In June 2018, federal officials charged 601 people in the largest bust of health care fraud in U.S. history. The national takedown was across 58 federal districts.
Southern California criminal cases named a total of 33 defendants. Nine new defendants being charged as part of Operation “Spinal Cap.” The scheme that was spearheaded by Michael Drobot, the former owner of Pacific Hospital in Long Beach.
One of the high profile defendants in that Operation, Daniel Capen, 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.
Another was Timothy J. Hunt, of Palos Verdes Estates, also an orthopedic surgeon, who referred spinal surgery patients to Capen and other doctors. He 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.
In a sentencing memo filed by his attorneys this September, Hunt in his letter to the Court, said he was persuaded to accept what appeared to be an option contract to buy his practice at a time when he had no other option to hold onto his medical practice due to financial extortion by his late father’s 4th wife.
He claims “he was induced to participate in this arrangement by sophisticated parties, Tino Bernadett and Michael Drobot, the owners of Pacific Hospital, and their counsel, who assured Dr. Hunt that the arrangement was legal.”
“Bernadett and Drobot even gave Dr. Hunt a legal contract memorializing the option agreement that he took to his lawyer, who approved it (although the lawyer was not privy to all the details of the actual arrangement.)”
His attorneys conclude by saying that because “of these facts and circumstances, it is understandable – though not excusable – that Dr. Hunt got involved in something he should have realized was clearly illegal and deliberately turned a blind eye to the obvious problems with Bernadett’s and Drobot’s proposal.”
Subsequently, the court entered the following order: “it is the judgment of the Court that the defendant, Timothy James Hunt, is hereby committed on Count 1 of the 16-Count Indictment to the custody of the Bureau of Prisons for a term of twenty four (24) months.” Upon release he is to have supervised release for the term of three years. He is to report to the designated institution by November 12, 2019.
A deferred restitution hearing is set for December 20, 2019 at 11:30 a.m.