Fraud Trial of Costa Mesa Attorney to Begin Today : Courts: Personal injury lawyer is charged with masterminding a scam in which staged auto accidents were arranged. He and an associate are accused of collecting $1 million in bogus medical insurance claims.

Adriana Fernandez was a struggling masseuse when a law firm began sending her clients who claimed they had been injured in traffic accidents.

Business picked up, but Fernandez said she began to suspect something was wrong when those clients would show up for one visit and never return. Also, she testified recently, it seemed a little unusual that she was asked to bill the law practice of Thomas F. Mullen in Costa Mesa at least $3,500 per client, regardless of whether they received physical therapy.

Still, she did business with Mullen’s firm, and as a result pleaded guilty last year to charges of grand theft and conspiracy to commit insurance fraud. Now the 39-year-old Santa Ana woman is scheduled to testify against Mullen and his business partner, Jose Jesus Toribio, who is her husband. The two men are accused of collecting as much as $1 million in bogus medical insurance claims.

Their trial is scheduled to begin today in Orange County Superior Court in Santa Ana.

Attorneys for Mullen and Toribio say their clients are innocent of the charges, and that it was only in hindsight that the defendants realized the traffic accidents had been staged.

Mullen, 45, of Costa Mesa and Toribio, 37, of Santa Ana were among a dozen people arrested in January, 1991, in connection with an alleged ring that staged traffic accidents to collect fraudulent insurance claims. Ten people, including Fernandez, have pleaded guilty to grand theft charges and several of them are expected to testify against Mullen and Toribio.

Mullen is the first personal injury attorney in Orange County to be prosecuted on charges of conspiracy to commit insurance fraud, according to Deputy Dist. Atty. Kenneth O. Chinn, who is prosecuting the case. He said attorneys are rarely charged with insurance fraud because “it’s too difficult to prove . . . and not easy to collect the evidence.”

Based on a two-year investigation by the California Highway Patrol, the Orange County district attorney’s office and the state Department of Insurance, authorities allege that Mullen and Toribio were the masterminds behind a ring that staged more than 100 accidents between 1987 and 1989.

Prosecutors contend that Toribio would recruit people to set up accidents. Mullen then would make auto and medical insurance claims on the collisions, split the money with Toribio and pay a fee to the people who staged the accidents, prosecutors say.

The defendants’ attorneys agree that the two made the insurance claims, but insist they had no knowledge at the time that the accidents were set up.

“The accidents were staged, there’s no doubt about that,” Mullen’s attorney, Salvatore Ciulla, said in an interview. “But personal injury attorneys represent so may cases, how could they know which ones were staged? And, if you did not know, you’re not guilty.”

In this case, investigators have confiscated more than 100 documents from the law firm that record what prosecutors allege is a conspiracy to collect fraudulent claims. Also, the prosecution has signed statements from at least five people alleged to have participated in the staged accidents, saying that Toribio hired them to set up collisions, according to court documents.

One of the prosecution’s strongest witnesses is Fernandez, who is married to Toribio.

Fernandez testified during the defendants’ preliminary hearing last November that she met Toribio in June, 1987. Shortly thereafter he began sending her clients who reportedly had been involved in traffic accidents.

She said she suspected that all was not legitimate because the clients would come in groups of three or four and tell her they had been involved in the same accident.

“My common sense told me that (there were) too many accidents with four people,” she testified. And it was “very difficult to get people to come in and get their therapy. If they were really, really injured, they would come.”

When their clients did not show up for their treatment, Fernandez “padded” their applications so that she could bill the practice at least $3,500 per patient, she testified.

She was never instructed by the defendants to falsify the applications, Fernandez said. She did it, she testified, “because it was the only way to make it profitable for me and for him or for them.”

Fernandez said she and Toribio were married in 1988 and he bought her clinic in July of that year. Prosecutors allege that Toribio--funded by Mullen--later bought a second clinic, FYA, the Physiotherapy Group Inc., in Santa Ana, to help process the increasing number of medical injury claims.

Authorities have shut down both clinics.

In a taped interview with CHP investigator Teresa A. Clark after his arrest, Toribio said he and Mullen shared a “50-50 partnership” in Mullen’s personal injury practice. Toribio told her he would recruit people who were involved in accidents to bring their cases to Mullen, Clark testified in the preliminary hearing.

Ciulla, Mullen’s attorney, said it is not illegal to pay for referrals. Though the ethics may be questioned, Ciulla said, the “buying of an accident” itself is not a crime and the practice is common among personal injury attorneys.

In Mullen’s case, Ciulla said, his client did not know that the accidents had been faked.

Chinn alleged during the preliminary hearing that Mullen had Toribio recruit people to stage accidents “to insulate (Mullen) from the fraud that was taking place.”

Mullen is free on bail while Toribio is in custody in Orange County Jail in lieu of $125,000 bail.

Both are charged with conspiracy to commit insurance fraud, conspiracy to commit grand theft and nine counts of grand theft. If convicted, they face state imprisonment, and Mullen could lose his license to practice law.