In the largest-ever health care fraud enforcement action by federal prosecutors, 14 defendants – including doctors, nurses and other licensed medical professionals – have been charged in the Central District of California for allegedly participating in health care fraud schemes that caused approximately $147 million in losses. The defendants charged locally are among hundreds of people charged across the United States in cases that cumulatively allege approximately $1.3 billion in false billings.
The southern California cases allege health care fraud and kickback schemes involving compounded drugs, home health services, physical therapy, acupuncture, Medicare Part D prescription drugs, diagnostic sleep studies and hospice care.
The defendants charged locally include four physicians, including Dr. Jeffrey Olsen. The 57-year-old physician was indicted by a federal grand jury on 34 counts of illegally prescribing controlled drugs, including oxycodone, and one count of false statement on a DEA registration application. Olsen, a resident of Laguna Beach, allegedly sold prescriptions to addicts and drug dealers in exchange for fixed cash fees, without any medical basis for the prescriptions.
Investigators also claim Olsen sold hundreds of prescriptions to addicts in other states without ever seeing the “patients” for an in-person examination. Olsen allegedly told customers that, in exchange for exorbitant fees as high as $3,000, he would write prescriptions for whatever drug they wanted, and that he would never check whether they were actually taking the prescribed drugs or whether they were getting additional narcotic prescriptions from other doctors. Olsen allegedly sold more than 1.2 million pills of narcotics, which were almost entirely at maximum strength.
In another local case involving a physician, Dr. Thomas S. Powers and Anthony Paduano were arrested. The indictment alleges that Powers, of Santa Ana, authorized prescriptions for compounded medications for patients he never examined. Under an agreement, Paduano, of Newport Beach, allegedly paid Powers $200 for each prescription. Paduano received approximately $1.2 million for referring the prescriptions to a local pharmacy that billed TRICARE more than $4.8 million.
Aniceto Baliton, of Diamond Bar, co-owner and managing employee of Bliss Hospice in Glendora, was charged with one count of conspiracy to pay and receive illegal remunerations for health care referrals. The charge stems from Baliton’s role in a fraud scheme to pay kickbacks in exchange for Medicare beneficiaries referred to Bliss and billed by Bliss for hospice services.
Aleksandr Suris and Maxim Sverdlov, co-owners and operators of Royal Care Pharmacy in Los Angeles, were arrested on charges related to a scheme that allegedly brought in more than $41.5 million from Medicare and CIGNA. The defendants allegedly submitted fraudulent bills for prescription drugs that were never filled by the pharmacy or were not provided to the person to whom the drug was prescribed.
Dr. Kanagasabai Kanakeswaran was indicted on one count of conspiracy to pay and receive kickbacks for health care referrals and four counts of receiving kickbacks for health care referrals. The charges arise from a kickback conspiracy at a home health company called Star Home Health Resources. The owners and operators of Star allegedly paid kickbacks to referring physicians, including Dr. Kanakeswaran, in exchange for the physicians referring Medicare beneficiaries to receive home health services from Star.
Jamen Oliver Griffith and Damon Glover were charged with conspiring to solicit, receive and pay illegal kickbacks for health care referrals. The charges stem from defendants’ role in a scheme involving undisclosed payments for generating and steering prescriptions of compounded drugs to Valley View Drugs, Inc., a pharmacy located in La Mirada.
Xiao “Kimi” Gudmundsen, a licensed acupuncturist and the owner of Healthy Life Acupuncture Center, Inc., which operated at two sites in Los Angeles and Riverside, was charged with eight counts of health care fraud and three counts of money laundering. The charges arise from allegations that Gudmundsen recruited Amtrak employees to visit Healthy Life and then, among other things, billed the Amtrak health care plan for acupuncture and other services that were not actually provided.
James Chen pleaded guilty on June 19 to a health care fraud charge related to his pharmacy processing and billing TRICARE for approximately $62 million for fraudulent prescriptions for compounded medications after Chen paid more than 50 percent in referral fees to marketers.
The U.S. Attorney for the Northern District of California reports that Christopher Owens M.D.was indicted with unlawfully prescribing oxycodone.
These names and entities should be carefully checked by SIU departments against inventories of workers’ compensation claims to determine if any of them have had illegal involvement in present or past claims.