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EXCLUSIVE: Ex-Tri-City CEO Dr. Arthur Gerrick Emerges as Figure in Drobot, Calderon Corruption Case

Dr. Art Gerrick was released once the hospital and new management discovered improprieties.

Art Gerrick was released once the hospital and new management discovered improprieties.

The hospital immediately fired Gerrick when the improprities were exposed by internal investigation.

By Randy Economy and Brian Hews

Many people had never heard of Michael Drobot until two weeks ago when he was indicted on several felony counts connected in a massive political corruption case involving California State Senator Ronald Calderon, and his brother former Assemblyman Thomas Calderon.

Drobot now faces more than ten years in federal prison and has apparently cut a deal with the United States Attorney’s Office and is also working with members of the Federal Bureau of Investigation to provide key evidence in the case against the Calderons.

When Drobot was indicted two weeks ago, he foisted both Tri-City Regional Medical Center in Hawaiian Gardens and Pacific Hospital in Long Beach into a less than flattering national media spotlight.

Drobot and his “spine vendors” are no longer associated with Tri-City Hospital , and the leadership at the well-established and well-liked community based health care facility has been extremely pro-active in helping expose Drobot.

Hews Media Group-Community Newspaper has learned exclusively that the case involving Drobot and his “spine vendors” could include  Arthur  Gerrick, who in 2005 was hired as the Chief Operating Officer and President of Tri City Medical through a group called the “Serrano Management Group.”

HMG-CN requested and received more than two dozen pages of official filings that was provided to the United States Internal Revenue Service back in 2010 from current management and leadership at Tri-City that show how Gerrick conducted himself while overseeing the local medical facility.

The documents indicated that Gerrick engaged in “excess benefit transactions” and committed other acts of misconduct. IRS officials also learned that on Nov 8, 2010 the board of directors of Tri City Regional Medical Center placed Gerrick on administrative leave pending further progress in an independent investigation conducted by Sheppard, Mullin, Richter, and Hampton, LLP that had been called for on behalf of the board of directors of the facility.

“We were stunned, shocked and saddened at the level of corporate misconduct and concealment that was perpetrated by our former CEO,” said Brian Walton, chairman of the Board of Directors at Tri-City Regional Medical Center.  “Our former CEO was  a long-term health care professional whom we trusted with fulfilling our mission as a non-profit hospital. It’s been an arduous process of unraveling all of the financial malfeasance we discovered, but we are confident in our new administration’s ability to restore our focus to improving the wellbeing of the communities we serve.”

Four months later, on April 7th 2011 the board at the hospital terminated Gerrick as President and CEO.

Early in 2012, Jim Sherman, a veteran health care leader, was brought in to oversee the hospital’s operations. In addition, the hospital has added several other experienced individuals to its leadership team. The hospital also has added numerous new physicians to its medical staff, including recognized leaders in their respective areas of specialization.

Around that same time, hospital personnel informed their legal attorney Bearl Weiner of the Law firm of Selvin and Weiner APC about Gerrick’s activities, and that according to the report filed to the IRS, Gerrick “had engaged in and/or failed to stop a variety of harassing, offensive, intimidating, or oppressive acts that allegedly resulted in the creation of a hostile work environment” at the Hawaiian Gardens based medical facility.

Attorney Weiner promptly reported the allegations to the hospital board directors regarding Gerrick, and the board immediately launched an internal investigation.

HMG-CN has also learned that Gerrick spent hospital funds for improper payments (allegedly given to Drobot) over a number of years.  The Sheppard Mullin investigation also revealed that when Gerrick tried to get payments or reimbursements, the hospital’s Director of Finance at Tri- City Medical Group refused to approve such payments unless Gerrick “complied with hospital and internal revenue service requirements concerning documentation for payment or reimbursement of expenses.”

The IRS filing slams Gerrick for repeatedly failing and refusing to follow mandated protocol and as a result Tri City Hospital’s Director of Finance refused to approve such payments and also refused to sign expense reimbursement checks that Gerrick had requested.

HMG-CN has also learned that Gerrick alone approved the payments and signed the checks, in direct contravention of Internal Revenue Service standards. In the IRS filing the hospital’s Director of Finance acknowledged that because of Gerrick’s “threats she felt intimidated by him and therefore did not report the events to attorney Weiner or the board.”

The newspaper was also informed that Gerrick caused Tri City Hospital to make “inappropriate arrangements with third-party vendors that were detrimental to the hospital.”

One of those vendors is believed to be Dr. Michel Drobot.

Sheppard-Mullin investigators also informed IRS officials that Gerrick “actively concealed his activities and actions in misconduct from Mr. Weiner and board of directors at Tri City Hospital.”

Drobot, 69, of Corona Del Mar, orchestrated a wide-ranging conspiracy involving the Calderon’s and according to Federal prosecutor’s paid illegal kickbacks in exchange for legislation to be written to directly benefit a multi-million dollar spinal surgery operation that was run out of the two facilities.

Drobot agreed to plead guilty to just two felony counts, which could send him to federal prison for as long as 10 years.

Prosecutors allege the Drobot, from 1997 to 2013, and the main owner of  Pacific Hospital until late last year, said that he “ran a scheme in which he billed workers’ compensation insurers hundreds of millions of dollars for spinal surgeries performed on patients who had been referred by dozens of doctors, chiropractors, and others who were paid illegal kickbacks.”

For the referrals for the spinal surgeries, Drobot typically paid a kickback of $15,000 per lumbar fusion surgery and $10,000 per cervical fusion surgery.

See documents click here.

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