LOS ANGELES, Aug. 6, 2008
FBI Raids 3 LA Hospitals In Fraud Case
CEO Arrested, Agency Says Medical Centers Used Homeless In Scheme To Collect Gov't Insurance
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A lawsuit filed Wednesday by the city said the hospitals used homeless people as "human pawns."
More charges are expected, a federal prosecutor said.
The hospitals in Los Angeles and Orange counties submitted phony Medicare and Medi-Cal bills for hundreds, perhaps thousands, of homeless patients — including drug addicts and the mentally ill — recruited from downtown's Skid Row, authorities alleged.
The investigation was sparked in 2006 by a Los Angeles police investigation of reports that hospitals were dumping homeless patients on the streets.
The raids cap what law enforcement sources told The Los Angeles Times was a nearly two-year investigation of alleged medical fraud on skid row.
The city attorney's office alleged that the hospitals tried to fill empty beds in a bid to boost their finances.
The hospitals allegedly were aided by a patient recruiting operation on skid row that plucked homeless people from the streets and delivered them with fake medical conditions to the hospitals, according to the Times report.
Search warrants were served at City of Angels Medical Center, Los Angeles Metropolitan Medical Center and Tustin Hospital and Medical Center, the FBI said.
FBI agents arrested Rudra Sabaratnam, the CEO of City of Angels hospital, and Estill Mitts, operator of a Skid Row health assessment center, FBI spokeswoman Laura Eimiller said.
A 21-count indictment unsealed Wednesday charged both men with conspiring to receive and take kickbacks for patient referrals and to commit health care fraud. Sabaratnam also was charged with paying kickbacks and Mitts was charged with money laundering and tax evasion.
If convicted, Sabaratnam could face 50 years in federal prison, and Mitts could face 140 years, authorities said.
U.S. Attorney Thomas O'Brien said he expects additional charges in the case.
"This is one of several major medical fraud investigations that are ongoing," he said. "There's too much money being illegally stripped from public health care programs and the potential impact to those with a legitimate need is too great to let such fraud escape federal prosecution."
There were no residential phone listings in Los Angeles for Sabaratnam or Mitts.
Representatives of the hospitals did not immediately respond to calls seeking comment.
The city attorney's office said it filed a lawsuit against the corporate owners of the hospitals — along with Sabaratnam, several doctors and others — in connection with the alleged scheme.
"This is a rather large operation. They were receiving kickbacks up to $20,000 a month from some of these hospitals and they were delivering between 30 and 50 patients a month," said Frank Mateljan, a spokesman for the city attorney's office.
Mitts ran the 7th Street Assessment Center, which screens people for health needs and takes them to hospitals if necessary.
The lawsuit said the "patients" were picked up by recruiters who sent them to the 7th Street center, where they were given a phony diagnosis and forms were filled out justifying their eligibility for government medical programs.
Medi-Cal and Medicare would be billed for the ambulance and hospital stay, Mateljan said.
After their hospital stays, the homeless patients would be returned to Skid Row shelters, but "they would go back multiple times," he said.
In one case, the suit said, a mentally ill woman said she had been admitted to all three hospitals in the past four years, including at least six times to Los Angeles Metropolitan. The woman, identified only as "Recruit X," was diagnosed at the assessment center with conditions such as "shortness of breath" or "chest pains" that she never had, and was given little treatment, none of which was necessary, the complaint contended.
She frequently used the money she received for participating in the scheme to buy crack cocaine, the suit said.
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See all 26 CommentsPack and get out of USA if you hate Mexicans. Legal Mexican Americans will soon become the Majority in America because they love having sseexx - hence High Positive birth rate and thanks to the High Negative birth rate of the Anglo-Whites. Whites are extinguishing themselves without a fight. Whites should file for the Endanger Species Act.
Hospitals and medical doctors should be held in the highest regard. Just a few can tarnish the good.
What a waste of ink even saying that. Hospitals are no different than banks, oil companies, insurance companies, etc etc. Theyre all dirty. These just got caught.
Your argument against public health care is weak, and this article points that out, showing exactly the opposite of your claim. This is corruption of private health care organizations.
Posted by brianbwb at 09:53 PM : Aug 06, 2008
As usual, very well said Brian. I just love how the anti-socialist people point out the problems that univresal medicine would bring. And an artice like this pops up, pointing out the problems of the present system. The question I have is, "Why can''t people get the proper care or treatments today?"
What the hell is wrong with this system? (shakes head in disgust.)
Thats University of North Carolina Hospitals for those that do not know what UNC means.
This is *********. I am sure there is plenty of legit patients that does need treatment. Why don''t they treat them?
And they ''re pulling this *****.
In my opinion, doctors are despicable. They are greedy Mofo''s that could really care less about patients, and more about money. I have been saying this for 3 years now. And this article proves it.
The hospital staff is desperate to keep their livelyhood in tact.
AH! SOCIALISM...a breath of stale, unrealistic, restrictive air.
Posted by gop_forever at 03:26 PM : Aug 06, 2008
This looks more like the no bid contracts in Iraq...
I have read in other articles that some of these poor people were actually given OPERATIONS and procedures they did NOT need!!
Such NEEDLESS pain and suffering!
I hope they make these creeps PAY BACK every cent!
People steal from Medicaid because the government has be rendered weakened by RepugNaCons and their constant 30 year corporate arse-kiss make out session.
It is a problem all over the US, the hospitals in CA were only the ones caught this time, and has nothing to do with your jealousy of things Californian, your disagreement with its'' politicians, or your closet g*ayness.
To the anti health care posters, these are privately run hospitals abusing the government program, not the government program abusing itself.
Your argument against public health care is weak, and this article points that out, showing exactly the opposite of your claim. This is corruption of private health care organizations.
California is 18 BILLION dollars in the red, cannot pay its government employees and its people are busy ripping off all they can get. Oh, and their "go-getter" politicians like "do nothing" Pelosi and the quear mayor of Sanfrancisco who protects the criminals at the expense of the hard working families in his city. He seems to spend more time looking out for the quears and criminals than the law abiding God fearing taxpayers.
A bunch of real fine examples for the rest of the country....NOT!!!.
How ignorant of some here to allege republicans are the culprits .. Shows how idiotic some are ...
This is just a wake up call for the ALL American taxpayers who are BILKED out of BILLIONS because of the fraud that happens in EVERY government run program ..
And as others have said .. This is the WARNING of why the US Government should stay OUT of Healthcare ..
They cant manage the medicare program the way it is ... so pray tell why in the world would taxpayers want to give them MORE???????
PLEASE use your brains ...
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