Fourteen Southern California residents have been charged by the Riverside County District Attorney’s Office in three cases of suspected workers’ compensation fraud related to two alleged “sham” schools that caused a loss to insurance carriers in excess of $22 million.
The investigation involved two for-profit vocational schools, Ryon College in Riverside and Sutech School in Los Angeles. The investigation was initiated by the DA’s office in January 2019 regarding supplemental job displacement benefits provided by workers’ compensation insurance carriers.
The defendants are charged with a variety of counts including conspiracy, insurance fraud, “capping” and receiving kickbacks, the DA’s office said in a news release on Friday.
Oswaldo Forero, 65, of Irvine, and Melbe Zepeda, 41, of Bellflower, are charged in the first case after an investigation revealed both operated the two “sham” schools that were primarily funded by workers’ compensation vouchers, the DA’s office said. The vouchers ranged in value from $6,000 to $10,000 and were intended for injured workers to be re-trained or to assist them in learning new skills to accommodate their disabilities, enabling them to re-enter the workforce.
The two are also alleged to have employed “cappers” to illegally recruit students to the schools. The “cappers” were paid to sign up as many students as possible to attend the schools, even if the student didn’t have a high school diploma or equivalent, the news release said.
“The priority of the defendants was to make money using various tactics such as over-billing for laptops and tools, collecting lucrative vouchers for students that never or rarely attended the school, faking admission tests and giving students cash for their vouchers,” said the DA’s office in the news release.
Their co-defendants charged in the two related cases are:
- Karla Mariela Arevalo, 29, of Fullerton.
- Estrella Juana Calix, 39, of Sylmar.
- Mariela Cardenas, 36, of Moreno Valley.
- Manuel Alberto Dimas, 40, of Costa Mesa.
- Sandy Lissette Flores, 43, of Lakewood.
- Jose Luis Gamas, 55, of Pomona.
- Juan Francisco Leal Gonzalez, 52, of Diamond Bar.
- Mauricio Giovanni Hernandez, 46, of Sherman Oaks.
- Edward Holguin, 36, of Norwalk.
- Jose Nicasio Lara, 58, of South Gate.
- Sarvia Ofelia Lopez, 53, of San Diego.
- Araceli Soto, 38, of Ontario.
Lopez is scheduled to be arraigned Monday at 9:30 a.m. at the Hall of Justice in Riverside, the DA’s office said. Gonzalez is scheduled to be arraigned Tuesday and Dimas is scheduled to be arraigned on Nov. 25. All other defendants have arraignments scheduled in December and March 2021, the DA’s office said.
The California Department of Insurance and the California Bureau for Private Post-Secondary Education assisted in the investigation.
Officials at the two schools named in the complaint could not immediately be reached for comment.
