DOCTOR CONVICTED OF PERFORMING UNNECESSARY SURGERIES ON HEALTHY PATIENTS IN $154 MILLION MEDICAL INSURANCE FRAUD SCHEME

Orange County District Attorney
Press Release


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

For Immediate Release
Case #08ZF0025






August 4, 2011

Susan Kang Schroeder
Chief of Staff
Office: 714-347-8408
Cell: 714-292-2718

Farrah Emami
Spokesperson
Office: 714-347-8405
Cell: 714-323-4486

DOCTOR CONVICTED OF PERFORMING UNNECESSARY SURGERIES ON HEALTHY PATIENTS IN $154 MILLION MEDICAL INSURANCE FRAUD SCHEME

 

SANTA ANA – A doctor charged in the largest medical fraud prosecution in the nation, the 19 co-defendant Unity Outpatient Surgery Center (Unity) scheme, was convicted today of performing unnecessary and dangerous surgeries on over 160 patients in order to fraudulently bill medical insurance companies. Michael Chan, 65, Cerritos, pleaded guilty to the court to 40 felony counts including conspiracy to commit insurance fraud, insurance fraud, aiding and abetting capping with white collar crime sentencing enhancements. He faces a sentence ranging from probation up to 28 years in state prison at his sentencing on a date that is to be determined.

 

Of the 19 defendants charged in the Unity case, 13 were indicted by a criminal grand jury on June 13, 2008. The Orange County Grand Jury examined 1,054 exhibits and heard testimony from 56 witnesses over 28 days, resulting in a 70-page indictment. The indicted defendants include an attorney, accountant, three doctors, and patient recruiters known as “cappers.”  The recruitment of patients, or “capping,” is illegal in California. 

 

In addition to Chan, two additional indicted defendants have been convicted and sentenced in this case. Doctor William Wilson Hampton, Jr., 55, Seal Beach, pleaded guilty May 8, 2009, to 47 felony counts including conspiracy, insurance fraud, and capping and was sentenced to 16 years in state prison.

 

Capper Sue Nanda, 43, Costa Mesa, pleaded guilty Feb. 20, 2009, to 22 felony counts including conspiracy, capping, grand theft, filing false tax returns, failing to file tax returns, and making false and fraudulent statements. She was sentenced Aug. 7, 2009, to 10 years in state prison and ordered to pay over $500,000 in restitution for personal and corporate back taxes. Capper Maria DeJesus Licea Rosales, 44, pleaded guilty Aug. 7, 2009, to 96 felony counts including conspiracy, capping, insurance fraud, grand theft, filing fraudulent tax returns, and sentencing enhancements for white collar crime and loss over $2.5 million. She was sentenced to eight years in state prison.

 

Six other defendants in the Unity case pleaded guilty prior to the indictment and have been sentenced. The remaining nine defendants are scheduled for a pre-trial hearing tomorrow, Friday, Aug. 5, 2011, at 8:30 a.m. in Department C-41, Central Justice Center, Santa Ana.

 

Unity was jointly investigation by the California Department of Insurance and Orange County District Attorney’s Office with assistance from the California Franchise Tax Board.

 

Senior Deputy District Attorneys William Overtoom and Deputy District Attorney George McFetridge of the Major Fraud Unit are prosecuting all of the defendants in this case.