Bakesfield attorney Phil Ganong set for ‘battle” over charges he fraudulently bill insurance companies in $22 million scheme

May 24--Facing multiple counts of insurance fraud, a defiant Phil Ganong on Wednesday denied wrongdoing in the operation of companies he said were set up to help people fighting addiction.

During a press conference at his downtown Bakersfield office, the veteran attorney said he believes prosecutors will find the companies and the drug testing they billed for were legitimate. He said he's prepared to fight his case in court.

"As you folks probably know about me, I do not shy away from a battle," he said.

Ganong, his wife, Pamela, son William, and three others, including two doctors, have been charged in Orange County in what prosecutors said was a $22 million urine test billing scheme.

Phil Ganong, 63, and Pamela Ganong, 61, owned sober living homes in Orange County, Bakersfield, Los Angeles and San Diego between January 2008 and December 2016 through their business, William Mae Company, which operated as Compass Rose Recovery.

The charges stem from the Ganongs' operation of of Compass Rose Recovery, as well as Compass Rose Staffing and a medical testing lab called Ghostline Labs. The companies submitted daily or frequent urine drug test samples for each employee under each company's health insurance plan.

According to prosecutors, the Ganongs fraudulently listed residents and non-residents of Compass as employees and expanded their health insurance policy to cover almost 100 employees. It's alleged Compass Rose Staffing was used as a front to overbill insurance companies for the collection and testing of urine.

In all, prosecutors said, the Ganongs billed insurance companies for $22 million, collecting $15 million.

Ganong said he was unaware of any wrongdoing on the part of his companies. He said his companies billed on behalf of legitimate employees, all of whom were recovering from addiction and needed testing several times a week to ensure they stayed off drugs.

Through frequent, in some cases daily testing, a relapse can be quickly identified and the person helped before the problem becomes worse or the addict tries to share drugs with others in the facility, Ganong said.

He said the companies were set up with the purpose of helping those suffering from "addiction disease" stay clean, develop work skills, earn a part-time wage and have health insurance. Some jobs at Compass involved acting as hall monitors at the sober living homes.

"We helped people get work, reclaim self-esteem and become more independent," Ganong said.

Also charged in the case are Susan Lee Stinson, 63, of Carlsbad, Dr. Carlos X. Montano, 61, of Newport Beach, and Dr. Suzie Schuder, 70, of Corona Del Mar. Stinson is the sister of Pamela Ganong.

Phil and Pamela Ganong face 47 years and eight months in prison if convicted of all charges.

A pre-trial hearing for Phil and Pamela Ganong is set for July 27.

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