Why was Attorney Philip Ganong jailed?

In November 2023, an Orange County court jailed attorney Philip Ganong for a maximum of two years.

Attorney Philip Ganong pleaded no contest to one count of conspiracy to file a false or fraudulent insurance claim and nine more felony counts of actually submitting such claims.

In this article, I discuss the background and details of the criminal charge that made attorney Philip Ganong imprisoned by the court.

Why was Attorney Philip Ganong jailed?

Why was Attorney Philip Ganong jailed?

According to court documents, Mr. Philip Ganong and his wife were the main suspects of insurance fraud.

Background of the case

Between January 2008 and December 2016, Philip Ganong, his Wife -Pamela Mae Ganong, and his son – William Ganong owned several sober living across Bakersfield and Los Angeles as well as Orange and San Diego Counties.

The family of Philip Ganong registered these sober living homes under the business name “William Mae Company”, which was a front for a company by the name “Compass Rose Recovery.”

In addition to the homes, attorney Philip Ganong and his wife also owned a medical testing laboratory called Ghostline Labs.

Furthermore, the family of Ganong also launched a temporary Labor Agency known as the Compass Rose Staffing.

Through this agency, the family business employed 12 residents of the sober living homes and others. The company would require these employees to frequently turn in urine drug tests.

On top of fraudulently listing its residents as employees, the family would offer them free rent as a kickback for the urine specimen.

Collectively, the prosecution had accused Compass Rose Staffing of sending Ghostline Labs bills for these urine drug tests. Not to mention that Ghostline Labs did not have the necessary certification to perform urine tests and they ended up going to other laboratories.

Cumulatively, the couple and their son were able to raise $15 million through unnecessarily billing insurers for urine tests.

According to a news release from the Orange County DA’s office, the couple’s businesses had received this money from the health insurance companies that had contracted.

According to the Orange County District Attorney’s Office, as a way for Ghostline Labs to avoid detection, four different medical insurers received these high bills for drug tests.

Philip Ganong’s Insurance Fraud Charge

In 2017, seasoned attorney Philip Ganong, his wife, his son, and others were conspiracy to file false or fraudulent insurance claims and several felony counts of actually submitting such claims.

Collectively, the Orange County DA’s office charged attorney Philip Ganong and Pamela Mae Ganon with 13 counts of insurance fraud and 26 counts of money laundering.

Evidence to the court from the prosecution team stated that the couple’s staffing company allegedly provided minimal financial compensation to its enrollees. i.e., the labor agency gave free rent to its enrollees as a kickback for the urine samples.

In addition, the prosecution also accused Ghostline Labs of not collecting medical co-payments or deductibles for urine tests.

After serious deliberation, Philip Ganong issued a “no contest plea” to felony conspiracy and insurance fraud charges.

Consequently, attorney Philip Ganong accepted a plea deal from Orange County Superior Court Judge Joy Markman.

In addition to the 2-year jail time, Judge Joy Markman also ordered attorney Philip Ganong to pay $12.5 million in restitution.

Mr Ganong’s son, William, who was part of this conspiracy, had died in a Bakersfield house fire in 2019.

Why did Philip Ganong accept to be Jailed?

Accordingly, Attorney Philip Ganong distances and separates his illustrious 44-year legal practice in Bakersfield from the charges.

However, he expects the “no contest plea” will cost him his license due to expected disciplinary action by the State Bar of California.

According to Mr. Ganong, he decided not to go on with his plan to present compelling evidence supporting his lack of knowledge of the conduct of others he trusted.

This is because he believed that had he lost the case, then he would have incurred extreme penalties that included more than 47 years in state prison.

According to the Orange County DA’s office, the crime that attorney Ganong was charged with attracts 47 years and eight months of jail time in a state prison.


According to the court, attorney Philip Ganong who owned sober-living homes for recovering addicts, used the addicts as fake employees for a temporary staffing agency, then required those employees to have frequent drug tests.

Additionally, the seasoned attorney had also opened a laboratory to conduct the tests which he billed to insurance carriers.

He also managed to change insurance carriers four times to avoid detection.

In total, he fraudulently billed $22 million to insurance companies and managed to collect $15 million.