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    United States Attorney's Office
    Central District of California

    Thom Mrozek
    Public Affairs Officer

    (213) 894-6947
    thom.mrozek@usdoj.gov



    Return to the 2009 Press Release Index
    Release No. 09-076

    June 16, 2009

    FORMER HOSPITAL EXECUTIVE PLEADS GUILTY TO PAYING KICKBACKS IN ‘SKID ROW’ HEALTHCARE FRAUD SCHEME

    The former co-owner and board chairman of City of Angels Medical Center pleaded guilty to paying illegal kickbacks for patient referrals in United States District Court in Los Angeles today.  Robert Bourseau, 74, who maintains residences in Rancho Mirage and downtown Los Angeles, admitted to paying illegal kickbacks as part of a scheme to defraud Medicare and Medi-Cal by recruiting homeless persons from Los Angeles’ Skid Row.

    Bourseau and Dante Nicholson, a former senior vice-president at City of Angels, were indicted in January by a federal grand in Los Angeles.  Also named in the indictment was Intercare Health Systems, Inc., the company through which Bourseau and his partner, Rudra Sabaratnam, operated City of Angels. The 12-count indictment alleges that Intercare, Bourseau, Nicholson and others conspired to recruit homeless people to receive unnecessary health services for the purpose of committing health care fraud.

    In pleading guilty, Bourseau admitted to participating in a scheme to pay Estill Mitts and others to refer homeless Medicare and Medi-Cal beneficiaries whom they recruited, primarily from Skid Row, to City of Angels for in-patient hospital stays.  City of Angels entered into sham contracts intended to conceal the illegal kickbacks paid to Mitts, and billed Medicare and Medi-Cal for in-patient services to the recruited homeless beneficiaries, including those for whom in-patient hospitalization was not medically necessary.

    This is the second indictment brought in the investigation into health care fraud related to Skid Row residents.  In December 2008, Sabaratnam, 64, pleaded guilty to paying illegal kickbacks for patient referrals (see: http://www.usdoj.gov/usao/cac/pressroom/pr2008/153.html). Sabaratnam’s co-defendant, Mitts, 64, of Los Angeles, who operated a center that recruited homeless people to receive unnecessary health services, pleaded guilty in September 2008 to conspiracy to commit health care fraud, money laundering, and tax evasion (see: http://www.usdoj.gov/usao/cac/pressroom/pr2008/121.html). In March 2009, Nicholson pleaded guilty to paying kickbacks for patient referrals (see: http://www.usdoj.gov/usao/cac/pressroom/pr2009/032.html).  Sabaratnum, Mitts, and Nicholson are all scheduled to be sentenced on August 17, 2009, by United States District Judge George H. King.

    The charges to which Bourseau has pleaded guilty carry a statutory maximum penalty of 10 years in federal prison.  Bourseau has agreed to pay over $4.1 million in restitution to Medicare and Medi-Cal.  United States District Judge George H. King ordered Bourseau to appear for sentencing on September 14, 2009.

    The case against Bourseau, Nicholson, and Intercare is part of an ongoing investigation being conducted by the U.S. Department of Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation; IRS-Criminal Investigation Division; the California Department of Justice Bureau of Medi-Cal Fraud and Elder Abuse; and the Health and Law Enforcement Team (HALT), a multi-agency task force which is operated by the Los Angeles County Health Department.

    Anyone with information that could assist the ongoing investigation is encouraged to contact investigators with the Department of Health and Human Services by calling 1-800-HHS-TIPS, or emailing HHSTips@oig.hhs.gov.

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    Release No. 09-076
    Return to the 2009 Press Release Index