BUENA PARK SURGERY CENTER OWNERS CHARGED WITH PAYING THOUSANDS OF HEALTHY PATIENTS TO UNDERGO UNNECESSARY SURGERIES AND BILKING MILLIONS BY FRAUD

OCDASeal

Orange County District Attorney

Press Release


Tony Rackauckas, District Attorney
401 Civic Center Drive West
Santa Ana, CA 92701

For Immediate Release
July 21st, 2004
Contact:

Mark Macaulay
OCDA
(714) 347-8405

Gary Gartner
DOI
(415) 533-2003

Santa Ana – A two-year investigation by the Orange County District Attorney’s Office with the assistance of the California Department of Insurance and the Franchise Tax Board led to the filing of charges against Unity Outpatient Surgery Center in Buena Park today.

WHO ARE INVOLVED?
Unity Outpatient Surgery Center owners Tam Vu Pham, 39, and his wife Hoang Ngo, 38, of Fullerton, along with Lan Nguyen, 48, of Huntington Beach, have been charged with 46 felony counts of conspiracy, grand theft, insurance fraud, capping and tax evasion. They are accused of recruiting thousands of healthy patients from all over the country to have unnecessary surgeries at Unity Outpatient Surgery Center in Buena Park and bilking more than $14 million from insurance companies and employers. If convicted Pham faces a maximum sentence of 26 years, Ngo faces a maximum sentence of 38 years 8 months and Nguyen faces a maximum sentence of 26 years 8 months in state prison.

METHOD OF OPERATION
Unity’s owners would pay “cappers” to recruit people from 45 states and the District of Columbia. These “cappers” targeted employees at businesses with PPO insurance because pre-approval from the insurance company is not a requirement. The “cappers” would arrange transportation for the “patients,” schedule the procedures, and instruct the “patients” on what to say. These healthy people would undergo multiple surgeries
during a short period of time.  

For their role in the insurance scam, the “patients” would receive either a cash payment, between $300 and $1,000, or earn credits toward inexpensive cosmetic surgery.  The “cappers” were paid a commission for each surgical procedure performed at Unity.
The most common procedures performed were colonoscopies, EGDs (upper gastro-intestinal procedure), sweaty palms surgery, hemorrhoid surgery and pain management procedures.

MESSAGES
“Even as health care fraud goes, it is hard to imagine anything more reprehensible than deliberately operating on healthy people solely to gain illegal profits.” said Orange County District Attorney Tony Rackauckas. “These  surgery center owners, driven by greed, are bilking insurers and employers out of millions of dollars.  Health care fraud victimizes each of us because it raises everyone’s health insurance rates.  The higher our health insurance rates are, the less our employers have to pay us.”
 
“This national medical fraud conspiracy is like a sequel to Invasion of the Body Snatchers,” said California Insurance Commissioner John Garamendi. “Hundreds of employers and insurers were defrauded out of hundreds of millions of dollars, directly picking the pockets of other law abiding policyholders. Throughout this illegal scheme surgeries for various ailments had one thing in common, insurance companies were billed an arm and a leg.”

LOSS/DAMAGES
During an eight month period from August 2002 to April 2003, Unity owners billed insurance companies close to $97 million and collected more than $14 million in fees. Unity is accused of defrauding hundreds of insurance companies and not paying taxes by creating a series of shell corporations with different addresses, tax ID’s and phone numbers, which they used to disguise their identities for billing.

At least 1600 employers had employees that were involved in the fraud and more than 5,000 patients are known to have had unnecessary surgeries at Unity Outpatient Surgery Center.

A REQUEST FOR PUBLIC’S HELP
A hotline has been set up for people who may have information on Unity or other surgery centers that are committing insurance fraud. You can reach the Orange County District Attorney’s office at 714-347-8760.