| For Immediate Release August 15, 2006 |
Contact: | Susan Schroeder Public Affairs Counsel (714) 347-8408 Office (714) 323-4486 Cell |
TWO CLINIC ADMINISTRATORS ARRESTED AND CHARGED IN MULTI-MILLION DOLLAR MEDICAL INSURANCE FRAUD CASE
*THREE OTHER MEDICAL CLINIC OWNERS HAVE PREVIOUSLY ENTERED PLEAS;
SEVEN OTHERS ARE SCHEDULED FOR PRE-TRIAL AND PRELIMINARY HEARINGS
LAS VEGAS/ EL SEGUNDO – Two clinic administrators were arrested this morning on charges that they illegally participated in a scheme that recruited healthy people from all over the country to receive unnecessary surgeries in exchange for money or low cost cosmetic surgery. Rosalinda Landon, 60, and Dee Francis, 56, are accused of helping the Unity Outpatient Surgery Center in Buena Park generate more than $90 million in fraudulent medical billing in just eight months. They are both charged with 102 counts of conspiracy and insurance fraud. The recruitment of patients or “capping” is illegal in California. Insurance companies paid Unity more than $14 million during this time period. Landon was arrested in Las Vegas and will face and extradition hearing to be brought back to Orange County. She is being held in lieu of $4 million bail. Francis was arrested in Los Angeles and is being held in Orange County Jail on $1 million bail.
“These arrests show that we are closing in on the people involved in this sick scheme of putting healthy people at risk for a quick buck,” said District Attorney Tony Rackauckas. “We expect further arrests as the scope of the investigation broadens.”
OTHER DEFENDANTS
On December 27, 2005, the clinic administrators Tam Vu Pham, his wife Huong Thien Ngo, and her aunt Lan Thi Ngoc Nguyen pled guilty to multiple counts in the first case filed in this case and have agreed to be fully truthful in the investigation. The sentencing has been continued. Pham will receive 13 years in state prison, Ngo will receive a 7-year state prison sentence that will be suspended pending successful completion of 5 years of probation, and Nguyen will receive a 5-year state prison sentence that will be suspended pending successful completion of 5 years of probation. They will be required to pay restitution to all victims in the case.
Two brother and sister recruiters, Johnny and Thuy Huynh, are accused of having recruited over 200 patients from numerous states to undergo unnecessary surgeries for which they received a combined sum of more than $1,000,000 in commission from Unity. As a result of the surgeries performed on patients they recruited, insurance companies were billed over $8.8 million and paid out more than $2 million for fraudulent claims. They are scheduled for pre-trial on September 20, 2006.
Five cappers, Maria Rosales, Henry Truong, Olga Toscano, Pancha Keophimphone, and Sue Nanda were also arrested and charged in the case with insurance fraud, grand theft, and capping. They are scheduled to be in Orange County Superior Court on August 21, 2006 for their preliminary hearing. Their involvement is similar to that of the Huynh siblings.
BACKGROUND
The cappers targeted employees at businesses with PPO insurance because pre-approval from the insurance company would not be a requirement to the surgeries. More than 1600 employers had employees involved in this scheme. The cappers arranged transportation for the “patients,” scheduled the surgeries and coached them on what to say.
The “patients” would receive either a cash payment, usually between $300 and $1,000 per surgery, or would receive either free or discounted cosmetic surgery. They came from 45 states and the District of Columbia. The most common procedures performed were colonoscopies, EGDs (upper gastro-intestinal procedure), sweaty palms surgery, hemorrhoid surgery, and pain management procedures.
This case is believed to the largest prosecution of its kind in the nation by a District Attorney’s office. Deputy District Attorney Rick Welsh of the Economic Crimes Unit is prosecuting this case.
The Nevada Attorney General and the California Department of Insurance assisted in the coordination of the arrests. The California Franchise Tax Board also helped with the investigation.
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