LA Hospital CEO Arrested in Health Care Scheme
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LOS ANGELES — A hospital top executive was arrested yesterday as federal agents raided three medical centers while investigating an alleged scheme to recruit homeless people as phony patients and bill government programs for millions of dollars in unnecessary health services, authorities said.
A lawsuit filed yesterday 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.
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 the CEO of City of Angels hospital, Rudra Sabaratnam, and the operator of a Skid Row health assessment center, Estill Mitts, an FBI spokeswoman, Laura Eimiller, said.
A 21-count indictment unsealed yesterday charged both men with conspiring to receive and take kickbacks for patient referrals and to commit health care fraud. Mr. Sabaratnam also was charged with paying kickbacks and Mr. Mitts was charged with money laundering and tax evasion.
If convicted, Mr. Sabaratnam could face 50 years in federal prison, and Mr. 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 Messrs. 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 Mr. 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,” a spokesman for the city attorney’s office, Frank Mateljan, said.