Part Four in new News-Press Series

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BY PETER LANCE, SPECIAL TO THE NEWS-PRESS

October 6, 2012 8:02 AM Fourth of five parts

On the website of the California Department of Insurance there’s a lengthy section dedicated to workers’ compensation fraud. The site proudly notes that in fiscal year 2009-2010 district attorneys across the state prosecuted 1,339 cases of workers’ compensation fraud, resulting in 593 convictions.

The department’s Fraud Division is staffed by 194 sworn peace officers and detectives, many of them former police officers. The website even features a page with a picture of a detective’s shield over this pledge: “The Fraud Division will protect the public and prevent economic loss through the detection, investigation, and arrest of insurance fraud offenders.”

But when it comes to probing whether the Santa Barbara Police Department’s award-winning DUI officer, Kasi Beutel, committed multiple acts of workers’ compensation fraud, the information gathered in this investigation suggests that there is a reluctance to get to the bottom of allegations involving a fellow peace officer.

First, in an investigation to determine whether Officer Beutel sustained a shoulder injury during a controversial DUI arrest in 2009, a senior detective captain from the Fraud Division’s Valencia office traveled to Santa Barbara in the summer of 2011 and had meetings with personnel from the Police Department and City Attorney’s Office. But he left town without interviewing the central complaining witness, and closed the investigation two weeks after it had been opened.

Then after a deputy commissioner, confronted with new evidence, reopened the probe in August 2011, the newly assigned investigator — a sergeant — traded emails with the witness and his lawyer for months. Apparently unwilling to make the drive to Santa Barbara, he ultimately offered to conduct the investigation by phone.

In June of this year, after receiving new evidence that Officer Beutel used a three-month sick leave in 2011 as a way to avoid DMV subpoenas, the insurance department referred the matter to the chief of the Fraud Liaison Bureau. But he has yet to communicate with any of the parties in possession of the evidence, other than to announce that information generated in the course of the investigation was confidential.

The alleged insurance fraud by Officer Beutel involves two issues: a restitution claim of $7,772.89 made by the city in June 2011 for the alleged shoulder injury, which the city then drastically reduced after claiming a “mistake” by its risk management staff, and the 90-day sick leave Officer Beutel took between August and November 2011, during which she avoided two DMV hearings, with the help of a pair of Santa Barbara Police Department lieutenants who swore under oath that she was too sick to testify at a time the evidence proves that she was healthy.

We presented some of the evidence relating to the “shoulder” claim in Thursday’s timeline, but we’ll offer additional details today along with a fuller examination of the 90-day-leave issue.

50,000 VOLTS AFTER A DUI STOP

On Aug. 22, 2009, Michael Kenny, then 40, a lifelong Santa Barbara resident who dives for sea urchins off the Channel Islands, was driving his Ford pickup truck toward Santa Barbara Harbor at 9:15 p.m. when he was pulled over on La Marina by Officer Beutel, who claimed he “did not have any rear lights.”

Before the incident was over, Officer Beutel had fired her Taser X26 at him from a range of two feet, shooting into his chest a pair of probes that unleash a force of 50,000 volts. Terrified, Mr. Kenny pulled out the probes and ran, only to be apprehended later.

In her police report, Officer Beutel stated that she stopped Mr. Kenny 10 minutes after the dispatch log showed she’d arrived. But that wasn’t her only misstatement of fact. In her arrest narrative of the incident, Officer Beutel alleged that Mr. Kenny had “kicked (her) in the right hip with his right foot (and) forcibly shoved (her) backwards as he exited the vehicle.”

None of the other seven officers who responded to the Kenny call offered any corroborating evidence of an injury sustained by Kasi Beutel, and on page nine of the police report next to the designation “Type of injury” it stated “None.” Below that, next to the designation “Injury sustained by Officer,” it said “Not Injured.”

In researching the Kenny incident, I discovered a 6-minute, 48-second gap missing from an audio recording Officer Beutel had made of the Kenny stop — an incident in which, by her own account, she reached through the window of his truck and touched him with the X26 to get him to exit.

The audio of the recording can be downloaded HERE

Her interaction with Mr. Kenny begins 2:26 minutes into the recording, when Officer Beutel walked back to Mr. Kenny’s car after checking his license. It includes the tasering incident and continues through her foot pursuit of Mr. Kenny. A transcript can be downloaded HERE:

Though Officer Beutel disputed it, the evidence suggested that Mr. Kenny left the truck on the driver’s side. After he was tasered and hid at a nearby construction site, one of the two officers who put him in handcuffs was Mark Corbett, the former head of the SBPD’s Drinking Driver Team whom Kasi Beutel reportedly married in 2011.

Mr. Kenny was initially charged with DUI, battery on a peace officer and resisting arrest. But the blood test he demanded showed that he had a blood alcohol content of .07 — below the legal limit, so the driving-under-the-influence charge was dropped.

Since there was no proof beyond Officer Beutel’s claim that Mr. Kenny had kicked her in the hip, the battery charges were also dropped. But after more than a year of litigation, which cost him upward of $8,500 in legal fees and costs, Mr. Kenny pleaded guilty to resisting arrest and was sentenced to 35 days of house arrest — and forced to wear a tracking device.

The workers’ compensation claim — not alleging an injury to Officer’s Beutel’s hip during the August arrest, but to her shoulder — wasn’t filed until Nov. 14, 2009, and Mr. Kenny had no knowledge of it.

Further, at the time of his arrest, Mr. Kenny’s attorney had no idea that Officer Beutel appeared to have lied in her report or that almost seven minutes were missing from the recording — a clear violation of “Brady” rules, which require prosecutors to turn over any exculpatory evidence including material that might impeach the credibility of the arresting officer.

In addition to the missing evidence and false information in her police report, Officer Beutel even seemed to lie about the results of a Horizontal Gaze Nystagmus test, which she claimed to have performed on Mr. Kenny when he was still in his truck with the window partially rolled up.

Robert LaPier, a retired State Police officer who performed hundreds of HGN tests and reviewed the Kenny file, called it “impossible” for Officer Beutel to have conducted the test under those conditions. On July 26, after I sent my findings to the Department of Insurance, the Fraud Division opened an investigation.

THE $7,762.89 WORKERS’ COMP CLAIM

On June 17, 2011, despite no evidence of an injury in the police report beyond Kasi Beutel’s claim that Mr. Kenny had kicked her in “the right hip,” his former attorney received a letter from the city of Santa Barbara’s Finance Department alleging that Officer Beutel had sustained an injury to her shoulder “while taking Kenny into custody.”

The letter stated that, “Officer Beutel has now completed treatment for these injuries which included, $2,274.02 in paid medical costs to date and $5,488.87 in temporary disability payments.” The city then asked the Santa Barbara County District Attorney’s Office to request restitution from Mr. Kenny for the damages, which allegedly totaled $7,762.89.

“To get this letter 22 months after I was tasered, when there is zero evidence in the police report beyond Officer Beutel’s word that she was injured, is beyond belief,” Mr. Kenny told me. “Didn’t anybody in the Risk Management Department read the police report where it says …that Officer Beutel sustained no injuries?”

Confronted with the new evidence, Mr. Kenny fired his former lawyer and hired Darryl Genis, who was then representing me following my arrest by Officer Beutel on Jan. 1, 2011. Irregularities that I noticed in my own police report led to my investigation, which resulted in a multi-part series in the Santa Barbara News-Press last year.

The criminal case against me was dismissed on Nov. 15, 2011, and the DMV restored my full driving privileges in March, but I’ve continued my probe because a $12,000 study by the city into my findings conducted by ex-police officers has been kept secret.

On Mr. Kenny’s behalf, Mr. Genis filed a notice for a hearing seeking additional discovery that might shed light on the $7,762.89 “shoulder” claim. The hearing was set for Aug. 4, 2011.

INTERVENTION BY THE CITY ATTORNEY

But on the very afternoon before the hearing, City Attorney Steve Wiley sent a letter to the district attorney claiming that Kasi Beutel’s medical bill was actually $833.72, and that the $7,762.89 claim was the result of a “substantial mistake” by risk management staff.

He then went out of his way to exonerate Officer Beutel, claiming that “there is nothing excessive, inappropriate, or at all suspicious…about this very minor workers’ compensation claim … Not only did SBPD Officer Beutel have nothing to do with this mistake, she was not even aware that restitution had been requested by City — much less aware that Risk Management had provided the District Attorney’s Office with the incorrect amount.”

But the sudden reduction in the claim by the city had the immediate effect of dropping the maximum penalty facing Officer Beutel, if convicted of fraud, from five years in state prison and a fine of $50,000 to six months in jail and a $1,000 fine.

The next day, after Mr. Wiley had intervened with the District Attorney’s Office, Santa Barbara County Superior Court Judge Jean Dandona, who was scheduled to hear Darryl Genis’ motion for discovery, dismissed the restitution matter on her own motion, thus preventing the Kenny defense from learning any more details about the mysterious “shoulder” injury. The judge’s dismissal meant Mr. Kenny was no longer responsible for the medical bill of $833.72.

“You would think,” said Mr. Kenny, “that if you were a police officer and an investigative reporter had leveled charges against you this serious, that you would be fighting tooth and nail to prove your innocence. You’d take a polygraph. You’d submit to any interview you had to, under oath to clear your name. But with Kasi Beutel as happened in my case, the city has done nothing but cover it up.”

CLOSING, THEN REOPENING, THE CRIMINAL FRAUD PROBE

The Department of Insurance Fraud Division opened a criminal investigation into the Kasi Beutel “shoulder” injury claim on July 26, 2011. But on Aug. 10, I learned that Capt. Randall Richardson of the Valencia office had come to Santa Barbara, met with police officers and members of Mr. Wiley’s staff, then left without ever talking to Michael Kenny. Then seven days after Mr. Wiley’s letter to the D.A., Capt. Richardson closed the investigation.

Five days later, after I presented additional evidence to Deputy Insurance Commissioner Byron Tucker, the investigation was reopened and remains ongoing, although, as we’ll see, the Department of Insurance has demonstrated little or no effort to get to the bottom of the Kasi Beutel workers’ compensation fraud allegations.

FRAUD INVESTIGATOR NEVER MEETS MICHAEL KENNY

By early fall the case had been assigned to Commerce-based insurance department Sgt. Albert Wong. But it was clear from his first contact with Michael Kenny that Sgt. Wong’s approach to the investigation would be even less formal than Capt. Richardson’s.

In an email dated Oct. 7, 2011, Sgt. Wong proposed that he meet Mr. Kenny at a Starbucks in Carpinteria. For unknown reasons, Sgt. Wong wrote that, “I would like to meet you outside the city of Santa Barbara…to discuss your Aug. 22, 2009, incident as it relates to the subsequent work-related injury claim filed by Officer Beutel.”

Mr. Kenny responded by email on Oct. 13 that he’d been sick and asked to put the meeting off “for at least a week.” That same day, Sgt. Wong replied and thanked him for “the notification.”

A short time later Darryl Genis emailed Sgt. Wong informing him that he represented Mr. Kenny who would cooperate and “submit to as detailed a process as (Wong) demand(ed).” Mr. Genis suggested that they meet in the conference room of his law office “so you won’t need to conduct this important interview in such an unsecured location as a Starbucks.”

In an interview for this piece, Michael Kenny said that Sgt. Wong’s suggestion that they meet in a coffee shop surprised him. “I couldn’t understand why he didn’t want to meet me in Santa Barbara. We could have met first in Darryl’s office and then visited the scene of the tasering.”

“If Mr. Wong wanted to really get to the bottom of who was lying and who was telling the truth, why not go down to La Marina? I had a different pickup at that point, but I could have shown him what happened. We could have played the recording from Beutel that we had and he could have made up his mind in a more intelligent way.”

On Oct. 17, 2011, Sgt. Wong emailed Mr. Genis and asked if Mr. Kenny, who worked as a diver and was only available on weekends, might be able to meet during the week.

The next contact between them wasn’t until Nov. 15, when Mr. Genis emailed Sgt. Wong asking “when would you like to meet and interview Mr. Kenny?”

The following day, Sgt. Wong replied proposing the week of Dec. 6, 2011, for a meeting at Mr. Genis’ office in downtown Santa Barbara.

The next email in the chain of correspondence didn’t come until late January of this year when Mr. Genis asked Sgt. Wong when he’d like to meet. Sgt. Wong replied a few hours later suggesting they set a time the following week. “I assume it will be at your office,” he wrote.

THREE MONTHS GO BY WITHOUT A MEETING

For unknown reasons, there was no further contact between Sgt. Wong and Darryl Genis regarding the Fraud Division’s investigation of the Kasi Beutel “shoulder” injury claim for another 98 days, until May 4, 2012.

Further, Sgt. Wong’s offer to meet on the Kenny matter came only after I sent a detailed email to Byron Tucker, the deputy commissioner, informing him of the new evidence we had developed regarding Kasi Beutel’s 90-day sick leave in 2011.

In that email I let Mr. Tucker know that all charges against me had been dropped but that I’d returned to investigating what News-Press columnist Terry Tyler had referred to as “Kasi-gate.”

Attached to the email was a detailed pleading that Darryl Genis had sought to file in Ventura County Superior Court on Jan. 17, in an effort to get a judge to order Officer Beutel to appear at a Department of Motor Vehicles hearing in my case, which was still pending at the time.

The pleading included a sworn declaration by Kasi Beutel dated Jan. 7, 2012, in which she’d stated under oath that “on Aug. 11, 2011, at the recommendation of my physician, I was placed on extended medical leave. The city of Santa Barbara and the Santa Barbara Police Department were notified that due to medical reasons I was unable to work until I received clearance from my doctor. I was cleared by my physician to return to work on Nov. 11, 2011. I returned to full duty on that date.”

At that point we had evidence that on Aug. 27, 2011, 13 days prior to the DMV hearing, SBPD Lt. Donald Paul McCaffrey filed a Notice of Unavailability, swearing under oath that Kasi Beutel was off due to what was termed an “Extended Illness” relating to “I.O.D. — Injury on Duty.”

But we also knew that on Sept. 6, just two days before the DMV hearing, she gave a 30-minute interview at the District Attorney’s Office in which an audio recording proved she was healthy and fit to testify.

In her sworn declaration, Officer Beutel had failed to reveal that interview with the D.A. for which she had to travel some 110 miles round-trip between her home in Newbury Park and Santa Barbara. The DMV office where the Sept. 8 hearing was scheduled was in Ventura, a point much closer and more convenient to her home.

So in my email to Deputy Insurance Commissioner Byron Tucker, I informed him that we’d developed evidence based on Officer Beutel’s own sworn admission that she had taken off 90 days for an alleged “Injury on Duty,” when, in fact, this sick leave was little more than a sham…to twice avoid legally served subpoenas for her to testify at the DMV.

“As a journalist,” I wrote to Mr. Tucker, “I am very troubled by the fact that since early Fall of 2011, Mr. Genis has made repeated requests to meet with Sgt. Albert Wong, the investigator from your department who was supposed to be looking into the Michael Kenny matter and for reasons unknown to Mr. Genis, Sgt. Wong never seemed willing or able to make a date to come to Santa Barbara to get Mr. Kenny’s side of the story.”

Mr. Tucker replied almost immediately that he would “get an update” for me “next week.” But less than an hour later, Sgt. Wong emailed Mr. Genis that he “would like to meet with (Kenny) in the next couple of weeks.”

“I need the exact date your client is available,” he wrote.

BLAMING DARRYL GENIS FOR THE DELAY

However, four days later on May 8, the Department of Insurance seemed to be getting defensive. In an email to me, Deputy Commissioner Tucker acknowledged that “our investigation remains open.” But he added that his “investigators have made multiple attempts to interview Mr. Kenny, many of which were cancelled/postponed by his attorney.”

That same day, Darryl Genis responded with a detailed letter to Sgt. Wong copied to Byron Tucker. Calling Mr. Tucker’s statement that he had cancelled or postponed multiple meetings with Michael Kenny and Sgt. Wong patently untrue, Mr. Genis attached a full copy of his Jan. 17 Ventura Superior Court filing with exhibits, a document that ran to more than 270 pages. It included sworn declarations by Officer Beutel, Lt. McCaffrey and Lt. James Pfleging, a second SBPD lieutenant who’d filed an eleventh-hour Notice of Unavailability for a second DMV hearing that Kasi Beutel avoided on Oct. 13, 2011, due to what Lt. Pfleging called “Off Duty medical.”

The package also contained the full 36-page transcript of Officer Beutel’s Sept. 6, 2011, interview conducted in the D.A.’s office, along with a DVD recording of the interview proving that she was healthy enough to testify two days later at the DMV.

 

 

 

 

 

 

 

 

In his cover letter Mr. Genis noted that, “This DVD is the audio equivalent of catching a cop who has filed a fraudulent WC claim, exercising after he’s been wearing a neck-brace in public. Coupled with the unanswered questions between Officer Beutel’s two (2) previous WC claims — the Kenny case in 2009 and a previous claim in 2007 (also purportedly related to an on duty injury) — your criminal fraud division should be all over this.”

Mr. Genis urged the deputy commissioner to “examine this material forthwith” and get back to him to schedule a time that was mutually beneficial.

On May 10, Mr. Genis’ office sent by FedEx full copies of the Jan. 17 pleading and exhibits including the DVD to Byron Tucker and Albert Wong, proposing either two Saturdays — May 19 or 26 — as dates when Sgt. Wong might finally travel to Santa Barbara to interview Michael Kenny. Mr. Genis noted that while Saturday is not a “traditional working day” he had a full court schedule and was unavailable to meet during the week.

Mr. Genis followed up the next day with another email to Sgt. Wong asking him to call to confirm the date and time of a Kenny meeting. Four days later, Sgt. Wong sent Mr. Genis a terse email stating “I will not be able to attend your proposed date.”

The next day I sent an email to Sgt. Wong’s superior, Mr. Tucker, noting that, “We are earnestly trying to schedule the meeting with Sgt. Wong which would include me because I developed evidence, which I detailed in my News-Press series, that Officer Beutel withheld evidence exculpatory to Mr. Kenny in her police report on his arrest. There are other issues that I uncovered relating to the Kenny incident that go directly to Officer Beutel’s credibility and thus Sgt. Wong’s investigation, so it is essential — if he is really going to do an unbiased probe — that I speak with him as well.”

A key piece of evidence I uncovered involved those nearly seven minutes missing from Kasi Beutel’s audio recording of the Kenny stop and tasering. Just how I’d calculated that, based on a detailed examination of SBPD dispatch logs and police reports, should have been relevant to whether Officer Beutel or the Police Department had violated Brady rules and she had lied.

But in a reply email that same day, Mr. Tucker made it clear that the Fraud Division wasn’t interested in doing a full, unbiased investigation of the “shoulder” injury claim: “I’ve been informed by our investigative unit,” he wrote, “that you are not material to the claims of insurance fraud in this investigation and therefore will not be interviewed.”

Sounding defensive, he also cautioned me not to “imply we have ‘dragged’ our feet” in the Kenny probe, noting “Our ongoing investigation is well within the statute of limitations.”

Mr. Tucker closed by acknowledging receipts of the FedEx package with the new evidence of alleged fraud relating to the 90-day sick leave and said that he had “forwarded them for review.”

WONG CONFIRMS RECEIPT OF NEW EVIDENCE

On May 16, 2012, Sgt. Albert Wong emailed Darryl Genis confirming that he’d received the evidence package on the new 90-day fraud claim. Mr. Genis got back to him the next day, asking “When can you meet with Mr. Kenny?” and also requesting the sergeant’s phone number.

When Sgt. Wong didn’t respond, Mr. Genis emailed again the next day: “Dear Sgt. Wong, What will it take to get a commitment to meet from you?”

On May 22, after multiple requests by Michael Kenny and Darryl Genis that Albert Wong travel to Santa Barbara as Capt. Randall Richardson had done when he met with witnesses favorable to Kasi Beutel, Mr. Wong sent Mr. Genis this email:

 

 

 

 

 

 

 

 

Now, more than nine months after Byron Tucker had reopened the investigation into alleged workers’ compensation fraud in the Kasi Beutel shoulder injury claim, Sgt. Wong, the second detective assigned to the case, who repeatedly pledged to visit Santa Barbara to interview Michael Kenny in the presence of his lawyer, was now dialing back and declaring that he could conduct the interview by phone — either that or self-employed fisherman Mr. Kenny would have to take time off work and drive hours to a Fraud Division office to meet him.

“That email from Mr. Wong made it crystal clear,” says Mr. Genis, “that this Fraud Division, populated largely by ex-police officers, was unwilling to go the distance to investigate not one, but two viable allegations of fraud against another cop, Kasi Beutel. It was the blue code of silence on steroids — the unwritten rule that cops just don’t go after other cops.”

But Mr. Genis didn’t let it rest there. That same day, he wrote to Sgt. Wong, alleging that his proposals to interview Mr. Kenny by phone or at a distant Fraud Division office “suggest that you are merely going through the motions in an effort to whitewash or close out this investigation.”

“It is absolutely imperative that as (Mr. Kenny’s) attorney I am present during the interview in order to (ensure) that a thorough investigation is done,” Mr. Genis wrote.

He suggested that the Fraud Division examine the police report including Officer Beutel’s narrative against other evidence uncovered by me pointing to problems with her credibility, because credibility is a central issue in assessing whether she sustained a shoulder injury, as she later claimed, and for which a workers’ compensation benefit was paid.

“There is simply no way you can do an unbiased investigation without being here in Santa Barbara and affording Mr. Kenny the same courtesy that Capt. Randall Richardson of the Fraud Division in Valencia afforded the city of SB and Officer Beutel when he made the trip up here last summer,” Mr. Genis wrote.

Mr. Genis concluded by proposing that they meet that coming Saturday, May 26.

ASKING WHO IS INVESTIGATING THE FRAUD ALLEGATIONS?

A week later, on May 29, when he didn’t hear back from Sgt. Wong, Mr. Genis wrote to the deputy commissioner, Mr. Tucker, asking, “who is investigating the original WC fraud allegation arising out of the arrest of my client Michael Kenny” and “who is investigating the newly uncovered WC fraud by Kasi Beutel arising out of the time when she was on comp leave and unable to attend DMV hearings.”

Two days later on Memorial Day, Mr. Tucker replied promising that “a response is forthcoming.”

On June 1, I sent him another email with links online to my original 13-part News-Press series on Kasi Beutel noting that back in August 2011, she had applied for her 90-day sick leave — just one day after Capt. Randall Richardson had closed the Fraud Division’s initial investigation, a “curious timing of events.”

I then took him through the events of the next 90 days, during which Officer Beutel used her sick leave to avoid two subpoenaed appearances at the DMV; asking him to consider the timing of the following events:

•Capt. Richardson does a perfunctory, one-sided investigation in which he meets with the city attorney and a series of officers, including, presumably, Kasi Beutel;

•The city at the time is jumping through hoops to reduce the initial $7,762.89 claim for the alleged “shoulder injury” below the threshold that would have subjected Officer Beutel, if found guilty, to serious prison time;

•Multiple lawyers including Darryl Genis and William Makler are seeking to grill Officer Beutel on the stand in court and the DMV about her credibility after my investigation uncovered potential bankruptcy fraud, perjury during her divorce proceedings and that she suborned the perjury of the very minister who married her, not to mention witnessing five Trombetta blood waivers in cases of her DUI arrestees that a nationally ranked handwriting expert had declared were forgeries;

•Aug. 10: Capt. Richardson closes the investigation;

•Aug. 11: Officer Beutel goes out on her third sick leave since November 2007, this time for 90 days. Later in a declaration she swears under penalty of perjury that she was too sick to testify;

•Aug. 25: Only after I presented probative details of the possible fraud in the Michael Kenny case did the deputy commissioner agree to reopen the investigation.

I then asked Mr. Tucker the inevitable question: Whether “the fix” was in between his department and the city of Santa Barbara?

“In retrospect, the conduct of Capt. Richardson in his perfunctory investigation which was closed just one day before Beutel went out on a city-sanctioned 90-day leave is too coincidental not to be investigated further,” I wrote, hoping to get an honest response.

I closed by reminding him that if anyone at the state Department of Insurance acted to protect Officer Beutel from criminal charges, they too, could be subject to criminal charges for obstruction of justice.

ALBERT WONG’S RESPONSE

Less than four hours later, at 3:43 p.m., Sgt. Wong sent what can only be characterized as a belligerent response to Darryl Genis:

“My management has directed me to respond as follows: As was mentioned earlier, Mr. Kenney can either call me or meet me at one of our regional offices. I can work with you to arrange a call with Mr. Kenney that is convenient for both of you. We will not be re-enacting Mr. Kenney’s arrest, nor speaking with Peter Lance.

“We will not be threatened, bullied, or dictated to on this investigation.

“Contrary to accusations, we have performed our due diligence in this matter. We have reviewed everything that Mr. Lance has submitted. It is all very interesting, but has no bearing on an allegation of workers’ compensation fraud.

“We have also sought out the opinion of a deputy district attorney specializing in workers’ compensation fraud prosecutions to get his thoughts. There is nothing in the information Mr. Lance has provided, or in the information we have reviewed, that covers the elements necessary to bring forth a criminal filing of workers’ compensation insurance fraud.

“Please contact me for either a phone call or meeting at one of our regional offices.”

Sgt. Wong didn’t say whether the deputy district attorney he consulted was in the Santa Barbara County District Attorney’s Office. Also it was difficult to see how the Fraud Division had performed its due diligence without talking to Michael Kenny or by dismissing evidence that went directly to Kasi Beutel’s credibility.

Then, three days later, I received an email from Deputy Commissioner Tucker suggesting that there was a larger problem: a real conflict in the Department of Insurance over how to proceed with the Kasi Beutel investigation.

NAMING YET A THIRD CONTACT FOR THE PROBE

Mr. Tucker’s email was addressed to me and Darryl Genis and copied to Don Katich, director of news operations for the News-Press; Scott Steepleton, the paper’s city editor; Michael Kenny; and defense attorney William Makler . It was a short message referring any “further questions and comments re: CDI’s investigation to Richard Krenz, Assistant Chief Counsel and Bureau Chief of the Fraud Liaison Bureau at: Richard.Krenz@insurance.ca.gov.”

That response raised more questions than it answered. First, as recently as three days earlier, on June 1, Sgt. Albert Wong had represented that he was the go-to person on the Kasi Beutel investigation. At that point he was still soliciting a time and date for a meeting with Michael Kenny.

Now with Byron Tucker’s terse referral to a senior lawyer in the insurance department, it was unclear just who was pursuing the multiple fraud allegations concerning the officer.

I emailed Byron Tucker that same day asking whether Albert Wong was continuing as lead investigator on the workers’ compensation fraud investigation? If so, had the insurance department opened a new investigation based on the information sent by FedEx? And if Mr. Wong was off the case who was handling it?

I also asked, when a date might be set for a competent and unbiased investigator to come to Santa Barbara to investigate the Kenny case and the 90-day sick leave-perjury issue that was recently submitted to the department.

The deputy commissioner never replied.

THREE MONTHS GO BY

On Aug. 30, 2012, without a word from Richard Krenz or anyone else in the department, I sent Byron Tucker one last email, copying Mr. Krenz and the other parties. It began with a brief summary of his department’s on-again, off-again, on-again, off-again investigation in the two Kasi Beutel matters.

Noting that I was now in the process of writing a new multi-part series for the News-Press, I asked him to “contact me forthwith and give me details on the status of your investigation — if, in fact, anyone from your Fraud Division has done anything to vet the previous allegations regarding Mr. Kenny or this compelling new evidence of fraud during Officer Beutel’s 90-day sick leave in 2011, her third workers’ comp claim since 2007 if the city of Santa Barbara is to be believed.”

The response from the Department of Insurance was swift and stinging. One day later, on Aug. 31, attorney Richard Krenz sent me an email regarding what he called the “Beutel Matter,” stating: “I will not be providing you with any information on this matter at all. The information you seek is confidential, and protected from disclosure to the public under the following provision of the Insurance Frauds Prevention Act.”

In his email, Mr. Krenz ignored the fact that I wasn’t just a reporter covering this story, I was the initial complainant who furnished the evidence in July 2011 that led to the opening of the criminal fraud investigation. I was also a witness in possession of singular and unique evidence relating to Officer Beutel’s misstatements of fact in Michael Kenny’s police report, and I’d been the initial complainant alerting the department to the second potential act of workers’ compensation fraud by Officer Beutel relating to her 90-day sick leave and subpoena avoidance in 2011.

Also Mr. Krenz didn’t explain why he was now citing the Insurance Code and imposing a gag order on the investigation after Deputy Commissioner Tucker and detectives Richardson and Wong however flawed their work may have been, had readily and willingly discussed the “Beutel matter” with me for months.

When I tried to get the email for Insurance Commissioner Dave Jones, Tucker refused to give it to me. I finally found an address on Jones’ campaign website: insurancecommissionerdavejones@gmail.com

APPARENT DOUBLE STANDARD IN THE FRAUD DIVISION

In my Aug. 30 email to Byron Tucker, I informed him that I’d done some research on Capt. Randall Richardson who had done a one-sided, short-lived investigation of the “shoulder” injury claim.

Capt. Richardson had been quoted in an Associated Press story dated March 2, 2010. It was published in The Guardian UK of London under the headline, “Woman Convicted In Case of Stolen Antoinette Watch” and circulated widely in newspapers across the U.S.

The piece described how the California Department of Insurance, with Capt. Richardson, apparently as lead investigator, had spent years trying to recover stolen property including jewelry and a watch once owned by Marie Antoinette from an Israeli thief named Naaman Diller.

According to the story, Mr. Diller’s widow, Nili Shamrat, 64, of Tarzana, who had reportedly received the stolen goods, was ultimately sentenced to five years probation and ordered to do 300 hours of community service.

Capt. Richardson’s account in the piece suggested that the insurance department had been working on the case since at least 2006. The story described how detectives followed a paper trail that led to safe deposit boxes and storage units in France, the Netherlands and Israel.

My question in the email to Byron Tucker was this: If Capt. Richardson was so dedicated to solving a fraud case involving stolen watches to the point of devoting more than four years to an international hunt, how dedicated is your department to uncovering possible fraud involving a sworn officer of the law Kasi Beutel?

“You have a staff of 194 sworn peace officers and investigators in your Fraud Division,” I wrote. “Many of them are ex-cops. Does that mean they have a bias against investigating possible fraud by one of their own? Are your investigators willing to go the distance and leave no stone unturned, even if it means locking up a fellow officer?”

At this point the only response we have is Richard Krenz’s email the next day stating he would not be providing “any information on this matter at all.”

Copyright 2012 By Peter Lance

 

 

 

One Response to Part Four in new News-Press Series

  1. David Moralez Reply

    October 8, 2012 at 12:23 am

    Maybe you should start to investigate the Fraud Division too. There is no law against investigating the California Department of Insurance Fraud Division. Although, I wouldn’t be surprise if there is language in their codes restricting access to “classified information” to complete a consequential investigation.

    Who would have to most to gain by seeing that the Fraud Division is performing due process and due diligence in the case? Find that resource and you have found your meal ticket. It’s not so important who starts an investigation as it is who finishes it.

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