Federal officials are charging 601 people in the largest bust of health care fraud in U.S. history. Southern California criminal cases named a total of 33 defendants. Nine new defendants being charged as part of Operation “Spinal Cap.” The scheme was spearheaded by Michael Drobot, the former owner of Pacific Hospital in Long Beach.
In the cases announced in Operation Spinal Cap Daniel Capen, 68, of Manhattan Beach, an orthopedic surgeon, has agreed to plead guilty to conspiracy and illegal kickback charges. Capen accounted for approximately $142 million of Pacific Hospital’s claims to insurers, on which the hospital was paid approximately $56 million.
Timothy Hunt, 53, of Palos Verdes Estates, another orthopedic surgeon who referred spinal surgery patients to Capen and other doctors, has agreed to plead guilty to a conspiracy charge involving his receipt of illegal kickbacks stemming from various financial relationships with Pacific Hospital and related entities.
George William Hammer, 65, of Palm Desert, the former chief financial officer of the physician management arm of Pacific Hospital, has agreed to plead guilty to tax charges based on the fraudulent classification of illegal kickbacks in hospital-related corporate tax filings.
Lauren Papa, 52, of Tarzana, a chiropractor, has agreed to plead guilty to a conspiracy charge involving her receipt of illegal kickbacks to refer patients to a neurosurgeon with the understanding that the neurosurgeon would perform the surgeries at Pacific Hospital.
Tiffany Rogers, 53, of Palos Verdes Estates, an orthopedic surgeon, was named in an indictment unsealed Wednesday in connection with receiving illegal kickbacks to refer patients for spinal surgeries at Pacific Hospital.
Brian Carrico, 64, of Redondo Beach, a chiropractor – along with Performance Medical & Rehab Center, Inc., which was partially owned by Carrico; and One Accord Management, Inc., which Carrico wholly owned – were charged in connection with the receipt of illegal kickbacks to influence the referral of patients to Pacific Hospital. An indictment unsealed Wednesday alleges that these defendants and other co-conspirators were responsible for approximately $80 million in claims submitted to the federal workers’ compensation program and were paid approximately $56 million in connection with patients that Performance Medical referred to Pacific Hospital.
William Parker, 64, of Redondo Beach, was charged in a separate indictment unsealed on Wednesday in connection with the same kickback scheme involving Carrico and his companies.
In San Diego, the cases include Marco Antonio Chavez, a licensed medical doctor specializing in psychiatry, was charged with 30 counts of health care fraud in connection with over $928,000 in bills he submitted to TRICARE for services he never provided. He was also charged with five counts of aggravated identity theft and one count of obstruction of a federal audit..
Four defendants, including two chiropractors, a physical therapist and an acupuncturist, were charged with conspiracy to commit health care fraud and honest services fraud and to pay unlawful kickbacks stemming from their operation of R.I.S.E. Medical Center. According to the indictment, R.I.S.E. operated several “Wellness Centers” in San Diego County, including Bonita and Oceanside, and offering a range of services including physical therapy, diagnostic tests, massages, chiropractic treatments, and acupuncture..
Joserodel Zavala Candelario, a chiropractor and owner of R.I.S.E., imposed quotas for non-reimbursable services and treatments, allegedly telling staff that they were expected to provide a certain number of diagnostic tests, “no matter what”; to “grab patients in lobbies to put into provider schedules”; and to ply patients with complimentary treatments so R.I.S.E. could continue to fraudulently bill TRICARE and Medicare.
In addition, Candelario was also charged with paying a patient recruiter over $18,000 to refer TRICARE patients to the R.I.S.E. clinic. The recruiter, Mariam Reyes, was charged separately with conspiring to solicit and receive kickbacks.
In a separate indictment, Candelario was charged with participating in a scheme to defraud California Workers’ Compensation insurers and R.I.S.E. patients by receiving illegal kickbacks and bribes to refer patients to certain providers. According to the indictment, Candelario paid kickbacks to his co-schemers through a front company in exchange for referrals of Workers’ Compensation patients, and then concealed these kickbacks through sham “marketing” agreements.
One of Candelario’s co-schemers, Boris Dadiomov, was charged separately for his role in the fraudulent conspiracy. As a result of their unlawful cross-referral kickback scheme, Candelario and the other schemers received over 500 illegal patient referrals and submitted over $6.6 million in false billings to insurance companies.