Dr. Ronald Grusd received a 10-year prison sentence for involvement in a scam uncovered as part of an investigation dubbed Operation Backlash. Grusd's companies, California Imaging Network Medical Group and Willows Consulting, paid referring doctors in San Diego and Imperial counties kickbacks for patient referrals to fraudulently bill insurance companies for more than $22 million in medical services, according to evidence presented at his trial.
The services included MRI and ultrasound scans, shock-wave treatments, toxicology testing, and prescription pain medication. Prosecutors charged that Grusd's companies would fraudulently bill insurance payors for the services, concealing that kickbacks had been paid for referrals. Grusd allegedly paid $100,000 in kickbacks for the referrals.
Grusd was arrested in 2015 as part of Operation Backlash, a workers' compensation fraud sting that arrested a number of physicians and medical professionals throughout Southern California. Investigators charged that Grusd ran shell companies such as Willows Consulting that issued checks to front companies with names like "Line of Sight" and "Desert Blue Moon" that were operated by intermediaries. The intermediaries took cuts from the payments and then paid referring physicians.
Grusd was convicted in December 2017 after a trial during which he took the witness stand and stated that "he was confused and did not know that what he was doing was illegal." But the judge in the trial, U.S. District Judge Cynthia Bashant, said Grusd "clearly knew what he was doing." Bashant imposed an additional penalty of obstruction of justice, finding that Grusd "committed perjury and lied at trial."
Grusd was someone who would "act smart enough to pull the wool over everyone's eyes," Bashant said.
Bashant imposed a sentence of 10 years in custody and a fine of $250,000. California Imaging Network and Willows Consulting were each required to pay a $500,000 fine and an additional $15,600 in special assessments.
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