Menu Close

The former owner of a Long Beach hospital pleaded not guilty Monday to charges related to his admitted role in what authorities have called the largest medical fraud case in state history. Despite the plea, according to the report in the Press Telegram, Michael Drobot, former owner of Pacific Hospital, is expected to formally plead guilty at some point in the near future. Monday’s hearing in federal district court was Drobot’s first court appearance since the U.S. Attorney’s Office announced the charges against him in February. After Drobot entered his not guilty plea, seemingly for procedural reasons that were not explained at length during the brief arraignment hearing, Judge Douglas McCormick acknowledged the court’s expectation that a guilty plea would be recorded during a future hearing. “Everyone understands what happens next,” the judge said. The federal criminal case already contains a 35 page Plea Agreement signed by Dobrot and his attorneys on February 21.

The U.S. Attorney’s Office revealed in February that Drobot, who faces a 10-year prison sentence, has agreed to plead guilty to counts of conspiracy and payment of kickbacks for his activities in the scheme, which officials have said led to more than $500 million worth of fraudulent medical bills being filed. California’s worker’s compensation system ended up paying many of the fraudulent bills, according to officials. The case is also tied to an ongoing federal corruption case against state Sen. Ron Calderon, D-Montebello, and his brother, former Assemblyman Tom Calderon, who also held office while a member of the Democratic Party.

One of Drobot’s attorneys, Jeffrey H. Rutherford, said outside the courtroom that Drobot “has acknowledged and accepts responsibility for his actions. “He is providing information to assist the government in its expanding investigation,” Rutherford added. Drobot left the courtroom after entering his plea to be processed by the U.S. Marshals Service. McCormick allowed Drobot to remain free during the course of legal proceedings, subject to a $5,000 bond and an agreement not to travel outside California, Oregon, Texas, Michigan or Colorado without permission. His next court appearance was scheduled for May 27.

Drobot is accused of paying kickbacks between $10,000 to $15,000 to doctors and others who referred patients to Pacific Hospital in Long Beach for spinal surgeries, even though the patients often lived closer to other medical facilities where they could have received care, according to the U.S. Attorney’s Office. Drobot and co-conspirators paid for the kickbacks by taking advantage of a loophole in state law that allowed them to artificially raise the reimbursable costs of spinal hardware used in the surgeries, according to court documents. Drobot has told authorities that he bribed Sen. Calderon to enlist the lawmaker’s aid in keeping the loophole on the books. In February, Calderon pleaded not guilty to charges stemming from his alleged acceptance of bribes from Drobot and for another case in which he allegedly took money from an undercover FBI agent who posed as a filmmaker seeking a change in California’s film tax credit law. Tom Calderon has also pleaded not guilty to the charges stemming from his alleged role in aiding his brother’s alleged corruption.

Ron Calderon, along with state Sens. Leland Yee, D-San Francisco, and Roderick Wright, D-Inglewood, have been suspended from the Legislature. Yee is charged in a federal case that includes accusations of taking bribes and arms trafficking, while Wright has already been convicted of voter fraud and perjury and awaits sentencing. Wright was convicted of living in a district other than the one he was elected to represent during the 2008 campaign. Gov. Jerry Brown, a Democrat, has asked all three senators to resign,