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Debra Wong Yang
United States Attorney
Central District of California


United States Courthouse
312 North Spring Street
Los Angeles, California 90012
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PRESS RELEASE

FOR IMMEDIATE RELEASE
December 23, 2005
For Information, Contact Public Affairs
Thom Mrozek (213) 894-6947

DOCTOR AND BILLER CONVICTED IN MULTI-MILLION DOLLAR MEDICARE AND MEDI-CAL BILLING SCAM


Los Angeles, CA - A Southern California doctor and his biller have been convicted on federal charges of fraudulently billing government healthcare programs for more than $7.6 million for performing respiratory treatments on mentally ill people that were unnecessary, not performed in accordance with Medicare's rules, or not performed at all.

Aziz F. Awad, 43, of Pasadena, and Herman Thomas, 47, of Bellflower, were convicted Thursday afternoon by a federal jury in Santa Ana of 24 counts of health care fraud and four counts of money laundering. Awad operated an Anaheim medical practice, Active Care Medical Group. Thomas operated a billing company, HT Medical Billing Service, and A respiratory therapy company, Professional Respiratory Care Services, both of which were based in Bellflower.

Awad and Thomas were convicted by a jury that heard evidence for three weeks and returned its verdict Thursday after deliberating for only two hours.

The evidence presented at trial showed that Awad and Thomas engaged in a scheme that targeted mentally ill residents of board and care facilities throughout Southern California. Awad and Thomas paid kickbacks to marketers, as well as owners and administrators of board and care facilities, to gain access to the mentally ill residents. Awad ordered respiratory treatment for the residents, regardless of whether the residents had respiratory conditions. Respiratory therapists were paid to go out to the board and care facilities to perform daily or almost-daily respiratory treatments on the mentally ill residents. Thomas ordered the therapists to entice the residents with gifts, such as sodas, candy, donuts and even cigarettes. These respiratory treatments would take place without any doctor present, although Medicare requires that a doctor be present because of the potential danger of a reaction to the treatment. Further, the respiratory treatments were falsely billed as being performed at Awad's office or in a mobile medical van, because Medicare prohibited the treatments to be performed at board and care facilities.

Awad and Thomas submitted more than $7.6 million in claims to Medicare in connection with this respiratory treatment scheme. Awad and Thomas even submitted bills for dates the residents were in- or out-patients at hospitals and not at the board and care facilities to be treated. They also submitted approximately 2,200 claims worth almost $500,000 for dates Awad was out of the country. Medicare paid approximately $1.9 million and Medi-Cal paid more than $600,000 of the claims.

The investigation into Awad and Thomas began when the mother of a mentally ill Medicare beneficiary reviewed her son's Medicare statement and noticed that Medicare had been billed for more than 70 respiratory treatments at Awad's office, although her son did not have a respiratory condition and had no transportation to get to a doctor's office. The mother called Medicare's hotline number to complain. In its subsequent investigation, Medicare noticed the same type of daily or almost-daily billing for residents at many other board and care facilities throughout Southern California, even for dates the residents were in the hospital.

Both defendants are scheduled to be sentenced on March 13 by United States District Judge James V. Selna. Each faces a statutory maximum sentence of 10 years in federal prison for each count, although their actual sentenced will be determined by the judge.

The case was investigated by the Federal Bureau of Investigation and the United States Postal Inspection Service.

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Release No. 05-176

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