Vocational school owner and counselors arraigned in nearly $1 million insurance fraud case

News: 2024 Press Release

LOS ANGELES — Los Angeles area vocational school owner, Guillermo (William) Frias, 65, of Paramount, and accounting manager for the same school, Yesid Colon, 54, of Baldwin Park, were arraigned yesterday after a California Department of Insurance investigation revealed they allegedly submitted fraudulent claims to receive money from insurance companies for services their vocational school did not provide. They also allegedly received illegal kickback payments from vocational counselors that paid for referrals of students, which is a labor code violation. Four vocational counselors have also been arraigned for their involvement in the illegal referrals and kickback scheme.

The investigation began after the department received referrals from multiple insurance companies alleging the vocational school, Caledonian, had committed workers’ compensation fraud. The school was misusing Supplemental Job Displacement Benefit Vouchers, which provide injured workers with up to $6,000 for retraining at a post-secondary educational institution. The training helps the injured worker become more competitive in the job market when they are unable to return to their former vocation field due to being on total or temporary disability. 

During the course of the investigation, the department served a search warrant upon Caledonian and seized evidence consistent with the speculation that the school offering courses outside of which they were approved, as mandated by the Employment Development Department’s Eligible Training Provider List and Bureau for Private Postsecondary Education’s course approval. The search warrant also provided additional evidence that the school did not offer full instruction hours for courses, instructed students through third party vocational institutions, provided distance learning when not approved, and instructed students in languages outside of the approved language.

Additionally, evidence found Caledonian paid vocational counselors and employees to refer students, which is a labor code violation. Caledonian paid $496,147 to vocational counselors for those illegal referrals. Accepting payment for referrals is also a violation and the evidence showed multiple vocational counselors accepted and received a total of $489,530 for their illegal referrals.

The investigation determined Caledonian was not only depriving students of their education, they were also receiving money from insurance companies for the services not rendered. Further, vocational counselors received illegal kickbacks payments from Caledonian for student referrals. The vocational counselors allegedly involved in the scheme are Jenny Villegas, Friends for Injured Workers CEO, Laura Wilson, CEO of Laura Wilsons and Associates, Jesus (Jessie) Garibay, Gordy’s Legal Service Director, and Hazel Ortega, CEO of Ortega Counseling Center. All six defendants have been charged with violating Penal Code 550(a)(1), Labor Code 3215, and Insurance Code 750.5. As Insurance Code 705.5 stipulates it is unlawful to receive or accept money for referrals, the chargeable fraud amount is $985,677.

Frias, Colon, Villegas, Wilson, and Ortega were arraigned yesterday, August 19, 2024. Garibay was arraigned June 7, 2024. The defendants are scheduled to return to court on October 7, 2024. The Los Angeles County District Attorney’s Office is prosecuting this case.

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