Federal Court Sentences Southern California Chiropractor After U.S. Department of Labor Uncovers Healthcare Fraud

LOS ANGELES, CA – The U.S. District Court for the Central District of California has sentenced Mahyar David Yadidi – a San Pedro, California, chiropractor – to prison and ordered him to make restitution for defrauding the International Longshore and Warehouse Union-Pacific Maritime Association (ILWU-PMA) Welfare Plan. The court’s action follows an investigation by the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) and Office of Inspector General (OIG).

The court sentenced Mahyar David Yadidi – owner of Philips San Pedro Chiropractic – to 46 months in prison and ordered to make $1,976,832 in restitution for defrauding the maritime union welfare plan. 

Investigators found that, from July 2016 through October 2018, Yadidi, fellow chiropractor Ivan Semerdjiev and personal trainer Julian Williams engaged in a scheme to defraud the welfare plan. Specifically, the trio offered kickbacks to patients for visiting the clinic, and billed the plan for services not rendered to its patients, services not medically necessary and services provided by unlicensed and unqualified employees. In total, Yadidi, Semerdjiev and Williams submitted almost $5 million in claims to the plan, with the plan paying approximately $2 million.

As part of a plea agreement, Yadidi pleaded guilty in September 2019 to one count of conspiracy to commit healthcare fraud. 

The U.S. District Court for the Central District of California sentenced Semerdjiev and Williams after they pleaded guilty to one count of conspiracy to commit healthcare fraud. In July 2020, the court sentenced Semerdjiev to 6 months in prison and 6 months in home detention, and ordered him to pay $924,707. In December 2019, the court sentenced Williams to 3 months in prison and 3 months in home detention, and ordered him to pay $577,940.

Following his termination as an authorized chiropractic provider by the plan, Yadidi changed the name of his clinic from Synergy Healthcare and Wellness Center to Philips Chiropractic to avoid the consequences of being terminated, continuing to operate at the same address. As the clinic’s owner, Yadidi then submitted claims to the plan for services purportedly provided by the licensed chiropractor he hired.

The investigation revealed that Williams worked as a fitness trainer and provided personal training services to patients he recruited, a service not covered by the plan. Williams did not hold any licenses nor did he have any formal chiropractic or massage therapy training. 

Semerdjiev then falsified chart notes indicating that he treated those patients, and performed chiropractic adjustments and other “medically necessary” treatments, even if the patient only received routine fitness sessions. Philips Chiropractic continued to bill the plan for chiropractic adjustments, therapeutic exercises and manual therapy for patients’ visits – regardless of whether the plan participant or their beneficiary actually visited or received services from Philips Chiropractic. 

“Health plans are more frequently becoming the target of criminal activity, and it’s essential we hold bad actors accountable for these deceptive and fraudulent schemes,” said Employee Benefits Security Administration Regional Director Crisanta Johnson in Los Angeles, California. “The Employee Benefits Security Administration will continue to work aggressively with our investigative partners to combat fraud that puts the financial security of these health plans at risk.” 

“Mahyar David Yadidi conspired with others for years to steal funds from the International Longshore and Warehouse Union-Pacific Maritime Association Welfare Plan by billing for medically unnecessary services, including fitness training, for the plan’s participants. The criminal investigation and prosecution of those individuals who attempt to defraud health plans continues to be a high priority for the Office of the Inspector General,” said Special Agent-in-Charge Quentin Heiden, in the U.S. Department of Labor’s Office of Inspector General Regional Office in Los Angeles, California.

The U.S. Attorney’s Office for the Central District of California prosecuted the case.

EBSA’s mission is to assure the security of the retirement, health and other workplace related benefits of America's workers and their families. EBSA accomplishes this mission by developing effective regulations; assisting and educating workers, plan sponsors, fiduciaries and service providers; and vigorously enforcing the law. 

The mission of the Department of Labor is to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.