Statements from District Attorney Tony Rackauckas – Updates on the Unity Medical Fraud Case

Statements from District Attorney Tony Rackauckas

Updates on the Unity Medical Fraud Case

June 27, 2008

 

Thank you all for coming.

We are honored to have with us:

*Insurance Commissioner Steve Poizner

*State Controller and Franchise Tax Board Chair John Chiang

*Board of Equalization Member representing our District and OCDA’s Korean American Advisory Commissioner member Michelle Steel

*California State Senator, Lou Correa. 

This morning, Orange County Superior Court Judge Tom Borris unsealed a 70-page indictment concluding the charging phase of the largest medical insurance fraud case in the nation’s history.  There are 19 defendants now charged in the Unity case. Of the originally charged 17 defendants, six have pleaded guilty and been sentenced. This indictment consolidates and joins the remaining 11 defendants. 

The investigation of this case started back in November 2001 with significant assistance from the Department of Insurance, the Franchise Tax Board under the State Controller and the Board of Equalization, and the California Medical Board. 

As you know, in cases where an indictment has been issued and the transcripts have not been released, we are prohibited by law from releasing information that was presented to the grand jury until the transcripts become available. 

Before we get to the facts already in the public domain, I would like to thank the members of the Grand Jury who are here with us today.  There are 16 of the 18 members present.  This Orange County Grand Jury heard evidence from 56 witnesses and examined 1,054 exhibits over 28 days.  They rolled up their sleeves and tackled a huge, complicated case involving multiple defendants and complex criminal charges.  Let’s give them a round of applause. 

Beginning March 4, 2008, the newest evidence in the Unity case was presented to the Orange County Grand Jury and concluded with a sealed indictment on June 13, 2008, against two new defendants and 11 previously charged defendants.  This consolidation will help streamline this case, save the taxpayers money and resources, and move it forward to trial. 

The defendants in the Unity case are accused of participating in a $154 million medical insurance fraud scheme that recruited 2,841 healthy people from all over the country to receive unnecessary and risky surgeries in exchange for money or low cost cosmetic surgeries. 

Patients came from all of the states marked in Orange.  We appreciate the great states of New Mexico and North Dakota for NOT sending us fake patients.

The recruitment of patients, or “capping,” is illegal in California.  Insurance companies paid out more than $20 million during a single 9-month period.  

The facts in this case represented greed in its worst form – people gambling with health in the name of cash.  Every surgery could be fatal and going under anesthesia is playing Russian roulette with a loaded gun. 

Here are some updates on the case, beginning with a