Forgotten in massive medical fraud prosecution, suffering patients lash out in avalanche of lawsuits

First of two parts

There’s just a whisper of bone, ghostly and gray, in the X-ray image of Joshua Lash’s spine.

The vertebrae spiral down, diffuse as smoke, until they reach a brutal and jagged conclusion: six stark-white images of screws embedded deep into bone, lashed together by metal rods. Dimly visible near the spinal cord are metal cages, meant to encourage bone to grow and fuse, thus restoring stability and reducing pain.

That’s not how things have worked out for Lash, a former Los Angeles County sheriff’s deputy, or for dozens of others who say they’re collateral damage in Operation Spinal Cap, the $1 billion medical-fraud investigation that has led to federal charges against more than a dozen Southern California doctors, chiropractors, hospital administrators and others — but to no relief for them.

In an avalanche of lawsuits, more than 160 patients contend that cheap, nonsurgical-grade hardware may have been drilled into their bones during operations that might not have been necessary to begin with, leaving them in excruciating pain.

“I never wanted to have surgery. I didn’t want to do this,” said Lash, whose scar runs down the small of his back. “It was the doctor’s persistence. He said, ‘If you don’t do it, you will not be able to go back to work.’ He wouldn’t let me go back to work.”

The operation is risky and invasive. The Mayo Clinic warns that spinal fusion can be no more effective than nonsurgical treatments for some types of back pain. But Lash’s diagnosis grew more and more grim over the course of a year. The doctor touted the surgery with the conviction of a car salesman, he said.

“He wore me down,” Lash said of Simon Lavi, the surgeon he is suing. “I wanted to go back to work.

“But it backfired. I lost my career at age 41,” he said. “This surgery was the worst decision I ever made in my life. And why? Money. This is all about money. All about greed.”

Operation Spinal Cap

Operation Spinal Cap is a mammoth federal health-care fraud investigation that began in 2013 and is so enormous that it continues today.

It targets a scheme that stretched over 15 years and generated nearly $1 billion in fraudulent claims to  federal and state governments as well as to private insurers. The U.S. Department of Justice says it involved some $40 million in illegal kickbacks to doctors, chiropractors, marketers and other medical professionals.

One of its masterminds was Michael Drobot, former owner of Pacific Hospital in Long Beach, where Lash had his surgery. Drobot, 74, of Corona del Mar, pleaded guilty to conspiracy and paying illegal kickbacks in 2014, admitting he orchestrated a wide-ranging fraud in which “thousands of patients received surgeries at Pacific Hospital not knowing that (Drobot) bribed their physician to perform their surgery at Pacific Hospital,” prosecutors wrote in a sentencing memo filed with the court.

Drobot, the memo said, “was motivated by greed and ultimately profited millions of dollars through the scheme.”

From at least 1997 through 2013, the scheme billed workers’ compensation insurers hundreds of millions of dollars for spinal surgeries on patients who had been referred by doctors and others who typically got illegal kickbacks of $15,000 per patient.

“The patients believed that they were receiving conflict-free medical advice when, in fact, (Drobot) illegally incentivized their physician to perform the surgery at Pacific Hospital,” prosecutors said in court documents.

Those kickbacks were largely financed by money generated from a separate Drobot company, which sold the medical devices implanted into patients during spinal surgeries, prosecutors said.

To protect that stream of cash, Drobot bribed then-state Sen. Ronald Calderon to protect a now-repealed state law allowing hospitals to pass the full cost of spinal surgery implants on to workers’ comp insurers.

Drobot pleaded guilty to orchestrating the massive fraud in 2014, but cooperated with prosecutors as they sought evidence against co-conspirators. He was sentenced to five years and three months in federal prison. Calderon pleaded guilty to corruption and was sentenced to 3 1/2 years in federal prison in 2016.

Thus far, 17 Southern California doctors, chiropractors, marketers and others have been charged or pleaded guilty in connection with Operation Spinal Cap. The accused hail from Manhattan Beach, Newport Beach, Redondo Beach, Palos Verdes Estates, Santa Ana, San Clemente and many other cities. Lash’s doctor was not among those charged with wrongdoing.

Six of the accused — including Drobot Sr. and his son — have been sentenced. Four await sentencing, while seven others — including five doctors — face trials this fall, said Thom Mrozek, a spokesman for the U.S. Attorney’s Office in Los Angeles.

Hardware not part of prosecution

Glaringly omitted from the charges, as far as patients are concerned, is any mention of the cheap, nonsurgical-grade hardware they fear may be embedded in their bones.

In the flood of civil lawsuits against doctors and hospitals in Los Angeles, Riverside and San Bernardino counties, patients say copycat spinal screws and hardware — manufactured in an unsanitary machine shop in Temecula, mixed with genuine product and then shipped for surgeries all over the country — may be inside them.

Inferior parts can break, degrade and cause the surgery to fail, patients contend. And getting everything out is extremely dangerous, and, in some cases, impossible.

“As a result of the intrusive nature of the operation, the surgical hardware cannot be removed without reversing the fusion and without significant risk of death or injury to the patient,” says a lawsuit filed by Derika Moses of Riverside.

Lavi and other doctors and hospitals targeted by patient lawsuits — who have not been charged in the federal criminal probe — deny any wrongdoing, including knowingly using inferior product in surgeries.

In court filings, Drobot said his companies never bought or used any knock-off screws or parts for spinal surgeries, and that the absence of such charges in the federal investigation proves his contention.

“Pacific Hospital didn’t use counterfeit implants. Period,” said attorney Terree A. Bowers. “Frankly, the attorneys who filed these suits are doing a huge disservice to these patients.”

One of those attorneys strongly disagrees.

“The government prosecutors went after the low-hanging fruit,” said Justin Berger, who represents whistleblowers in the case. “It’s easier to prosecute doctors for kickbacks than to prove counterfeit hardware is inside of people.”

Tangled web

Once, Derika Moses was a force to be reckoned with on the softball field. She held records in track and field at her Riverside high school. She was setting up a display in a grocery store in 2007, lifting a case of soda bottles, when her back popped, and her universe changed.

The pain was fierce. Nothing helped. Her best bet, she was told, was spinal fusion surgery. Eager for relief, Moses had the surgery at Riverside Community Hospital in 2008. But the agony didn’t subside and she suffered painful complications as well, according to her lawsuit.

In 2013, she could stand it no longer, and, despite the dangers inherent in removing the hardware, Moses opted for the operation.

Not everything could be removed, but much was. Moses carried home a rattling collection of screws and rods that were once embedded in her bone — somewhat macabre souvenirs — and didn’t think much more about it until news of Operation Spinal Cap broke the following year.

That’s how it came to be that, in February, Sung Chul Hwang carefully placed screws that were once in Moses’ spine on a clean white cloth in a Los Angeles law office. Some had the U&I Corp. logo laser-engraved on them. As a court reporter typed, a video camera rolled and a throng of attorneys scribbled notes, he peered through a magnifying glass, turning the screws this way and that.

Hwang has a master’s degree in precision mechanical engineering and has worked at U&I in Seoul, South Korea, since 2002. The company is the exclusive manufacturer of its surgical-grade, U.S. Food and Drug Administration-registered spinal hardware used in many surgeries here in America.

Hwang, now research and development director for U&I, flew from South Korea to Los Angeles to give two long, contentious days of deposition in the lead civil case.

“All right,” said Robert Hutchinson, attorney for the plaintiffs. “Beginning with the item in Bag 24, number 1, is that a genuine U&I product?”

Hwang inspected. “Yes,” he said.

“In bag number 2,” the lawyer continued, “is that a genuine U&I product?”

“No,” Hwang said.

Bag No. 3?

No, that was not a genuine U&I product, either. Nor was the hardware in Bag No. 4. Or in many of the other bags that Hwang inspected over two days of testimony.

“My question to you, Mr. Hwang,” Hutchinson said, “is what characteristics of the hardware did you look at in order to make your determination?”

“There were some products that I saw which was kind of sharp, very sharp, in terms of the thread of screws, and it was not possible to manufacture that kind of sharpness through our procedure,” he explained.

Also, some of the screws were a bright, metallic color. A genuine U&I product is sandblasted after manufacturing to remove metal burrs and debris, rendering the once-bright metal a darker gray, he said.

Then there’s the U&I logo itself. Actual U&I hardware bears the letters in a forward-leaning italic font. But many of these sharp, bright screws had letters straight up, at attention, he said.

There were also wayward machining marks on some suspect hardware, which would not have passed U&I quality control, Hwang testified at the deposition. Additionally, various pieces had oddities and inconsistencies in the tracking numbers.

U&I is not alone in concluding that its product had been copied.

Ortho Sol, in South Africa, is another FDA-registered manufacturer of hardware for spinal surgeries. After its American distributor failed to pay for the product, Ortho Sol repossessed some of the unsold hardware.

“Found amongst the returned inventory,” said Ortho Sol CEO Richard Walker in an email included in court documents, were “counterfeits of our product.”

Distributor’s role questioned

The American distributor common to both U&I and Ortho Sol was Roger Williams, a man who ran a now-defunct company called Spinal Solutions.

“I do believe besides the ‘fraud’ aspect, ‘criminal charges’ of theft and the endangering of patients’ lives should be laid against Roger as well as the participating surgeons involved,” Ortho Sol’s CEO wrote.

“In a nutshell, what he is doing is firstly introducing the genuine registered article (our product) for a period on which he defaults on payment, and when this source dries up he substitutes the product with counterfeits and cheap inferior Asian products under the genuine product FDA registration,” Walker continued. “This is not only fraud, but a criminal offense, to say the least.”

Williams and Spinal Solutions have been named in scores of lawsuits, but attorneys have been unable to serve him the court paperwork. Williams filed for bankruptcy in 2013.

Spinal Solutions had supplied surgical hardware to doctors in Wisconsin, Texas, Nevada and Maryland, as well as California, according to court records. A spreadsheet of internal data shows that the company’s hardware went to Riverside Community Hospital, St. Bernardine Medical Center in San Bernardino and Tri City Regional Medical Center in Los Angeles County, as well as Drobot’s Pacific Hospital of Long Beach.

In a statement, Dignity Health said that it has not seen evidence that any of the plaintiffs’ assertions apply to its St. Bernardine Medical Center.

Attempts to reach Williams were unsuccessful. He has never personally been served with lawsuits, has never appeared in any of the cases and doesn’t have an attorney, said Berger, attorney for the whistleblowers.

Monday: Whistleblowers lament lack of concern for patients.