Josh Leo Johnson, 35, of Santa Rosa, arrested earlier this month in Lake County for the June 4 assault at Konocti Vista Casino, is among the eight individuals charged in a 25-count federal indictment that includes allegations of conspiracy to commit financial institution fraud and wire fraud, according to U.S. Attorney Melinda Haag.

Johnson was arrested in the case during the week of Sept. 19, as were Jacob Moynihan, 30, of San Francisco; Gerald Moynihan, 51, of Santa Rosa; Greco, 38, of Rohnert Park; Raymond Foakes, 48, of Rohnert Park; Desiree Maclean, 25, of Rohnert Park; and Justin Batemon, 34, of Hayward, the FBI and US Attorney's Office reported.

Jerry Mays, 63, of San Pablo, remains at large, officials reported.

The defendants in the case each made their initial appearances in federal court in San Francisco on Sept. 22, and are scheduled to appear for a status conference before United States District Court Judge William Alsup on Nov. 8 at 2 p.m.

In the Lake County assault case, Johnson is facing charges including felony participation in a criminal street gang, misdemeanor fighting in public, misdemeanor battery and special allegations relating to the infliction of great bodily injury and the participation in a criminal street gang, according to the District Attorney's Office.

So far, it's not clear if the federal case will impede the Lake County prosecution, according to Deputy District Attorney Art Grothe.

“It is unknown exactly how the new federal prosecution will effect the progress of the Lake County case,” Grothe said Thursday. “However, it does add another level of complexity in scheduling and coordinating appearances. We expect both cases to go forward at the normal pace, but some minor delays may be possible due to scheduling.”

According to the federal indictment, some of the defendants – including Johnson – hold leadership positions in, and are members of the Hells Angels Motorcycle Club.

In addition to allegations of conspiracy to commit financial institution fraud and wire fraud, the federal indictment alleges that Johnson, along with Jacob Moynihan, Gerald Moynihan, Greco, Foakes, Maclean, Mays and Batemon also committed money laundering, conspiracy to maintain drug-involved premises and possession with intent to distribute a controlled substance between 2006 and 2007 in the greater San Francisco Bay area.

One of the primary defendants in the federal case, Jacob Moynihan, was a loan officer in San Francisco. Jacob Moynihan owned Xanadu Global Investment LLC and, during the relevant timeframe, worked at Universal Mortgage and Sales Inc., Onyx Capital Property and Investment Inc., and Accelerated Funding and Realty Inc.

The indictment alleges that the defendants conspired with one another and others to procure a series of fraudulent mortgage loans and refinancing loans for pieces of real property in and around the Bay Area, including San Francisco, Sonoma, Petaluma, Healdsburg and Santa Rosa.

The FBI and US Attorney's Office reported that the scheme initially involved recruiting straw buyers to obtain mortgage loans in exchange for money.

The scheme allegedly was accomplished by generating falsified bank statements, fictitious employment history and false income information for client-borrowers.

In many cases, bank statements were physically altered to reflect inflated balances and deposit activity. These falsified documents were then submitted to mortgage lenders to obtain mortgage loans, some in excess of $1 million, on terms that the lenders would otherwise not have funded. The properties underlying those loans were subsequently foreclosed upon.

The total amount of fraudulent loans was in excess of $10 million, according to the indictment.

Kathryn Haun is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Sutton Peirce. Special Assistant U.S. Attorney Arvon Pereet is assisting with the asset forfeiture aspects of the case.

The prosecution is the result of a multi-year investigation by the Internal Revenue Service Criminal Investigations Division and the Federal Bureau of Investigation’s Santa Rosa Resident Agency.

The Mendocino County Sheriff’s Office has assisted with portions of the narcotics aspects of the case.

The maximum statutory penalty for each count of conspiracy to commit financial institution fraud and wire fraud – and for each substantive count of financial institution fraud – is 30 years in prison and a fine of $1 million or twice the loss. The maximum statutory penalty for each count of wire fraud is 20 years in prison and a fine of $250,000 or twice the loss.

If convicted the defendants could face a maximum 10-year sentence for each count of money laundering, as well as a fine of $250,000 or twice the loss; up to 20 years in prison and a fine of $500,000 for each count of conspiracy to maintain a drug-involved premise; and a minimum of five years in prison and a maximum of 40 years in prison and a $5 million fine for possession with intent to distribute 100 or more marijuana plants. Restitution may be ordered for any count.

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090111 Josh Johnson Federal Indictment

Hanexaysana Rattanavong, 35, of Middletown, Calif., was arrested on Tuesday, September 27, 2011, for vehicle theft, elder abuse and possession of stolen property. Lake County Jail photo.

CLEARLAKE, Calif. – The Clearlake Police Department has arrested a Middletown man on vehicle theft and elder abuse charges in connection with an August case.

Hanexaysana Rattanavong, 35, was arrested on Tuesday, Sept. 27, according to a report from Sgt. Martin Snyder.

On Aug. 23 Sgt. Rodd Joseph was dispatched to a report of a stolen motorcycle in the 15000 block of 33rd Avenue in Clearlake, Snyder said.

The victim reported that the suspect, who was only identified as “Hon,” asked to take a test ride on a 2001 Kawasaki motorcycle which the owner agreed to let him do, according to Snyder.

The suspect rode the motorcycle away and did not return to pay for the motorcycle in question, Snyder said. At that time “Hon” had not been identified.

During the investigation Joseph, with the victim's assistance, was able to identify “Hon” as Hanexaysana Rattanavong of Middletown, Snyder said.

He said the Outlook newspaper contacted Joseph and requested information regarding the theft which the publication later printed.

Over several days following the article's publication, several people contacted the Clearlake Police Department and reported that they were victims of various alleged crimes by Rattanavong. Snyder said the reporting parties did not wish to make police reports regarding the separate crimes but relayed information regarding the whereabouts of Rattanvong.

On Tuesday, Sept. 27, Rattanavong contacted Sgt. Rodd Joseph at the Clearlake Police Department, stating there was a misunderstanding and the property would be returned to the victim, according to Snyder's report.

The alleged victim later contacted the Clearlake Police Department and reported Rattanavong was on his property attempting to return the motorcycle, Snyder said.

Snyder said officers responded to the scene and Rattanavong was taken into custody for vehicle theft, elder abuse and possession of stolen property. Rattanavong was transported and booked into the Lake County Jail.

Jail records indicated he later posted his $10,000 bail and was released.

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Firefighters work on a home at 3040 Edgewood Drive in Kelseyville, Calif., which caught on fire on Monday, September 26, 2011. Photo by Gary McAuley.

KELSEYVILLE, Calif. – A Monday afternoon fire damaged a home in the Kelseyville.

The fire was reported at about 1:45 p.m. at 3040 Edgewood Drive, according to reports from the scene.

Due to the steep terrain – the large two-story home is located on a hillside – and the fact that several others homes were close by, two local fire agencies and Cal Fire all converged at the scene with resources.

Kelseyville Fire sent two engines and one chief; Lakeport Fire sent an engine and a medic unit; and Cal Fire sent two battalion chiefs, three planes, one helicopter and one Konocti Conservation hand crew.

Reports from the scene indicated that most of the fire's damage was contained to the front portion of the home's upper story.

Units were being released from the scene shortly after 2:30 p.m., according to radio traffic.

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A preliminary hearing began on Wednesday, September 28, 2011, for (from left) Paul Braden, Orlando Lopez and Kevin Stone, who are accused of taking part part in a shooting in Clearlake, Calif., on Saturday, June 18, 2011, that left a 4-year-old boy dead and five others wounded. Lake County Jail photos.

 CLEARLAKE, Calif. – The events that culminated in a June shooting that left a child dead and several people wounded were explored in the first day of a preliminary hearing for three local men that got under way on Wednesday.

Orlando Joseph Lopez, 23, and Paul William Braden, 21, of Clearlake Oaks and Kevin Ray Stone, 29, of Clearlake sat in the jury box throughout the first day of their preliminary hearing, set to continue for several more days.

The three men are facing charges of murder, mayhem, and numerous counts of attempted murder and assault with a deadly weapon, along with special allegations for use of firearms and great bodily injury for a late night shooting on June 18 that killed 4-year-old Skyler Rapp and wounded the child's mother, Desiree Kirby; her boyfriend, Ross Sparks, and his brother, Andrew Sparks; and friends Ian Griffith and Joseph Armijo.

Security in the courtroom was heightened on Wednesday. In addition to two correctional officers and the bailiff, a sheriff's sergeant and two deputies oversaw the proceedings as about a dozen friends and family members of the victims filtered in and out to watch the testimony.

During a brief meeting in Judge Stephen Hedstrom's chambers before the hearing started, District Attorney Don Anderson and defense attorneys Stephen Carter, Doug Rhoades and Komnith Moth – representing Lopez, Braden and Stone, respectively – settled on an estimate of five days of preliminary hearing, Hedstrom said afterward.

A total of 21 witnesses will take the stand in the coming days, Hedstrom said once court convened.

In the first day of testimony, cousins Joshua Gamble and Ross Sparks were called to the stand, both of them describing tensions, threats and fights with members of a local gang which are believed to have contributed to the June 18 shooting, the worst in the city's history, according to police.

The bulk of the day's testimony came from 17-year-old Gamble, a Lower Lake High School student who often spent time at the home Ross Sparks and Kirby shared at 14034 Lakeshore Drive, where the shooting took place.

In more than three hours of testimony and cross-examination, Gamble described not just the night of the shooting but a fight that occurred when he and Armijo attended a friend's adult school graduation event at Lower Lake High School. The Konocti Unified School District calendar shows that the event took place on Thursday, June 9.

Gamble said he was taunted by a group called the “Ave. Boys,” named for the city's Avenues area, where the teens live.

“They made up their own gang or whatever” about a year ago, said Gamble, testifying during the day that the teens had had the name shaved into their hair at one point.

Wearing white shirts, red caps and blue jeans, the group followed Gamble and Armijo out of the graduation and attacked them. Lopez's brother, Leonardo, allegedly came up during the fight and hit Gamble in the head with a pipe.

Gamble said he was acquainted with Leonardo Lopez – who had dated his sister about three years previously – but said he didn't know him personally.

When cross-examined by Carter about his history with the Ave. Boys, Gamble said that he had a developmentally delayed cousin named Johnny who a member of the gang beat up about two years ago. Armijo was beaten up by the gang members the year before that, Gamble added.

On June 18 Gamble went over to hang out and play video games at Sparks' home, later walking down to Austin Park and heading back to the Lakeshore Drive home at around 6 p.m.

At the home that evening Ross Sparks and Desiree Kirby received a total of three threatening phone calls that upset them, said Gamble. At least one of the calls was attributed to Leonardo Lopez.

Over the course of the evening on June 18 about a dozen other people – including Sparks, Kirby and their two young children – were gathered at the home, where they had a barbecue. Gamble's sister, Amanda, roasted marshmallows to make Skyler s'mores.

Sparks' neighbor, Curtis Eeds, came over briefly to talk to him. A man nicknamed “Goofy,” who came from Eeds' home and who Gamble had never seen before, came and stood up against the fence for most of the evening. Gamble said he had wondered why the man stood off by himself.

During questioning, Anderson had Gamble draw the locations of the party's participants on a map of the homes. Gamble also described the fence – located between the apartments where the couple and their children lived and the home of Curtis Eeds – which had a large hole in it where boards were missing.

It was over and through that fence that several gunshots were fired that wounded the couple and their friends, and killed Skyler Rapp, according to Wednesday's testimony.

When he first heard the gunshots, Gamble said he thought it was a firecracker. “I heard a loud pop, like 'Pow!' Then I heard another one. And then I noticed what it really was,” he said.

Shortly afterward, everyone scattered, Gamble said.

Anderson asked him if he saw Skyler. Gamble said yes.

“Did you see Skyler fall?” Anderson asked.

“Yes,” said Gamble, choking up.

He said the child collapsed within seconds of the start of the shooting. One of the women at the home went to him and cradled him as he lay on the ground.

Gamble testified to hearing at least four gunshots, and seeing five muzzle blasts, the first from over the fence, the second from the area where the hole in the fence was located.

“It felt like hours but it was only minutes,” he said of the shooting.

A shrine set up for 4-year-old Skyler Rapp at a memorial for him in Clearlake, Calif., on June 22, 2011. Photo by Elizabeth Larson.

Exploring connections

Gamble said he saw a tall “lanky” figure – whose head and shoulders were visible – firing a handgun over the top of the fence with their right hand. The handgun's report sounded like “pap, pap, pap,” while the firearm shot through the fence had a lower, louder boom.

The only lighting came from porch lights – one in a neighbor's yard and the one from Sparks' home. Gamble said he could only see shadowy figures shooting at him and his friends.

He couldn't discern the subjects' skin tone or ethnicity, although he said the subject shooting over the fence – who may have been standing or sitting on a washing machine in the yard – had short hair.

“When the shots first started I was like a deer caught in the headlights. I didn't know what to do,” said Gamble.

One of the suspects then stepped through the hole in the fence, and Gamble said he believed at that point that the shooters were coming to get the group.

Gamble ran between a car parked nearby and the apartments, then jumped a side fence and ran down the street. He said he stopped about a block away in someone's yard when the gunshots stopped. He then ran back.

When he got back to the apartment, he found a horrible scene.

“My cousin Andrew was walking around with holes all through his legs and his arm,” said Gamble.

Kirby was lying in the doorway, and Armijo and Griffith were lying on the floor in the front room. Gamble said Ross Sparks was running around outside, saying his son had been shot, while bearing a gunshot wound near his hip.

“It was just a clean hole, straight through,” Gamble said of Sparks' wound.

During cross-examination, Moth pressed Gamble on whether he had been drinking beer that day with the others at the barbecue. He said no. Moth would also question Gamble closely about his use of marijuana that day, and whether or not it impaired him. Gamble said no.

Carter questioned Gamble closely about Eeds and “Goofy,” and their actions on the night of the shooting.

Gamble couldn't remember where Goofy – who had stood near the fence and away from the group during that night – was when the shooting started.

“You can't rule them out as the shooters, can you?” Carter asked of Eeds and Goofy, with Gamble saying he didn't know.

Carter also asked Gamble about statements to police on the night of the shooting, in which he stated he didn't think the fight at the graduation event and the shooting were related.

Gamble clarified that he stated to police, “I told them I didn't know.”

When Sparks took the stand at the end of the day, he told the court that he considered Skyler his child.

He said he knew Orlando Lopez, who had played football with Sparks' younger brother. Sparks also knew Braden, whose brother was a good friend of his in high school. Sparks said he also worked for Braden's father.

Sparks said he did not know Stone.

In the days before the shooting, Sparks said he spoke with Orlando Lopez at Eeds' home, where Sparks said he was doing laundry.

Sparks said he and Lopez had a discussion about Gamble's run-in with Leonardo Lopez and his friends at the high school.

He said Orlando Lopez told him not to worry about it, that he would handle it. “He was totally cool like he was my friend,” Sparks said.

Sparks said Lopez was at Eeds' home with a man named “Boxer,” who claimed that the Ave. Boys were his clique and “they get sh**” done.

“You will see,” Boxer told Sparks.

Days later Sparks said he received a text message, purportedly from Lopez, that said, “F*** your life.”

When the preliminary continues on Thursday – with additional testimony expected from Sparks – the attorneys and Hedstrom will discuss whether that text message is admissible or if it must be excluded due to hearsay evidence rules, an issue they went over at the end of Wednesday's proceedings.

The issue of the text message and whether it could be considered actually interrupted Sparks' testimony and resulted in Hedstrom asking him to step down from the stand and wait outside of the courtroom.

Hedstrom called it “a very important issue in this case.”

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Daniel Ray Loyd, 50, of Nice, Calif., is facing charges for the murder of 48-year-old Cindy Yvette Quiett of Upper Lake, Calif., on Tuesday, September 13, 2011. Lake County Jail photo.

LAKEPORT, Calif. – The continued arraignment of a Northshore man accused of killing an Upper Lake woman earlier this month had to be delayed on Monday due to conflicts of interest concerns among local defense attorneys.

Daniel Ray Loyd, 50, of Nice, returned to Lake County Superior Court on Monday, but for a second time did not enter a plea.

He's charged with the Sept. 13 shooting death in Lucerne of 48-year-old Cindy Yvette Quiett.

Charges the District Attorney's Office has filed against Loyd include murder, a special allegation of using a gun and a second special allegation alleging that Quiett's homicide occurred during the commission of a robbery; robbery and a special allegation of use of a firearm; assault with a firearm, with a special allegation of personally using a firearm; allegations of being a felon in possession of a firearm and a felon carrying a loaded firearm in public; being a felon in possession of ammunition; a misdemeanor charge of brandishing a firearm; and special allegations that Loyd had two prior state prison terms, which attach to all of the main counts in the case.

Last week, defense attorney Doug Rhoades was appointed Loyd's attorney, and had asked for additional time before entering a plea, as Lake County News has reported.

However, on Monday, “I and every other public defender had to declare a conflict,” Rhoades told Lake County News.

He said those numerous conflicts for local attorneys arose from the number of people listed either as victims or witnesses in the case, with all of the attorneys having had some contact with some of those individuals.

In Rhoades' place, Ukiah attorney Robert Boyd was appointed Loyd's defense counsel, Rhoades said.

Deputy District Attorney John DeChaine said Loyd's entry of plea was put over to 10 a.m. Tuesday, Oct. 11, in Lake County Superior Court's Department Three.

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Tulip Hill Winery's tasting room in Nice, Calif., will close on October 14, 2011. The property also is being sold. Courtesy photo.

NICE, Calif. – The award-winning Tulip Hill Winery has announced that it is closing its tasting room in Nice on Oct. 14.

The property, located at 4900 Bartlett Springs Road at Highway 20, is currently listed for sale as a state of the art winery production facility and will close on Dec. 31, the company said.

The changes in Nice will have no affect on the tasting room for Tulip Hill Winery at The River in Rancho Mirage.

Company officials said the sale of the production facility follows the sudden death of Tulip Hill’s founder, Robert H. “Budge” Brown, who died May 18 in a private aircraft accident.

Kristi Brown, daughter of Budge Brown and president of Tulip Hill Winery, will continue to oversee the development of the Tulip Hill brand with a renewed focus on the tasting room in Rancho Mirage, the Tulip Mania Wine Club and online sales.

“'We cannot know much about the future, except that it will bring some changes. We should be prepared to change, every day.’ I am not sure who said this, but it resonates with me today,” Kristi Brown said.

She said that prior to her father's death, the family made the decision to restructure its business in order to reduce costs. That restructuring includes closing the tasting room and winery production facility in Nice so that the company's wines could be made closer to its Mt. Oso Vineyard in Tracy.

“We have enjoyed being a part of such a close-knit group of vintners,” she said. “Obviously, this decision was extremely difficult as it means saying goodbye to an incredible team of employees and a wonderfully supportive Lake County community.”

The tasting room at The River in Rancho Mirage will become the primary location where Tulip Hill wines can be found, as well as through the Tulip Hill online store, and the Tulip Mania Wine Club.

Tulip Hill Winery is a family owned and operated wine company with its sole tasting room at The River in Rancho Mirage, featuring award-winning wines and daily tastings within a beautiful boutique setting “offering everything wonderful with wine.”

The goal of Tulip Hill Winery has always been to bring the best wines at the best possible prices to all wine enthusiasts.

For more information about Tulip Hill Winery, please visit www.tuliphillwinery.com or call 760-324-VINO (8466).

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Aaron Bassler, 35, of Fort Bragg, Calif., is seen here in a surveillance video early in September 2011 while he was allegedly burglarizing a vacation cabin in a remote part of Mendocino County, Calif. Bassler is believed to have burglarized several vacation homes, including one reported on Sunday, September 25, 2011. Bassler is wanted in connection with with the August 2011 murders of North Coast residents Matthew Coleman and Jere Melo. Photo courtesy Mendocino County Sheriff's Office.

MENDOCINO COUNTY, Calif. – The Mendocino County Sheriff's Office said it believes a man being sought for two August homicides was involved with a burglary reported on Sept. 25 near Willits.

For more than a month the Mendocino County Sheriff's Office and a force of allied agencies have sought 35-year-old Aaron James Bassler of Fort Bragg.

Bassler is wanted for the August murders of Fort Bragg Councilman Jere Melo and Mendocino Land Trust employee Matthew Coleman.

Earlier this week. Mendocino County Sheriff Tom Allman said the search is taking place in a 400-square-mile area along the North Coast near Fort Bragg.

On Sunday, Sept. 25, Mendocino County Sheriff's deputies were dispatched to a discovered burglary of a vacation cabin located in the 16000 block of NorthSpur Road, approximately 14.2 miles east of Fort Bragg and approximately 10 miles northwest of Willits along the Noyo River watershed, according to a Wednesday report.

Upon arrival at the scene deputies discovered the person responsible for the burglary had forced entry into the cabin and appeared to have taken food items. Officials said investigators are still attempting to obtain an inventory of the cabin's items from the owner who was not present at the scene.

Deputies collected various items from inside the cabin that were believed to be touched by the person who had committed the burglary, according to the report. Those items were forwarded to the Mendocino County Sheriff's Office Evidence Bureau for processing of latent prints, which resulted in the recovery of a latent print.

The recovered latent print was forwarded to the California Department of Justice laboratory in Sacramento for identification purposes.

On Wednesday afternoon a Department of Justice latent print criminalist contacted investigators and confirmed the recovered latent print was Bassler, the Mendocino Sheriff's Office said.

The NorthSpur Road area was the location of additional burglaries that Mendocino County Sheriff's detectives were sent to investigate on Sept. 20, the report said.

One full-time residence and at two vacation cabins located in the 17000 block of NorthSpur Road had allegedly been burglarized. The agency said detectives learned the structures were not occupied at the time of the burglaries, forced entry was used and food items had been taken.

It also was learned that a .22 caliber rifle and a 12-gauge shotgun had been taken during one of the burglaries. Detectives at this time believe Bassler to be responsible for those burglaries.

As a result of the preceding information the Mendocino County Sheriff's Office activated the reverse 911 system on Wednesday afternoon to warn the residents of NorthSpur of Bassler's presence.

The Mendocino County Sheriff's Office said the effort to apprehend Bassler continues with support from several local, state and federal law enforcement agencies.

The public is encouraged to be vigilant of their surroundings and to report any possible sighting of Bassler by calling the Command Post at 707-961-2479 or 911 under emergency situations.

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Last November, a case on behalf of Phyllis Wehlage, a resident of Evergreen Lakeport Healthcare, was filed against Evergreen California Healthcare and associated entities, including EmpRes Healthcare.

The case initially was filed in Sonoma County Superior Court – the corporation has a facility in Petaluma as well – and earlier this year the case was moved to the federal court's jurisdiction. A specific dollar amount in damages was not included in the filings.

Wehlage, who stayed at Evergreen Lakeport Healthcare in 2008, allegedly suffered “indignities and other harms” due to inadequate nurse staffing levels, the complaint stated.

In June federal court Judge Claudia Wilken ruled against EmpRes' and Evergreen's motion to have Wehlage's suit dismissed, clearing the way for the suit to become class action, according to court records.

However, earlier this month, following additional filings in the case, attorneys for EmpRes Healthcare filed a notice of mediation, which is supposed to commence in the case on Oct. 24.

Evergreen Lakeport Healthcare is a 99-bed skilled nursing facility for both long- and short-term needs, according to its Web site.

It's part of the larger, privately held Evergreen Healthcare Companies and EHC Management LLC, which are affiliates of EmpRes Healthcare, based in Vancouver, Wash. The corporation has skilled nursing and assisted living facilities across California, and in Idaho, Montana, Nevada, Oregon and Washington.

Messages left for Evergreen Healthcare's legal department and the lead attorney on the lawsuit were not returned.

Wehlage's attorneys, led by Michael Crowley, allege that the lawsuit is necessary because Evergreen Lakeport Healthcare is habitually understaffed.

The California Association of Health Facilities, a group representing an estimated 85 percent of California's nursing facilities, believes such litigation is damaging to the industry.

Mark Reagan, the association's attorney, called such lawsuits a “shakedown” of the industry.

Court documents explained that there was no response or long wait times for response to Wehlage's call light; she had lack of assistance for grooming and bathing; inadequate attention to toileting needs resulted in her sitting in a urine-soaked bed for hours; she suffered “rough and painful handling” by the facility's staff; and she was not assisted with eating or provided with the necessary fluids.

“All evils stem from understaffing, in my view,” Crowley told Lake County News.

Patricia McGinnis, executive director of California Advocates for Nursing Home Reform, agreed, arguing that most problems with health care quality in convalescent facilities are directly related to staffing.

“Understaffing is a chronic condition in California. There's no question about it,” said McGinnis, adding, “The problems that emanate from understaffing are huge.”

In addition, “We have a very, very poor enforcement system in California,” she said, noting that the system is “very provider oriented.”

McGinnis said there's an “easy answer” to these issues. “The state needs to go in and start doing enforcement and oversight.”

However, without that oversight, McGinnis believes that a lawsuit like that filed against Evergreen is the only remedy, as the state's complaint process is long and, in her view, often ineffective.

Reagan said the suits are in fact giving rise to problems for the industry. As one example, he said facilities looking for insurance are facing higher premiums because of the suits.

The association also argues that the state's licensed convalescent facilities are highly regulated and are meeting state and federal requirements for care.

In June Judge Wilken ruled there was a viable cause of action in Wehlage's case, and to address concerns the court had, Crowley and his team filed an amended complaint that named Evergreen's numerous other facilities as well as additional individual residents for the class action standing.

Crowley said the understaffing that is alleged in the case violates the Patients Bill of Rights, which includes the right to be in a facility that has sufficient staff to care for the needs of patients.

That bill of rights also lays out minimum state staffing requirements – including 3.2 nursing hours per day per patient – which the suit alleges Evergreen Lakeport violated.

McGinnis said convalescent facilities received an extra $1 billion in reimbursements between 2004 and 2008, but alleged that they still didn't meet state staffing requirements.

She said nursing home staff commonly are underpaid and have no health benefits, and as a consequence there is high turnover.

California Association of Health Facilities spokesperson Deborah Pacyna countered McGinnis' arguments on staffing levels, stating that the actual statewide staffing average is 3.6 hours per patient.

Pacyna said California convalescent facilities' hours of care surpass the the national average of 3.4 hours per day, and are beyond the statewide requirement of 3.2 hours per day per patient.

On June 29, Gov. Jerry Brown signed ABx1 19, which extended the Medi-Cal payment system for nursing homes until July 31, 2013, amounting to a Medi-Cal having to repay nursing homes about $400 million for a temporary rate cut, according to McGinnis.

McGinnis said her organization opposed the bill because it does not require facilities to use the money for staffing or care, and the system continues to lack meaningful accountability measures. She said those reimbursements should be used for patient care, not profits.

Reagan maintained that facilities are doing just what McGinnis said they should – providing greater care thanks to the government's reimbursement incentives.

According to the US government's Medicare site, www.medicare.gov, Evergreen Lakeport Healthcare is the lowest-ranked of three Lake County care facilities in Medicare's five star quality rating programs.

Evergreen's overall rating was one out of five stars, defined as “much below average.” It received one star for health inspections, two stars – “below average” – for staffing and three – “average” – for quality measures.

Inspectors found the facility had 13 health deficiencies – ranging from mistreatment, quality care, residents rights, nutrition and diet, pharmacy, environmental and administration – for the period of May 1, 2010, through July 31, 2011, two more than the average number of such deficiencies in California and eight more than the federal average.

A landmark case sets the stage

Crowley and law partner Tim Needham are “battle tested” in cases like Wehlage's. Crowley was lead trial counsel on a landmark class action case involving an estimated 32,000 plaintiffs versus Skilled Healthcare, a nursing home chain which owns 22 facilities, including all five of those located in Humboldt County.

In July 2010 a Humboldt County jury awarded the plaintiffs in the Skilled Healthcare case a $671 million verdict, the largest of its kind in the nation's history, following four and a half years of litigation and six and a half months at trial, Crowley said.

He called the Skilled Healthcare case a “perfect storm” in which he and his legal team were able to prove 1.3 million violations over a six-year period. The Humboldt County jury gave the plaintiffs in that case the maximum $500 penalty per violation.

The company later was allowed to settle for $50 million, which prevented it from going bankrupt, “which we were really not interested in doing,” Crowley said, adding they wanted the company “to function as a viable business that obeys the law.”

The court also issued an injunction in that case to ensure compliance, Crowley said.

“This is not unique to Skilled Healthcare,” said Crowley. “This is an industrywide practice,” and a practice that he said has become increasingly used despite laws like AB 1629, enacted to increase the size of medical reimbursements in order to increase staffing levels.

Rather than take that money and hire more staff, Crowley said such facilities are using it to increase profit margins – at the expense of patients.

The staff the facilities did have were paid “shockingly low” levels; in some cases, certified nursing assistants were not even paid minimum wage, he said.

The class action approach, Crowley said, is more effective, “because, quite frankly, we're dealing with corporations,” he said, adding, “They're not going to do the right thing because it's the right thing.”

A result of the verdict and injunction, said Crowley, was that every one of Skilled Healthcare's facilities began to aggressively hire certified nursing assistants, licensed vocational nurses and registered nurses.

“This hasn't been bad for business, this has been excellent for business,” he said, with more hires – and higher pay – set to result.

At first Skilled Healthcare's shares dropped, but they've since rebounded. “That company's in fine shape,” said Crowley, adding “We're not out to put anybody out of business,” but rather to change the industry's corporate culture.

In one way, the victory was hollow. “Most of our named clients died before trial,” said Crowley, with one woman surviving long enough to see the matter resolved.

Crowley argued that it was a victory for patients and a major wake up call for the industry.

However, the California Association of Health Facilities, has a markedly different view of such litigation.

Reagan said the group viewed the Skilled Healthcare award as “outlandish,” arguing that it was rendered by the jury without findings of patient suffering or harm.

“I think there was significant concern but certainly not panic under the circumstances,” Reagan said, in addressing the industry's reaction to the suit.

In the Skilled Healthcare suit, as in Evergreen Lakeport, Crowley alleged that the convalescent home industry has used understaffing as a business model.

In the Evergreen Healthcare suit, “there's very similar issues going on,” said Crowley.

“We think we can accomplish a social good with this,” Crowley said.

But Reagan and the California Association of Health Facilities don't share that opinion.

Reagan accused Crowley and his colleagues of being opportunists after having gotten “a very good result” in the Skilled Healthcare case.

There have been at least seven separate class actions brought by the same attorneys, said Reagan, trying to replicate an outcome that the association believes is not based on the facts.

In about half of those cases Reagan said the courts have dismissed the claims or limited them significantly.

Reagan believes that, ultimately, it will become “legally untenable” to carry out such awards against facilities.

E-mail Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it. . Follow Lake County News on Twitter at http://twitter.com/LakeCoNews, on Tumblr at www.lakeconews.tumblr.com, on Facebook at http://www.facebook.com/pages/Lake-County-News/143156775604?ref=mf and on YouTube at http://www.youtube.com/user/LakeCoNews .

November 2010 - Wehlage v. EmpRes Healthcare

Routine surveillance through mosquito testing showed the first positive evidence of West Nile Virus in samples collected in early through mid-September in locations near Kelseyville and east of Middletown.

An American crow in the Clearlake Oaks area on Sept. 15 has also tested positive for West Nile Virus.

Although approaching fall weather is associated with diminishing numbers of mosquitoes, Jamesina J. Scott, Ph.D., the District Manager and Research Director of the Lake County Vector Control District notes that “we are still seeing signs of mosquitoes capable of transmitting West Nile Virus.”

No human cases of West Nile Virus have been reported in Lake County this year, according to the Wednesday report.

Statewide, a total of 70 human cases have been reported from eighteen counties during 2011.

“Even though the West Nile season will soon be winding down, it is important to take precautions to avoid mosquito bites as long as there is any evidence that transmission of the infection is possible,” said Lake County Health Officer Dr. Karen Tait.

West Nile virus is transmitted by mosquitoes to a variety of animals and to humans. Mosquito and Vector Control agencies usually detect the virus in mosquitoes, birds and sometimes tree squirrels before human cases appear.

Most people who become infected with West Nile virus do not show symptoms and will recover uneventfully. Up to 20 percent of people will develop fever, headache, and other nonspecific symptoms that may last several weeks, health officials said.

Approximately one in 150 people will develop severe illness known as neuroinvasive disease. Health officials said people over age 50 and diabetics appear to be at most risk for the more severe forms of disease. There is no vaccine for humans.

Lake County residents are advised to avoid being outside when mosquitoes are active, especially near dusk and dawn; wear long sleeves and pants and use a mosquito repellent – always read and follow label directions – if they are outside when mosquitoes are active; and dump out buckets, wading pools and other sources of water where mosquitoes develop.

Call the Lake County Vector Control District at 707-263-4770 or visit the district's Web site at www.lcvcd.org to request assistance in addressing problems with mosquitoes.

To report a dead bird or squirrel, call 1-877-WNV-BIRD (1-877-968-2473) or visit the California Department of Public Health’s West Nile virus Web site at www.westnile.ca.gov.

For additional information on West Nile virus, visit http://www.westnile.ca.gov, http://www.cdc.gov/ncidod/dvbid/westnile/wnv_factsheet.htm and http://www.cdc.gov/ncidod/dvbid/westnile/RepellentUpdates.htm.

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The district's board of trustees unanimously ratified the agreement with the the California School Employees Association Chapter No. 638 at the board's Sept. 20 meeting, according to district Superintendent Dave McQueen.

The document, which also was ratified by the CSEA leadership, is for the period July 1, 2011, through June 30, 2014.

McQueen said the district was glad to have reached a conclusion on the negotiations.

Tiffany Kemp, the district's chief financial officer, said negotiations on the CSEA contract began in May 2010. Kemp added that all union contracts are for three-year terms.

CSEA Chapter President Holley Luia said the mediated agreement was reached when the district's unrepresented employees – including the superintendent, principals, confidential office employees, chief financial officer, counselors, classified management and the board of trustees – all agreed to cap themselves at the same benefit level as they asked the classified employees to take.

According to the document, benefits for full-time classified and unrepresented staff are capped at $16,000 per year.

Luia said that agreement most closely resembles a “fair share” and not the full share of the financial burden that she said classified workers had originally been asked to take.

Other points of the mediated agreement matters related to discipline, including putting a committee together to consider disciplinary issues, which McQueen called “pretty standard.”

Kelseyville Unified was put into “qualified” status by the state after concerns arose that it might not be able to meet its financial obligations, as Lake County News has previously reported.

That has led to hard financial decisions for the district, including layoffs and service cuts that the district board had to add to a financial recovery plan earlier this year. In all, the district identified nearly $2.3 million in cuts to keep fiscally sound.

Overall, classified staff workers have taken 21 layoffs, said Luia, although four and a half positions recently were restored thanks to additional, unanticipated state funding.

Even so, Luia – a secretary at Kelseyville High School who was among those who were hired back after layoff this summer – said the classified union remains concerned about the safety and well being of students on district campuses because of the cuts.

She said the cuts have resulted in inadequate custodial services, with three school campuses down to only one full-time secretary with a half-time secretary split between sites.

In addition, the district's transportation department has only four hours of clerical making it difficult for parents and school sites to get busing information, Luia said.

“CSEA is astutely aware of how the layoffs of such services hurt our kids and inconvenience our communities families and hope to make future restoration of laid off positions a priority for the district,” Luia said.

E-mail Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it. . Follow Lake County News on Twitter at http://twitter.com/LakeCoNews, on Tumblr at www.lakeconews.tumblr.com, on Facebook at http://www.facebook.com/pages/Lake-County-News/143156775604?ref=mf and on YouTube at http://www.youtube.com/user/LakeCoNews .

The Employment Development Department's latest report on California's employment numbers showed that Lake County had a 16.6 percent unemployment rate in August, down 0.9 percentage points over the month and 0.6 percentage points over the year.

California's unemployment rate in August was 12.1 percent, up from 12 percent in July but down from 12.4 percent in August 2010. The unemployment rate is derived from a federal survey of 5,500 California households.

The number of people unemployed in California was 2,175,000 – up by 8,000 over the month, but down by 83,000 compared with August of last year, the state reported.

The U.S. unemployment rate was unchanged in August at 9.1 percent, according to the US Bureau of Labor Statistics. The August 2010 national unemployment rate was 9.6 percent.

In August, Marin had a 7.8 percent unemployment rate, the state's lowest, and Imperial County had the highest statewide rate, 32.4 percent, according to the report.

Lake County's August rate ranked it No. 54 of the state's 58 counties, the Employment Development Department reported.

Lake's neighboring counties registered the following unemployment rates and statewide ranks: Glenn, 16.3 percent, No. 53; Colusa, 16 percent, No. 50; Yolo, 11.2 percent, No. 23; Mendocino, 10.7 percent, No. 16; Sonoma, 10 percent, No. 10; and Napa, 8.8 percent, No. 3.

Dennis Mullins of the Employment Development Department's North Coast Region Labor Market Information Division reported that Lake County industry employment increased 250 jobs between July and August.

Mullins said that increase is part of a usual trend as seasonal farm employment increased and schools begin rehiring for the new term.

He said that nine industry sectors gained jobs or were unchanged over the month, and two declined.

Job growth was noted in farm (+130); manufacturing (+10); trade, transportation and utilities (+10); private educational and health services (+10); and government (+100), according to Mullins.

He said industries with no change over the month included mining, logging and construction; information; financial activities; professional and business services.

Leisure and hospitality was down 20 jobs for August, and the “other services” category was down by 10 jobs, according to Mullins' report.

Mullins said government (-70), construction (-50) and financial activities (-20 and includes real estate) continue to lag over the year, accounting for over three-fourths of the county’s year-over job decline (-180).

Amongst Lake County's cities and Census designated places, in August Clearlake Oaks once again had the highest unemployment, 24.6 percent, followed by Nice, 24 percent; the city of Clearlake, 23.7 percent; Lucerne, 17.5 percent; Kelseyville, 16.9 percent; Middletown, 16.9 percent; city of Lakeport, 16 percent; Cobb, 14.8 percent; Lower Lake, 13.9 percent; Hidden Valley Lake, 13.7 percent; north Lakeport, 13.1 percent; and Upper Lake, 8.6 percent.

Lake County had a labor force of 25,120 people in August, with 4,170 of them jobless, based on the most recent state report. In July, records showed there were 24,980 people in the work force, with 4,360 of them out of work.

The Employment Development Department reported that there were 543,089 people in California receiving regular unemployment insurance benefits during the August survey week, compared with 566,380 last month and 620,844 last year.

New claims for unemployment insurance were 54,463 in August 2011, compared with 57,897 in July

and 65,261 in August of last year, the state reported.

State shows slight decrease in job numbers

Nonfarm jobs in California totaled 14,057,200 in August, a decrease of 8,400 jobs over the month, according to a survey of businesses that is larger and less variable statistically.

The Employment Development Department said the survey of 42,000 California businesses measures jobs in the economy. The year-over-year change – August 2010 to August 2011 – showed an increase of 171,100 jobs, up 1.2 percent.

The federal survey of households, done with a smaller sample than the survey of employers, showed a decrease in the number of employed people.

The state said that survey estimated the number of Californians holding jobs in August was 15,830,000, a decrease of 18,000 from July, and down 58,000 from the employment total in August of last year.

Five categories – mining and logging; manufacturing; trade, transportation and utilities; professional and business services; and leisure and hospitality – added jobs over the month, gaining 9,100 jobs, according to the Employment Development Department. Trade, transportation and utilities posted the largest increase over the month, adding 5,700 jobs.

Six categories – construction; information; financial activities; educational and health services; other services; and government – reported job declines over the month, down 17,500 jobs, the state said. Construction posted the largest decrease over the month, down 7,200 jobs.

In a year-over-year comparison, from August 2010 to August 2011, nonfarm payroll employment in California increased by 171,100 jobs, up 1.2 percent, according to the report.

The August report said that eight categories – mining and logging; construction; manufacturing; trade, transportation and utilities; information; professional and business services; educational and health services; and leisure and hospitality – posted job gains over the year, adding 209,200 jobs. Professional and business services posted the largest gain on a numerical basis, adding 57,700 jobs, up 2.8 percent.

Information posted the largest gain on a percentage basis, up by 5.6 percent, an increase of 24,100 jobs, according to the report.

Three categories – financial activities; other services; and government – posted job declines over the year, down 38,100 jobs, the state said.

The report showed that government posted the largest decline on both a numerical and percentage basis, down by 27,400 jobs, a decrease of 1.1 percent.

E-mail Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it. . Follow Lake County News on Twitter at http://twitter.com/LakeCoNews, on Tumblr at www.lakeconews.tumblr.com, on Facebook at http://www.facebook.com/pages/Lake-County-News/143156775604?ref=mf and on YouTube at http://www.youtube.com/user/LakeCoNews .