers up to 10 times the cost of hardware implanted in spinal surgeries.

In court papers, Drobot admits to bribing Ronald Calderon to defend the now-repealed state “pass-through” law that allowed him to bill insurers for the hardware.

Drobot agreed Friday to plead guilty to crimes that carry a maximum sentence of 10 years; three years supervised release, and at least $500,000 in fines, according to court records. He also agreed to aid the ongoing federal investigation, and to forfeit all assets he acquired with money from his crimes.

“As his plea agreement reflects, Mr. Drobot has acknowledged and accepts responsibility for his actions,” Drobot’s attorneys, Janet Levine and Jeffrey Rutherford, wrote in a statement.

At a Friday news conference, federal authorities accused the defendants of hurting the people they were supposed to serve.

“Public corruption is a betrayal of the public trust that threatens the integrity of our democratic institutions,” said United States Attorney André Birotte Jr. “Senator Calderon is accused of accepting tens of thousands of dollars in bribes and using the powers of his elected office to enrich himself and his brother Tom, rather than for the benefit of the public he was sworn to serve.”

Prosecutors say Calderon schemed with Drobot, whose small hospital became a major provider of spinal surgeries funded by worker’s compensation programs. State law at the time allowed the hospital to pass-through the full cost of spinal surgery hardware to insurance providers. Authorities say Drabot admitted to purchasing the hardware at inflated prices through companies he controlled and passing the cost to 150 insurance companies.

Calderon at the time was the chair of the Senate Insurance Committee.

Drobot paid the senator's son a total of $30,000 for approximately 45 days of work during the summers of 2010, 2011 and 2012, court documents allege. Calderon also received plane trips, golf outings and expensive dinners.

The bulk of the bribes were paid by the undercover FBI operatives posing as film producers. Calderon was then serving as chairman of the Senate Select Committee on California’s Film and Television Industries. The undercover agents asked him to support an expansion of state law that gives tax credits to studios that make independent movies. The tax credits now apply to productions of at least $1 million. The undercover agents said they wanted the threshold brought down to $750,000, according to the indictment.

Prosecutors allege Calderon “caused legislation to be introduced” and met with other senators on behalf of the undercover agents. In exchange, Calderon’s daughter was paid $3,000 a month to work at a non-existent studio, according to prosecutors.

Other payments from undercover agents included a $5,000 tuition payment for Ron Calderon's son and a $25,000 payment to Californians for Diversity, a nonprofit that Tom Calderon controlled.

In November the Senate Rules Committee voted unanimously to remove Calderon from his chairmanship of the insurance committee and to disband the select committee on film and television, which had never held a hearing. Late Friday, Senate President pro Tempore Darrell Steinberg, (D-Sacramento), called for Calderon to resign.

“Given the seriousness of charges that strike at the very heart of what it means to be a public official, Senator Calderon's continued service is a cloud over all the important work that we must get done this year.”