Legal News and Events

Date

Item/Information

November 29, 2011

State Representative Burt Solomons, Republican from Carrollton has told the House of Representatives that he will not seek reelection for another term.  Representative Solomons was this year’s Chairman of the House Redistricting Committee.   His Committee’s redistricting map which was for the most part adopted by the House and Senate is now in litigation.

In his correspondence to the other representatives, Representative Solomons stated in part that he decided “not to seek reelection in the 2012 Republican primary, but rather to leave office when my current ninth term expires in January 2013. “

Representative Solomons stated that he decided not to seek reelection in order to “see what new adventures, opportunities, and challenges life may have in store.”

Representative Solomons was the author of House Bill 7, which was adopted by the 79th Texas Legislature in the Regular Session in 2005, and purportedly enacted workers' compensation reform.  HB 7 renamed the Texas Workers' Compensation Commission to the Division of Workers' Compensation at the Texas Department of Insurance.  Representative Solomons was an active proponent of workers’ compensation health care networks.

In his retirement correspondence Representative Solomons thanked his “long-time Chief of Staff, Bonnie Bruce” as well as other present and passed staff for their hard work over the years.

November 15, 2011

John D. Pringle spoke at the Division of Workers’ Compensation meeting on the informally proposed designated doctor rules.  The meeting was conducted by Commissioner of Workers’ Compensation Rod Bordelon.  Present on the dais with Commissioner Bordelon were General Counsel Dirk Johnson and Medical Advisor Donald Patrick.  Assistant Medical Advisor Edwin Buster and other Division of Workers’ Compensation (DWC) staff including Patricia Gilbert and Brent Hatch also attended the meeting.

Erika Copeland, DWC Director of Designated Doctor Outreach & Oversight, gave a brief explanation of the informally proposed rules.  The purpose of the informally proposed rules can be found here.

John Pringle asked about the use of doctors who have no specialty addressing injuries and conditions outside of their expertise.  He expressed a concern that the informally proposed rules throwing open the doors to any doctor wanting to perform Designated Doctor (DD) evaluations According to DWC General Counsel Dirk Johnson subsection (d) of rule 127.130, limits the type of doctor who can perform DD evaluations.  Commissioner Bordelon stated that it is not the intent of the proposed rules to “open the doors” but it may be the effect of them.

Commissioner Bordelon clarified that the active practice requirement of 3 years out of the last 10 only applied to new applicants to the DD list and not to DDs recertifying for the DD list.

Whether an ancillary provider (e.g. technicians performing range of motion testing) under the direct supervision of a DD has to hold a license remains unclear.  Commissioner Bordelon asked for written comments on this question.

Subsequent speakers at the meeting were Laurie Gallardo, Steve Smith, Joe Wiggins, Brian White with OIEC, Wayne Hebert, J. Aubrey Davis, and Tom Dilger.

The informally proposed rules can be found at the link: http://www.tdi.texas.gov/wc/rules/documents/

drdd102011.doc

November 10, 2011

What should have the title “Lawyer Behaving Badly” the New Jersey Law Journal reported that a Cherry Hill lawyer who is charged with stealing $1 million from a client was apprehended on Wednesday, November 9, 2011, in Alabama after an apparent attempt to flee prosecution.  The following is directly from the New Jersey Law Journal.

Michael Kwasnik, 42, was arrested by local police in Dothan, Ala., on an arrest warrant stemming from Monday’s indictment, according to Peter Aseltine, spokesman to state Attorney General Paula Dow.

Kwasnik was travelling by taxi to a bus station when the driver, suspicious of Kwasnik, alerted local police, Aseltine says. Police stopped Kwasnik at the bus station and arrested him upon discovering the outstanding warrant, Aseltine says, noting that Kwasnik was carrying several thousand dollars in cash, prepaid cell phones and his passport.

“It would appear to us that he was on the lam from our charges,” Aseltine told the Law Journal.

Aseltine says Kwasnik is not fighting extradition and should be transported back to New Jersey soon, though he had no information on an upcoming bond hearing.

Kwasnik, admitted to practice in New Jersey and Pennsylvania, was charged in a four-count indictment Monday with stealing from an elderly Cherry Hill woman he represented in an estate matter. The woman, referred to in the indictment as K.L., hired Kwasnik to set up a family trust and help administer a deceased sister's estate.

Kwasnik was designated as sole trustee, receiving $1.1 million in checks from the estate, which K.L. expected him to deposit in the trust, authorities said.

Instead, he allegedly deposited those checks in his firm's trust account and later withdrew the funds and misappropriated them, largely for distribution to other clients and for firm expenses.

At the time of the alleged theft in 2006, Kwasnik was managing partner of Kwasnik, Rodio, Kanowitz and Buckley in Philadelphia, Cherry Hill and Woodbury. He is now with Kwasnik Kanowitz and Associates.

He is charged with one count each of theft by failure to make required disposition of property received, misapplication of entrusted property, theft by unlawful taking and money laundering.

The counts of failure to make required disposition, misapplication of property and theft by unlawful taking each carry a maximum 10-year prison sentence and a $150,000 fine. The money laundering charge also includes a possible $500,000 enhanced fine, plus an additional $250,000 penalty.

The case, State v. Kwasnik, 11-11-143-S, was assigned to Camden County Superior Court.

Dow also announced Monday that Kwasnik was added as a defendant in Dow v. Liberty State Financial Holdings Corp., ESX-C-59-11, filed in March by the office's Bureau of Securities.

The suit charges Kwasnik with helping Liberty State Financial of Cherry Hill sell $8.5 million in bogus securities — billed as three-year notes yielding a 12 percent annual return — to 73 elderly and retired investors.

Kwasnik and his father, company CEO William Kwasnik, allegedly transferred $5 million of that money to themselves, the law firm and others, and used the remainder to pay other investors, essentially executing a Ponzi scheme.

Kwasnik sold some of the notes to clients of his law practice and used entrusted funds in some client matters to buy additional notes, authorities said.

The company and a subsidiary, Liberty State Benefits of Pennsylvania Inc., consented to a court-appointed overseer in March, and both entities filed for Chapter 11 bankruptcy in July, according to the Bureau of Securities.

Rocco Cipparone of Haddon Heights, Kwasnik's lawyer in the criminal case, did not return a call Wednesday seeking comment on the arrest.

Cipparone said on Monday after the indictment was announced that Kwasnik denies the allegations, "successfully has been confronting similar allegations" and "looks forward to dispelling the inaccuracies and allegations made in the indictment."

Earlier it was reported that Kwasnik “settled a 2009 civil suit against him by the Federal Trade Commission. In FTC v. Hope Now Modifications, 09-cv-1204, the agency alleged Kwasnik Rodio had an arrangement with Hope Now of Cherry Hill to collect mortgage-relief clients' fees and split them with the company. The two allegedly made the arrangement to sidestep a state regulation requiring Hope Now to hold a debt adjuster's license to perform mortgage rescues, as the firm was not subject to the same requirement.

The FTC originally sought $5 million from Kwasnik and Kwasnik Rodio and later reduced its demand to $1 million, but on Nov. 1 agreed to settle for $133,656. Kwasnik and the firm did not admit liability but agreed to cease promoting mortgage-relief services.

Kwasnik also is facing a private civil suit filed in April, Labricciosa v. Kwasnik, CAM-C-144-11, where client Katherine Labricciosa claims Kwasnik borrowed $3.5 million against real property held by her deceased husband's estate — the Red Eagle Tavern in Cherry Hill, adjacent lots and a residence — without her knowledge, and made other unauthorized decisions

October 14, 2011

The Texas Department of Insurance, Division of Workers’ Compensation has announced the closing of its Victoria Field Office to be effective on November 1, 2011.  The Victoria Field Office is where injured employees who reside in Bee, Calhoun, Dewitt, Goliad, Gonzales, Jackson, Karnes, Lavaca, Refugio and Victoria counties at the time of injury go to attend Benefit Review Conferences and Contested Case Hearings.  Texas Labor Code Section 410.005 provides that Benefit Review Conferences and Contested Case Hearings may not be conducted at a site more than 75 miles from the injured employee’s residence at the time of the injury.  No mention was made in the announcement where the injured employees will now go to attend Benefit Review Conferences and Contested Case Hearings.  Texas Labor Code Section 410.005 allows for the selection of a different location if the Division of Workers’ Compensation (DWC) determines there is good cause for the selection of the different location greater than the 75 miles distance.  Perhaps the lack of a Field Office will be considered good cause. More likely the DWC will make arrangements to hold the Benefit Review Conferences and Contested Case Hearings at different locations within the 75 mile radius.

August 11, 2011

Dr. Anthony Francis Valdez, 56, is or was the owner of the Institute of Pain Management with clinics in El Paso and San Antonio.  Described as a Pain Management Physician and Psychiatrist, Dr. Valdez was charged with carrying out an estimated $41 million fraudulent health care benefit program billing scheme.

A federal grand jury in El Paso charged Valdez with 21 counts of heath care fraud; 20 counts of false statements relating to health care fraud matters; 21 counts of mail fraud; 16 counts of wire fraud; four counts of unlawful distribution of controlled substances; and, 16 counts of money laundering.

The indictment also included a notice of criminal forfeiture whereby the government sought the forfeiture of more than $1.7 million in cash, Dr. Valdez’s residence in El Paso, his residence in San Antonio and five vehicles.   The scheme is alleged to have covered a period from January 2001 through December 2009.  Dr. Valdez was charged with causing fraudulent claims to be submitted to Medicare, Medicaid, TRICARE and the Texas Workers’ Compensation Commission.  The indictment also stated that Dr. Valdez caused to be submitted claims for reimbursement of peripheral nerve injections, facet injection procedures and Level Four office visits–typically involving 25 minutes of face-to-face time between patient and physician–which allegedly were never performed. Instead of the above-mentioned procedures, the indictment further alleged that Dr. Valdez performed prolotherapy on his patients, a procedure the healthcare benefit programs do not reimburse.

The indictment also alleged that on four occasions, Valdez unlawfully dispensed controlled substances–Fentanyl in February 2006 and August 2008; Oxycontin in September 2007; and, Hydrocodone in September 2008.

The government is also sought a monetary judgment in the case for over $41.8 million.

Dr. Valdez was charged in a 16-count superseding indictment on April 20, 2011, with one count conspiracy to commit health care fraud, six counts of health care fraud, six counts of false statements related to health care matters, and three counts of money laundering.

The case went to trial in federal court.  Evidence during trial revealed that beginning in January 2005 and continuing through December 2009, Dr. Valdez caused fraudulent claims to be submitted to Medicare, Medicaid, and TRICARE for procedures which he did not perform or were non-reimbursable.

The jury convicted Dr. Valdez on all charges in connection with his estimated $41 million fraudulent health care benefit program billing scheme.

As a result of the guilty verdict, Dr. Valdez faces up to 10 years in federal prison for the conspiracy charge as well as each substantive health care fraud charge up to five years in federal prison for each of the false statement charges; and up to 20 years in federal prison for each of the money laundering charges. Sentencing is scheduled for November 18, 2011 before Senior United States District Judge David Briones.

Recently the Texas Department of Insurance, Division of Workers’ Compensation fined Dr. Valdez $100,000 and ordered him to cease and desist from participating in workers' compensation system.  The Texas Department of Insurance, Division of Workers’ Compensation contended that Dr. Valdez provided health care and received remuneration for services to injured employees after being denied admission to Approve Doctors List

June 27, 2011

Nicholas “Nick” Canaday, III, Assistant Attorney General, Administrative Law Division, has announced his departure from the Office of the Attorney General to take a position with the law firm of Downs * Stanford Firm. Mr. Canaday has ably represented the Texas Department of Insurance, Division of Workers’ Compensation under former Commuissioner of Workers’ Compensation Albert Betts and under current Commissioner Rod Bordelon. Mr. Canaday as argued the Division of Workers’ Compensation’s position before the State Office of Administrative Hearings, Travis County District Court, Austin Court of Appeals and Texas Supreme Court.

January 12, 2011

The Travis County district court has denied the Texas Department of Insurance, Division of Workers’ Compensation’s plea to the jurisdiction and Commissioner of Workers’ Compensation Rod Bordelon’s plea to the jurisdiction and motion to dismiss. The Texas Department of Insurance, Division of Workers’ Compensation (DWC) and Commissioner Bordelon contended that the district court did not have the authority to decide whether the use of Official Disability Guidelines used by DWC in determining the necessity of medical care exceeded the scope of DWC’s authority.

This ruling leaves intact the lawsuit filed by Brian Fanette in Cause No. D-1-GN-09-001187; Brian Fanette v. City of Port Arthur and Texas Department of Insurance, Division of Workers’ Compensation; in the 98th Judicial District Court of Travis County, Texas.  In the lawsuit Fanette has challenged the use of the Official Disability Guidelines (ODG) by the carrier to deny Fanette a right hip replacement surgery and an anticipated three-day hospital stay.  Fanette has also challenged the use of the Texas Workers' Compensation Act to make venue for appeals of medical necessity disputes the Travis County district courts and the refusal to allow him to try medical necessity disputes by trial de novo.

March 24, 2010

Beleal Garcia-Gonzalez, the owner of El Paraiso Night Club in Mission was arrested on January 13, 2010, on charges of sec trafficking of minor females, conspiracy and harboring unauthorized immigrants. A federal grand jury on February 9, 2010, returned a 10-count indictment against Beleal Garcia-Gonzalez. Elizabeth Mendez Vasquez was also indicted for being a part of the conspiracy to wither harbor illegal immigrants or to engage in prostitution or to engage in some other illegal activity, the news reports are unclear as to the nature of the conspiracy.

 Garcia-Gonzalez was charged after a search of his residence reportedly turned up three Honduran first, two Mexican women and two Mexican men. The three Honduran girls ranged in age from 14 to 17. It is reported the girls allegedly were forced to work 10 hours a day, six days per week for $20.00 per day in El Paraiso Night Club. In order to work off their smuggling debts. In addition, the girls were allegedly force into prostitution at the Night Club.

Texas Alcoholic Beverage Commission (TABC) agent Ricardo Blli Jr. upon learning of the aret of Garcia-Gonzalez contacted federal investigators with McAllen immigration and Customs Enforcement (ICE). The federal investigators were reportedly told that Garcia-Gonzalez had arranged to smuggle the girls from Honduras to Mission under the guise that they would be well-provided for and given jobs in a local restaurant.

A portion of the money earned from prostitution was purportedly applied to the girls smuggling debt, while Garcia-Gonzalez kept the remainder. The three girls were guarded at all times and only allowed to be in Garcia-Gonzalez residence or the Night Club. It is reported that permission to go to any other location had to be requested specifically through Garcia-Gonzalez.

The TABC cancelled the Paraiso Night Club’s Wine and Beer Permit for Human Trafficking on February 19, 2010. Kudos to TABC Agent Balli Jr. and the legal staff at the TABC for shutting down the Night Club so quickly.

The TABC reports that approximately 14,500 and 17,500 victims annually are trafficked into the United States. Many victims do not speak or understand English and end up isolated and unable to find assistance when they need it the most. The TABC asks that if you have information concerning human trafficking in you area, please contact local enforcement or the National Human Trafficking Resource Center at 1-888-373-7888.

March 17, 2010

The Texas Alcoholic Beverage Commission (TABC) has found that the two TABC agents who fatally shot a man last year at a Southwest Austin apartment complex were justified in doing so and were acting within the scope of their duties. In an internal report dated February 16, 2010. Lieutenant Albert Rodriguez determined based on the information provided by the two agents, other TABC agents, as well as found in the Austin Police Departments investigative file, and a Texas Ranger Investigative Report that the two agents were confronted with a threat of serious bodily injury or death and thus justified in using deadly force. A copy of the report can be found by clicking here.

March 15, 2010

The Supreme Court has granted the petition for review in Case No. 08-0751; Texas Mutual Insurance Company v. Timothy J. Ruttiger. The Court has scheduled oral argument in this bad faith case for April 14, 2010, at 9:00 a.m. More information can be found about the case at the following link:

http://www.pringletexaslawyer.com/Texas-Mutual-Insurance-Company-v-Ruttiger.html

February 8, 2010

The Austin Court of Appeals has scheduled oral argument in the ambulatory surgical center case No. 03-09-00187-CV; Vista Healthcare, Inc v. Texas Mutual Insurance Company, et.al.; before the Texas Third Court of Appeals for March 10, 2010, at 9:00 a.m.

Some of the issues before the Court of Appeals may be whether the 1997 Acute Care Inpatient Hospital Fee Guideline applies to ambulatory surgical center cases or whether Texas Department of Insurance, Division of Workers’ Compensation (the “Division”) default rule 134.1 (28 TAC § 134.1) is the applicable rule. Rule 134.1 provided that in the absence of a fee guideline, reimbursement was to be fair and reasonable for a medical service or treatment.

Another issue before Court is whether the language of Texas Labor Code § 413.011(d) is unconstitutionally vague.

January 12, 2010

The Texas Alcoholic Beverage Commission (TABC) has reported that on January 11, 2010, agents with the Longview District of the TABC, as well as deputies from the Smith County Sheriff’s Department, executed a search warrant at a residence in southeast Smith County. The law enforcement officers seized a 55 gallon still, copper tubing associated with the still. Burners, two propane bottles and approximately nine gallons of products commonly referred to as moonshine whisky.

The TABC reports the suspect Sedrick Lucille Johnson, Jr. (DOB 5/21/51), faces charges of possession of illicit alcoholic beverages and possession of equipment to manufacture illicit alcoholic beverages. Both crimes are misdemeanors punishable by $100-$1,000 and/or up to a year in jail.