Grand jury indicts 7 in vocational school fraud case

Crime Watch

BAKERSFIELD, Calif. (KGET) — A grand jury has indicted seven people connected to a Bakersfield vocational school for allegedly stealing more than $100,000 in benefits meant to help injured workers.

Those indicted were employees and owners of Instituto Hispano Americano, located on Chester Avenue, according to a Kern County District Attorney’s office release. Employees of two local law offices were also indicted.

The law offices were not named in the release. Prosecutors said they are not releasing that information at this time “because the alleged actions of the individuals were not attributed to the law offices or other employees/owners of the law offices.”

Anna Ayala-Reyes, Sylvia Carrillo, Evelyn Cruz, Martin Cruz, Nelfido Rolando Cruz, Cynthia Ozaeta and Sandra Paredez have pleaded not guilty to charges spanning a total of 85 counts. The charges include conspiracy, hiding facts of insurance entitlement benefits and concealment of financial interest.

Their next hearing is scheduled June 11.

“Like many types of programs that benefit the public at large, worker’s compensation laws can only help the people who need it most if they are protected from fraud and other schemes designed to misappropriate funds,” District Attorney Cynthia Zimmer said in the release. “When evidence of abuse of the workers compensation system is identified, it will be investigated and prosecuted to hold wrongdoers accountable and ensure that benefits remain available for those genuinely qualified to receive them.”

Prosecutors said the charges relate to alleged misuse of Supplemental Job Displacement Benefit Vouchers, which provide injured workers on disability with up to $6,000 for retraining to make them more competitive in the job market.

Th defendants are accused of defrauding 20 insurance companies out of more than $100,000 by exploiting the voucher program. They sent false or misleading documentation to insurance carriers saying the injured workers were eligible to receive voucher money despite the students not meeting the minimum qualifications for the program, the indictment says. It’s alleged the school lied about dozens of test results required for enrollment.

The injured workers were directed to the school by employees of local law offices who were paid as much as $600 for each referral, prosecutors said.

The years-long investigation comprised multiple search warrants, arrests in several counties and the review of thousands of seized documents.

“By allegedly misusing benefits designed to help injured workers re-enter the workforce and be able to make a living, this business cheated workers, insurance companies and our state,” Insurance Commissioner Ricardo Lara said in the release. “Workers’ compensation vouchers are a vital program for retraining injured workers and the Department of Insurance will continue to protect it.”

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