SANTA ANA, Calif. (CN) - A Long Beach hospital CFO and two doctors were among those charged Tuesday with health care fraud that generated nearly $600 million in bogus billings, federal prosecutors said.
"Thousands of patients were referred to Pacific Hospital in Long Beach, where they underwent spinal surgeries that led to more than $580 million in bills being fraudulently submitted during the last eight years of the scheme alone," the U.S. Attorney in Los Angeles said in a statement Tuesday. The scam allegedly lasted for eight years.
The U.S. Attorney's Office provides this link to eight indictments in the case.
Two defendants already have pleaded guilty and three more agreed to do so, the U.S. attorney said. "All five have agreed to cooperate in the government's ongoing investigation into kickbacks for patient referrals and fraudulent bills for spinal surgeries."
In a second, similar scheme, also involving spinal surgeries, doctors too kickbacks for referring people to a hospital in Hawaii Gardens, prosecutors said.
According to the U.S. attorney:
James L. Canedo, 63, of San Pedro, former chief financial officer of Pacific Hospital of Long Beach, pleaded guilty on Sept. 4 to a criminal information charging him with conspiracy to commit mail fraud, honest services fraud, money laundering, paying or receiving kickbacks in a federal health care program, and violating the Travel Act: interstate travel in aid of a racketeering enterprise. Canedo's case was unsealed Monday by U.S. District Judge Josephine Staton, who will sentence him on June 17, 2016.
Dr. Philip Sobol, 61, of Studio City, an orthopedic surgeon, agreed to plead guilty to conspiracy to commit mail fraud, honest services fraud, and violations of the Travel Act, and a separate, substantive Travel Act violation. The information and Sobol's plea agreement were filed Tuesday.
Alan Ivar, 55, of Las Vegas, a chiropractor, formerly of San Juan Capistrano, who owned several businesses in Costa Mesa, was charged Tuesday in a criminal information with one count of conspiracy to commit mail fraud, honest services fraud, money laundering, and violations of the Travel Act. In a plea agreement also filed Tuesday, Ivar admitted that for more than a decade he had an agreement with the owner of Pacific Hospital to refer patients for a monthly retainer. Ivar agreed to plead guilty.
Paul Richard Randall, 56, of Orange, a health care marketer previously affiliated with Pacific Hospital and Tri-City Regional Medical Center in Hawaiian Gardens, pleaded guilty on April 16, 2012 to conspiracy to commit mail fraud. Randall, who admitted recruiting chiropractors and doctors to refer patients to Tri-City in exchange for kickbacks, will be sentenced on April 8, 2016.
Dr. Mitchell Cohen, 55, of Irvine, an orthopedic surgeon, was charged with filing a false tax return. Cohen admitted in a Nov. 16 plea agreement that he failed to report his kickbacks.
All five agreed to cooperate with the government in its archly named Operation Spinal Cap.
Sobol faces up to 10 years in federal prison; Canedo, Ivar and Randall to 5 years; and Cohen to three. All must pay restitution, which in Canedo's case will be at least $20 million, the U.S. attorney said.
The former CEO and owner of Pacific Hospital of Long Beach, Michael D. Drobot, pleaded guilty in April 2014 to participating in the scheme. He too is cooperating.
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