Four people, including three workers’ compensation insurance adjustors for American International Group in California, are charged in connection with an alleged $1.5 million workers’ compensation scheme.

Rene Montes, 41, of Riverside, Calif.; Hector Porrata, 45, of Moreno Valley, Calif.; George Martinez, 42, of Apple Valley, Calif.; and Cara Cruz-Thompson, 46, of Victorville, Calif., all face felony charges including insurance fraud, according to California Insurance Commissioner Steve Poizner.

Between August 2003 and January 2006, Montes, who ran W.C. Surgery Centers and W.C.S.C. & Associates, fraudulently solicited funds from AIG claims services and Matrix Absence Management Inc. for outstanding medical liens on workers’ compensation claims for services rendered by medical professionals, Poizner’s office alleges.

Montes issued letters to both AIG and Matrix, indicating his two companies had been authorized by the medical providers to negotiate, settle and collect money to resolve unpaid liens. It is alleged that Montes did not have this authority.

As workers’ compensation insurance adjusters with AIG, Porrata, Cruz-Thompson and Martinez allegedly made payments of nearly $1.2 million to Montes’ two companies, according to the insurance department.

In February 2007, AIG received a demand on behalf of Coast Plaza Doctors Hospital for payment of nearly $100,000 in outstanding medical liens, but the insurer discovered they paid one of Montes’ companies for resolution of that lien.

AIG also learned that it made 49 additional payments totaling nearly $1.1 million to W.C.S.C. & Associates, believing the company was authorized to handle the unresolved liens. AIG also confirmed that all 50 payments to W.C.S.C. were made by only Porrata, Cruz-Thompson and Martinez.

An investigation by the California Department of Insurance and the Orange Co. District Attorney’s Office later found that the three had worked together at another workers’ compensation claims adjuster, Matrix Absence Management, where they allegedly defrauded that company out of more than $310,000.

“Workers compensation fraud drives up the costs for all businesses,” Poizner said in a statement. “In this economy, that means fewer jobs and higher unemployment. I am thoroughly examining the workers comp system to reduce costs and reducing fraud is just one area where costs can be reduced. CDI will continue to aggressively pursue workers comp fraud to minimize the costs in the system.”