Medical fraud alleged conspirators back in California court
LOS ANGELES -- The Los Angeles District Attorney's Office outlined the roles 11 co-defendants allegedly played in the operation of a medical fraud scheme that prosecutors say netted defendants hundreds of millions of dollars, returning Kelly Soo Park back behind bars after she was acquitted in 2013 of murdering college student Juliana Redding.
Prosecutors describe a sprawling fraud scheme where 11 of the 15 defendants "billed hundreds of millions of dollars in fraudulent insurance claims that ranged from billing for services never provided to fraudulent surgeries."
Fraudulent billings, prosecutors say, that "continue today."
Prosecutors alleged more harmful activity than financial fraud.
"Each defendant is charged with violent felonies, aggravated mayhem," said Deputy District Attorney Dayan Mathai.
Last Tuesday, the Los Angeles District Attorney filed charges against 11 co-conspirators with a single conspiracy count, 32 counts of insurance fraud, three counts of illegal client referrals and 18 counts of aggravated mayhem, which involve disabling or disfiguring someone, among other charges. In a second related indictment four others were charged with conspiracy, money laundering and multiple counts of insurance fraud.
The prosecution set a bail schedule for each of the 11 defendants at close to or exceeding $20 million. The four defendants in the related indictment have bail ranging from $1 million to nearly $3 million. In Friday's hearing, defense attorneys argued for bail reduction calling the schedule "astronomical" and "unfair."
In a motion opposing the defense calls for bail reduction, prosecutors alleged those 11 defendants acted with "callous disregard and extreme indifference... shown to unsuspecting victims." These alleged acts included prescribing medications without medical necessity, "paying reluctant surgery candidates a nominal fee to be cut," changing medical records to justify unnecessary surgeries, and having patients cut and scarred by a physician's assistant in order "to increase billing possibilities."
Only 21 patients were presented in the indictment as victims, but in court DA Mathai suggested that there might be "hundreds or thousands" who experienced these surgeries. Mathai said, "I use air quotes around the word surgeries" implying as stated in his motion that these were unnecessary surgeries of no actual medical value or purpose.
At least 15 defense attorneys packed Judge Kathleen Kennedy's downtown Los Angeles courtroom for a bail hearing for the 15 alleged co-conspirators.
The courtroom was packed and bailiffs had to deny access to many in the overflowed courtroom. Bail bondsmen filled the aisles, among them the Beverly Hills bail bondsmen to rappers including Snoop Dog and Dr. Dre, and Josh Herman, who assisted Park with bail that sprung her for the murder trial.
There were many familiar faces, as friends, family and supporters of Park who attended her murder trial once again filled the courtroom, including advocates for the other 14 defendants. Park's husband Tom Chronister, a retired Oxnard Police Officer, and her sister, Kim Park, also a one-time employee of the mysterious Dr. Munir Uwaydah -- the accused ringleader of the fraud scheme -- were present among more than 20 supporters.
When Park entered the courtroom she was teary-eyed and looked over should to her supporters, smiling and making eye contact.
At one point Judge Kennedy mused that she had half the sheriff's department in her courtroom.
Park was acquitted in the 2008 murder of Redding, who was found strangled in her apartment in Santa Monica. Park's DNA was found inside the apartment and on the neck of the victim. The district attorney's bail motion made reference to the fact that Park's boss, Uwaydah -- a Lebanese doctor with a sprawling medical empire in Southern California -- fled to Lebanon as investigators were "looking into the fraudulent practices of (his businesses) as a possible link to the murder."
Those alleged fraudulent practices have now come front and center two years after the DA failed to win the murder conviction. In a response to the defense's request to reduce the multi-million dollar bail schedule, the prosecutors explained the nature of the fraud scheme and the roles of the 15 defendants, most notably Park and Uwaydah.
George Buehler, Park's attorney who also represented her for the murder acquittal, has also raised suspicions about this fraud case.
"I don't think that she is guilty in this case. It can't help but occur to me that the District Attorney's Office may have an interest in making her suffer because she was acquitted. So there may be some desire for payback," Buehler told CBS News last week.
However, the prosecution released detailed information about Park's connection to this fraud, identifying her as Uwaydah's "former office manager as well as personal assistant."
Mathai explained that, "Each of these defendants charged were feeding the engine of the fraud."
"Whether it was insurance billing, paying for patients, or money laundering. All were part and parcel of making money" for the alleged scheme, said Mathai.
This is the type of enterprise which former Los Angeles County District Attorney Steve Cooley has referred to as "non-traditional" organized crime.
"It's not La Cosa Nostra, instead it is organized criminals who are smart enough to take advantage of society's weaknesses," says Cooley.
"These kinds of frauds are rampant and thoroughly penetrate the American health care system," Cooley says. "Given the amount of money committed to health care in the United States, this is where the organized crime goes, it follows the money."
Prosecutors contend that in 2009, Uwaydah's fraud enterprise reached the stage that Uwaydah and other charged defendants including Park "conspired to take over a distressed bank... in order to facilitate the laundering of their criminal proceeds."
Prosecutors accuse Park of controlling fraudulent billing practices for Uwaydah's business empire, "placing her name on shell companies and shell bank accounts ... designed to hide Uwaydah's identity." They also allege she attended weekly meetings with Uwaydah and other associates to discuss "hiding assets from creditors, insurance companies and law enforcement."
In addition, prosecutors who once claimed Uwaydah called Park his "James Bond girl," alleged that Park "was actively investigating witnesses who were scheduled to testify against Uwaydah and she conspired to create false documents to destroy their credibility."
Explaining the multi-million dollar bail schedule Mathai said these defendants, by way of this fraud scheme, have "caused great harm to the community for the last ten years."
The defendants include Park's former boyfriend, race car driver Ronnie "The Rocket" Case, who used to race a car labeled "Frontline," the name of Uwaydah's medical corporation.
Case was initially arrested with Park in 2010 in connection to the murder but was released and never charged. He also was arrested last week and is charged in the fraud scheme. With regard to the fraud and mayhem charges, today's motion alleged that Case was a former billing manager for the medical enterprise, according to prosecution motions.
The motion explains that when Case was arrested in 2010, he "was driving away from his house with his truck filled with hundreds of prescription medications labeled for... patients."
The prosecutors' bail motion described Uwaydah as the ring leader of the fraud scheme. At one point in 2005, prosecutors said, Uwaydah and physician assistant Peter Nelson, an alleged co-conspirator, were confronted and admonished by the Chief of Staff at Tustin Hospital in Orange County for Nelson performing surgeries without Uwaydah present to oversee them. Charges stemming from these incidents led to Medical Board sanctions against Nelson and Uwaydah's medical license being cancelled in 2013.
Prosecutors allege that "in 2007 Uwaydah opened up his own surgery center .... where neither hospital administrators nor the Med Board would be aware of his activities."
Prosecutors said patients at this clinic were unaware that Uwaydah, by virtue of his ownership in the medical corporation and the surgery center, "had a financial interest in their surgery."
"Hundreds of patients were cut and scarred by these fraudulent practices... Between 2007 and 2010," according to the prosecutor's motion.
At one point, the prosecution presented documents alleging that even last Tuesday, the very same day the 15 defendants were arraigned in court, the medical conspiracy still continued to churn out fraudulent medical billings and services while the alleged conspirators were in custody.