Chiropractor Pleads Guilty in Phony Injury Scheme to Cheat RTD

A Los Angeles chiropractor pleaded guilty Tuesday to 18 counts of conspiracy, grand theft and forgery resulting from an alleged scheme to bilk the Southern California Rapid Transit District out of thousands of dollars through phony injury claims filed in connection with bus accidents.

In a related development, The Times has learned that the district attorney’s office has called witnesses before the Los Angeles County Grand Jury as part of its ongoing investigation of RTD insurance fraud. The grand jury, which can take secret testimony, could be used to seek indictments or to aid the investigation through its subpoena power.

The grand jury inquiry appeared to be part of the reason Municipal Court Judge Glenette Blackwell ordered documents related to the plea of Dr. Julius C. Brown sealed during court proceedings Tuesday. In an unusual action, Blackwell also ordered the record sealed on the revocation of bail and rearrest last Friday of another defendant in the case, attorney William L. Barnes.

Citing the judge’s order, Deputy Dist. Atty. Stephen S. Licker, the lead prosecutor on the case, refused to comment on any agreements that may have been reached with Brown. Brown’s attorney, Stuart I. Barth, also refused to comment.

An attorney representing Barnes said Tuesday that the judge had refused to tell him why his client’s bail had been revoked.

Al Albergate, a spokesman for the district attorney’s office, would say only that the reason for the unusual secrecy in the case may become clearer when Barnes reappears in court Friday.

Altogether five people were charged last week in the nearly year-old insurance fraud investigation. Two, Brown and insurance adjuster Linda Yvonne Thompson, have now pleaded guilty to fraud charges. Thompson is cooperating with investigators as part of an agreement by which she is to avoid serving jail time.

The fraud case, which Dist. Atty. Ira Reiner says may have cost the RTD $5 million, centers on phony injury claims against the RTD processed through the transit district’s adjuster, Leonard J. Russo Insurance Services Inc. Prosecutors contend that attorneys working with chiropractors filed phony claims after obtaining information on RTD bus accidents from Russo employees. The scam involved Russo employees’ selling detailed information about the location and circumstances of RTD bus accidents. The information was then used to concoct fraudulent claims.

In some cases, injury claims were filed and paid for victims who did not exist, investigators say.

In court Tuesday, Brown said he knew that his guilty plea will result in a state prison sentence. That sentence will be set Sept. 2.

Brown also agreed in court that the financial loss related to the specific charges filed against him amounts to a loss to the RTD of more than $100,000.

Barnes, a Los Angeles attorney, also appeared in court Tuesday, apparently to enter a plea. But at the last minute, his attorney sought a delay until Friday.

Barnes had been freed by Blackwell last week in an agreement negotiated in chambers between Barnes’ attorney and investigators. But Blackwell ordered him taken into custody later in the week, after another closed-door conference with a representative of the district attorney’s office.