SAN FRANCISCO, Calif. (KRON) — A former San Francisco physician has been sentenced to 120 days in prison for submitting false reports for non-disabled clients, the U.S. Attorney’s Office for the Northern District of California announced.
76-year-old George Demetrius Karalis pleaded guilty to theft of government property in connection with a scheme to submit false reports, certifications, and applications for non-disabled clients to help them receive government benefits.
Court documents reveal Karalis was a medical licensed physician in San Francisco and between August 2015 and June 30, 2020, he treated U.S. Postal Service employees who were receiving Federal Employees Compensation Act (FECA) workers’ compensation benefits for alleged stress and psychological disorders.
Undercover agents who met with Karalis were able to discover how he instructed his clients on how to obtain federal and state government benefits.
Karalis admitted that he submitted false reports and certifications about his clients so that they could continue receiving FECA benefits — in addition to engaging in “up-coding,” a practice for billing psychotherapy sessions that either did not occur or did not last long enough to qualify for the billing codes that Karalis used.
According to court documents, Karalis also admitted that he helped non-disabled clients prepare and submit fraudulent applications and certifications for California’s State Disability Insurance program.
Karalis acknowledged that he knowingly provided fraudulent physician/practitioner certifications to support his clients’ fraudulent disability claims.
The estimated total loss is between $550,000 and $1,500,000.
Senior U.S. District Judge Honorable Charles R. Breyer sentenced Karalis to 120 days in prison and agreed to pay $1,400,000 in restitution, $920,000 of which will be paid to the United States Postal Service and $480,000 of which will be paid to the California Employment Development Department.
In addition to the prison term and restitution, Judge Breyer also ordered Karalis to serve three years of supervised release after his prison term, pay a $25,000 fine and forfeit $200,000.
As part of his plea agreement, Karalis agreed to surrender his medical license.