Remarks by District Attorney Tony Rackauckas
Hoffman et al. indictment
June 13, 2011
Thank you for coming.
We are honored to have with us Insurance Commissioner Dave Jones. We are also joined in the audience by representatives from a number of insurance companies. Thank you for being here. On May 11, 2011, the grand jury returned a 181-page, 884-count indictment against doctors Sim Hoffman and Thomas Heric, medical center administrator Beverly Mitchell, and medical bill collector Louis Santillan.
Today is the first day the transcripts from those grand jury proceedings are available to the public. This case is a massive workers’ compensation insurance fraud scheme involving over $17 million in overbilling for unnecessary or never-performed procedures.
The mastermind of this medical mill is Dr. Sim Hoffman. Hoffman is a radiologist who owns the sleep and nerve testing centers. He is charged for using patients as props in order bilk the system by over-billing the insurance companies. Dr. Hoffman was disciplined in 2001 by the Medical Board of California for similar unethical medical practices.
Neurologist Thomas Heric was brought in by Hoffman to the sleep center to “study” the patients and write reports on their status. Heric’s so-called “studying” of patients involved using a made-up formula, entirely of his own creation, that is not recognized in any medical community. Every single report written by Heric? Cookie cutter reports on 1,247 patient files. Every patient? Diagnosed with a “disability,” yet not one of those patients every received treatment.
In 2008, Heric’s license was suspended for 60 days in 2008 for a felony federal Medicare and medi-cal fraud conviction. After Hoffman was disciplined in 2001, administrator Beverly Mitchell was brought in to act as Hoffman’s right hand. Instead of cleaning up his act, she helped him expand his businesses and is charged for personally processing and submitting the fraudulent billings.
Louis Santillan was hired as a bill payment collector. He has no college degree and no certification. He is charged with knowing that Hoffman was running a sham business and collecting $800,000 in commission from fraudulent obtained money over two years.
This particular scheme was two-fold. First – Hoffman’s sleep center, which operated under the pretense of diagnosing and treating patients with sleep disorders. To streamline the case, we sought an indictment on acts occurring for only a one-year period from 2007 to 2008. Hoffman is charged for billing for epilepsy and seizure testing on 1,247 patients without ever conducting these tests on a single patient.
During this time period, not a single patient ever received any treatment from the defendants for the supposed “disorders” Hoffman and Heric diagnosed. For this part of the mill involving processing 1,247 patients, Hoffman is accused of billing exactly $6,728 to the insurance company. This scheme resulted in over $8.4 million in fraudulent billings.