LOS ANGELES (CN) – The owner of a Los Angeles hospital ran a Medicare and Medi-Cal fraud scam with the owner of a homeless “Assessment Center,” promising to pay local homeless people to get unneeded medical treatments, according to a federal indictment unsealed after police arrested the two principal conspirators.
Rudra Sabaratnam, the hospital owner, ran the scam with Estill Mitts, who established assessment center in L.A.’s Skid Row area to carry out the scam, according to the indictment. Mitts hired “stringers,” who found homeless people to bring to the center, and then referred them to Sabaratnam’s hospital. Mitts also arranged for their transportation from the center to the hospital. A doctor would admit the homeless Medicare and Medi-Cal beneficiaries and submit unnecessary claims to the government with Sabaratnam’s approval.
Then Sabaratnam paid Mitts illegal referral fees through his two companies, Metropolitan Healthcare and Wilshire Healthcare Holdings. The indictment alleges that Mitts tried to hide the money by initiating phony consulting contracts with the hospital.
An assessment center co-conspirator is now working with the government.
Sabaratnam could face 50 years in federal prison, if he is convicted of conspiring to receive and pay patient referral kickbacks and conspiring to commit health care fraud. Mitts could get 140 years for the same charges, as well as money laundering and tax evasion. Mitts allegedly failed to report $479,000 in 2005 and $620,000 in 2006.