Lawyer Convicted of Workers’ Compensation Fraud
Post 5031
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In The People v. Jon Woods, G061948, California Court of Appeals, Fourth District, Third Division (March 18, 2025) a jury convicted Jon Woods of 37 felony counts of workers’ compensation fraud.
Woods was a worker’s compensation attorney who had made business arrangements that involved unlawful kickback and referral fees.
Woods contended that the Williamson rule (In re Williamson (1954) 43 Cal.2d 651, 276 P.2d 593) precluded convictions on counts 5 through 37. The Williamson rule states that where the Legislature has defined a specific crime with a lesser punishment, the conduct described by that crime may not be charged as a more general crime with a harsher punishment. Woods argued that his conduct was covered by a more specific statute, Labor Code section 139.32, which makes it a misdemeanor to refer work to third-party servicers in exchange for compensation.
THE WORKERS’ COMPENSATION SYSTEM
Workers’ Compensation is a scheme where employers agree to promptly compensate employees for injuries sustained on the job regardless of fault, and employees agree to the limited remedies available under the scheme.
The Legislature passed laws to protect insurers and the overall workers’ compensation system from abuse, including making it a crime to participate in a kickback scheme which was the criminal conduct of Woods, Gonzales and Arguello.
FACTS
Woods arranged with Edgar Gonzales to use copy services business called USA Photocopy, which provided subpoena services for workers’ compensation attorneys. USA Photocopy paid for some of Woods’s business expenses, including the salary of certain employees hired by Woods.
Woods’s arrangement with Arguello involved a marketing company that advertised to obtain workers’ compensation clients. Using Arguello’s copy service for subpoenas was a condition of engaging his advertising service. Woods paid Arguello’s businesses $1,425,000 in fees for advertising services over the course of their relationship.
Arguello pleaded guilty to federal criminal charges related to worker’s compensation fraud and was sentenced to four years in federal prison. He also pleaded guilty to charges brought by the Orange County District Attorney.
The Attorney General alleged four aspects of Woods’s relationships with Gonzales and Arguello that were illegal. These included operating as a runner or capper service, providing fully signed and retained clients prior to any interaction with Woods, a quid pro quo arrangement, and an illegal cross-referral service.
After conviction Woods was sentenced to four years in prison and ordered to pay restitution in the amount of $701,452.
THE APPEAL
Woods appealed, and the court reversed counts 5-37 based on the Williamson rule. Woods contended that his conduct is covered by a more specific statute that criminalizes kickback schemes, which is what Woods was accused of participating in, Penal Code Section 550.
DISCUSSION
Absent some indication of legislative intent to the contrary, the Williamson rule applies and there does not need to be perfect overlap between the general and specific statutes.
The People’s theory of how Woods violated Penal Code section 550 was precisely that he violated Labor Code section 139.32 and, therefore, the Williamson rule applies. The Court of Appeals agreed with Woods under these circumstances, and thus reversed his conviction on counts 5-37. This will also require reversal of the white-collar sentencing enhancement based on these charges, as well as a restitution award based on these charges. The restitution order of $701,452 was reversed without prejudice to the court reassessing restitution at a new sentencing hearing. In all other respects, the judgment was affirmed.
ZALMA OPINION
A lawyer committing fraud taking advantage of the Workers’ Compensation system where his crimes resulted in more than a million dollars of kickbacks and payment for cappers who illegally signed up clients for Woods. The court only found that the state overcharged Woods and required him to serve an appropriate sentence for his fraud on the Workers’ Compensation system, employers and their insurers. Jail and an appropriate amount of restitution to the defrauded insurers should be assessed.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Subscribe to my substack at https://barryzalma.substack.com/subscribe
Go to X @bzalma; Go to the Insurance Claims Library – https://lnkd.in/gwEYk
Convicted Criminal Seeks to Compel Receiver to Protect his Assets
Post number 5291
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Post number 5289
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Deerpass Trucking, an interstate motor carrier, leased the tractor from Deerpass Farms Services, LLC, and hauled cargo for Conserv FS, Inc. under a trailer interchange agreement. The tractor was insured by Great West Casualty Company with a $1 million policy limit, while the trailer was insured by Nationwide Agribusiness Insurance Company with a $2 million ...
Opiod Producer Seeks Indemnity from CGL Insurers
Post number 5288
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Insurers Exclude Damages Due to Insured’s Products
In Matthew Dundon, As The Trustee Of The Endo General Unsecured Creditors’ Trust v. ACE Property And Casualty Insurance Company, et al., Civil Action No. 24-4221, United States District Court, E.D. Pennsylvania (February 10, 2026) Matthew Dundon, trustee of the Endo General Unsecured Creditors’ Trust, sued multiple commercial general liability (CGL) insurers for coverage of opioid-related litigation involving Endo International PLC a pharmaceutical manufacturer.
KEY FACTS
Beginning as early as 2014, thousands of opioid suits were filed by governments, third parties, and individuals alleging harms tied to opioid manufacturing and marketing.
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Passover for Americans
Posted on February 19, 2026 by Barry Zalma
“The Passover Seder For Americans”
For more than 3,000 years Jewish fathers have told the story of the Exodus of the enslaved Jews from Egypt. Telling the story has been required of all Jewish fathers. Americans, who have lived in North America for more than 300 years have become Americans and many have lost the ability to read, write and understand the Hebrew language in which the story of Passover was first told in the Torah. Passover is one of the many holidays Jewish People celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and wonder how did all these wonderful things come into being. Jews believe the force we call G_d created the entire universe and everything in it. Jews feel G_d is all seeing and knowing and although we can’t see Him, He is everywhere and in everyone.We understand...
Passover for Americans
Posted on February 19, 2026 by Barry Zalma
Read the full article at https://www.linkedin.com/pulse/passover-americans-barry-zalma-esq-cfe-5vgkc.
“The Passover Seder For Americans”
For more than 3,000 years Jewish fathers have told the story of the Exodus of the enslaved Jews from Egypt. Telling the story has been required of all Jewish fathers. Americans, who have lived in North America for more than 300 years have become Americans and many have lostthe ability to read, write and understand the Hebrew language in which the story of Passover was first told in the Torah.
Passover is one of the many holidays Jewish People celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and ...
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Post number 5275
Posted on January 30, 2026 by Barry Zalma
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When Experts for Both Sides Agree That Two Causes Concur to Cause a Wall to Collapse Exclusion Applies
In Lido Hospitality, Inc. v. AIX Specialty Insurance Company, No. 1-24-1465, 2026 IL App (1st) 241465-U, Court of Appeals of Illinois (January 27, 2026) resolved the effect of an anti-concurrent cause exclusion to a loss with more than one cause.
Facts and Background
Lido Hospitality, Inc. operates the Lido Motel in Franklin Park, Illinois. In November 2020, a windstorm caused one of the motel’s brick veneer walls to collapse. At the time, Lido was insured under a policy issued by AIX Specialty Insurance Company which provided coverage for windstorm damage. However, the policy contained an exclusion for any loss or damage directly or indirectly resulting from ...
