| For Immediate Release December 27, 2005 |
Contact: | Susan Kang Schroeder Deputy District Attorney (714) 347-8408 Office (714) 292-2718 Cell |
MEDICAL INSURANCE FRAUD SCHEME MASTERMINDS THAT BILKED $15MILLION IN BOGUS BILLINGS AND
SET TO COLLECT ANOTHER $81 MILLION PLEADS GUILTY
*Husband-wife and aunt team operated an illegal surgery center that engaged in large, dangerous medical practices of recruiting and operating on healthy people from all over the country
SANTA ANA – Tam Vu Pham, 41, of Fullerton, the mastermind of a medical insurance fraud scheme that generated $96 million in fraudulent billings while collecting $15 million in 2002/2003, pled guilty today to a variety of charges arising from the scheme. Vu’s formal sentencing is delayed till a future date when he will be sentenced to 13 years in state prison. Vu has agreed to cooperate fully with authorities by being truthful about what happened and who participated in this major fraudulent scheme. His wife, Huong Thien Ngo, 39, of Fullerton, pled guilty to charges arising from her role in the scheme. Ngo was sentenced to seven years in state prison with a stay of the commitment, if she successfully completes five years of supervised probation and serves 87 days in jail. Ngo’s aunt, Lan Nguyen, 49, of Huntington Beach, pled guilty and was sentenced to five years in state prison with a stay of the commitment, if she successfully completes five years of supervised probation and serves 224 days in jail.
Vu pled guilty to 16 felony counts including one count of conspiracy, eight counts of illegal capping and recruitment of patients, six counts of insurance fraud, one count of failure to file or make fraudulent tax returns, and one count of money laundering. Ngo pled guilty to four felony counts on each of the above charges. Nguyen pled guilty to the same first three counts as Ngo, minus money laundering. The remaining counts against the defendants were dismissed with an agreement to pay restitution to the victims on all counts.
Unity Outpatient Surgery Center operated under that name from June, 2002 to October, 2003. More than 5000 patients from all over the United States (45 states and the District of Columbia) came to Buena Park for the surgeries, recruited by marketers or “cappers,” who were also paid commissions for patients recruited. Recruiting medical patients with commissions or by using recruiters who receive commissions is illegal in California. These “cappers” targeted employees at businesses with PPO insurance because preapproval from the insurance company is not a requirement. More than 1600 employers had employees involved in this scheme.
The “cappers” would arrange transportation for the “patients,” schedule the procedures, and coach the “patients” on what to say. The “cappers” were paid a commission for each surgical procedure performed at Unity. One of the “cappers” was paid $1.7 million.