San Ramon residents Anthony Montanelli, 34, and his father, Steven Montanelli, 63, pleaded guilty recently to one charge of conspiracy to commit mail fraud each and entered separate plea agreements the Northern California District Court.
According to an announcement from the Department of Justice, the pair allegedly diverted more than $1.5 million in medical equipment to their own company, defrauding Kaiser for nearly a decade working as Kaiser employees.
The guilty plea means the two acknowledge damages to Kaiser amounting to more than $1.5 million, in what DOJ officials called "a scheme to divert medical equipment owned by (Kaiser) for use in their own San Jose-based company."
According to the announcement, the plea agreements from the two Montanelli men state that they worked as biomedical engineers, specializing in work on ultrasound systems throughout the company's Bay Area locations.
"The defendants used their positions at Kaiser to order new ultrasound parts that were supposed to be used to repair, replace, and/or maintain Kaiser’s medical equipment, but instead were diverted to their own business, Pacific Coast Imaging (PCI)," the DOJ announcement on Jan. 18 said. "They then sold the diverted equipment through PCI for their own profit. The father and son also admitted operating their scheme and business, which they did not disclose to Kaiser, while being paid by Kaiser to service Kaiser-owned equipment."
The scheme began early in 2010, according to the statement, and ran through spring of 2018. During that time, the two defendants pleaded guilty to stockpiling ultrasound systems and parts taken from Kaiser. The two acknowledged that an unknown number of ultrasound parts were ordered through Kaiser's procurement specialists, and diverted to their own company, PCI, as well as recording Kaiser-owned ultrasound systems and parts as out-of-commission while also diverting them to PCI.
"In sum, the defendants both admitted they diverted Kaiser-owned equipment to PCI, operated PCI while employed by Kaiser, and used work hours paid for by Kaiser to operate PCI," the DOJ announcement continued.
The two defendants are facing a maximum penalty of 20 years in prison and fines of up to $250,000, following the prosecution that stemmed from an FBI investigation into the matter.