Federal prosecutors Friday announced federal corruption charges against members of the politically powerful Calderon family, including alleged money laundering and accepting bribes from a Newport Beach businessman as part of a "massive" Medicare fraud scheme.
State Sen. Ron Calderon, D-Montebello, and his brother, Tom Calderon, are accused of laundering thousands of dollars in bribes from former hospital owner Michael Drobot to keep alive a law that enabled the scheme.
Drobot’s Pacific Hospital of Long Beach specialized in spinal fusion surgeries and benefited from a loophole in state law that allowed him to overcharge insurance companies, said André Birotte Jr., the U.S. attorney for the Central District of California, at a news conference.
“Drobot bribed Ron Calerdon so that he would use his public office to preserve this law” that provided “rich profits” to his company, Birotte said.
Calderson is also accused of taking about $100,000 in bribes from undercover agents posing as film studio executives, in exchange for pushing for beneficial state tax credit changes.
A federal grand jury approved a 24-count indictment against Ron Calderon for mail fraud, wire fraud, honest services fraud, bribery, conspiracy to commit money laundering, money laundering and tax fraud, according to Birotte.
If convicted on all counts, the lawmaker could face up to 400 years in federal prison, Birotte said.
Tom Calderon, meanwhile, faces charges of conspiracy to commit money laundering and money laundering, which could lead up to a 150-year sentence.
“When public officials choose to callously betray the trust of the people they serve … then it’s up to us to take the steps responsible to ensure that we hold these individuals responsible,” said Birotte, who is the top federal prosecutor for seven counties, including Los Angeles and Orange.
Drobot is accused of purchasing medical devices at an inflated cost, then submitting invoices to the State Compensation Insurance Fund, among other insurance providers, for up to 10 times the actual cost of the devices.
In all, Drobot’s company submitted more than $500 million in insurance bills, authorities claim.
“So long as corruption continues to threaten the integrity of the political process,” Birotte said, federal authorities will continue to bring these types of cases.
The U.S. attorney’s office is also involved in an FBI-led public corruption task force in Orange County.
The Calderon brothers have denied breaking any laws.
Ronald Calderon reportedly agreed to wear a “wire” as part of the FBI investigation, after he was confronted by federal agents in Las Vegas in May 2012, according to a court document cited by the Los Angeles Times.
Calderon claims federal officials leaked an FBI affidavit against him to Al Jazeera America after he refused to cooperate in an investigation targeting other state legislators.
Federal authorities, meanwhile, have called that accusation baseless.