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San Francisco psychiatrist to pay $1.4M in restitution for submitting false workers compensation reports

Published  February 10, 2022 1:20pm PST
Crime and Public Safety
Bay City News

Letters out to verify frozen EDD disability claims, delays persist

Legitimate disability claimants whose accounts were frozen by California’s Employment Development Department because of suspected fraud, are finally receiving letters to verify their identities and get the money flowing again.

SAN FRANCISCO - A San Francisco psychiatrist was sentenced in federal court Wednesday to serve 120 days in prison and pay $1.4 million restitution after he pleaded guilty to a scheme to submit false reports for non-disabled clients to receive federal benefits to which they were not entitled.

George Demetrius Karalis, 76, pleaded guilty Aug. 11 and was sentenced Wednesday by U.S. District Judge Charles Breyer, according to the U.S. Attorney's Office.

The government's sentencing memorandum describes meetings between Karalis and undercover agents where the defendant instructed his clients on how to obtain federal and state government benefits to which they were not entitled.

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Numerous legitimate California disability insurance claims are still frozen as the Employment Development Department (EDD) deals with a recent fraud attack.

According to his plea agreement, Karalis admitted that 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.

Karalis counseled his non-disabled clients on how to continue receiving benefits to which they were not entitled. Karalis also admitted that he submitted false reports and certifications about his clients so that they could continue receiving FECA benefits.

Karalis admitted that the total loss attributable to his conduct and is between $550,000 and $1,500,000. He also agreed to pay $1,400,000 in restitution, $920,000 of which will be paid to the U.S. Postal Service and $480,00 of which will be paid to the California Employment Development Department.