Debra Wong Yang
United States Attorney
Central District of California
United States Courthouse
312 North Spring Street
Los Angeles, California 90012
September 19, 2005
Thom Mrozek (213) 894-6947
Two Plead Guilty to Federal Health Care Fraud Charges
Los Angeles, CA - As part of an ongoing law enforcement effort targeting "rent-a-patient" scams, four people have been charged with health care fraud for allegedly recruiting patients to undergo unnecessary medical procedures in exchange for money or other benefits.
This morning in federal court in Los Angeles, one of those defendants, Carlos Farias, 34, of Fontana, pleaded guilty to four counts of health care fraud. During the hearing before United States District Judge Percy Anderson, Farias admitted that he acted as a recruiter for doctors and outpatient surgery centers that offered medically unnecessary surgeries and surgical procedures and fraudulently billed private insurers.
Farias recruited individuals covered by private health insurance plans to undergo procedures that included Esophagogastroduodenscopy (EGD), colonoscopy and thoracic sympathectomy, which is commonly called "sweaty palm surgery." Those willing to undergo the unneeded procedures were paid $300 for EGDs and colonoscopies and up to $1,200 for sweaty palm surgery.
Like the others recently charged with health care fraud, Farias was accused of recruiting patients, instructing them to describe false and exaggerated symptoms and transporting the patients to the surgery center. The patients' descriptions of symptoms were used to create medical charts that were used to make the surgical procedures appear to be justified.
In a nine-month period that began in September 2002, Farias was involved in unnecessary procedures that led to at least $1.39 million in fraudulent bills being sent to insurance companies. The victimized insurers included Wellpoint Health Networks, Aetna Health, Blue Cross Blue Shield of Illinois and Blue Shield of California.
Farias is scheduled to be sentenced by United States District Judge John F. Walter on March 20, 2005.
Last week, another defendant pleaded guilty to three counts of health care fraud for engaging in illegal conduct similar to that of Farias. Huynhhoa Thi Bui, 53, of Garden Grove, pleaded guilty on September 12 before United States District Judge J. Spencer Letts.
Like Farias, Bui admitted working with doctors, other recruiters and patients to cause unnecessary procedures to be performed. The patients solicited by Bui received cash payments or, in some cases, discounted cosmetic surgery procedures in exchange for undergoing EGDs, colonoscopies, laparoscopies, sinus surgeries, hemorrhoidectomies and sweaty palm surgeries. Bui was paid up to $4,500 to deliver patients willing to undergo sweaty palm surgery, and over a nine-month period Bui was paid at least $150,000 by doctors and surgery centers.
The victim companies in the Bui case - Healthcare Management; Aetna Health; the Blue Cross Blue Shield companies of Illinois, Rhode Island and Michigan; Blue Shield of California; Benefit Planners; Orange Co. Foundation; Great West Life & Annuity; Cigna Health Care; United Health Care; and Humana - received fraudulent bills totaling at least $281,998.
Bui is scheduled to be sentenced by Judge Letts on January 30, 2006.
Two other people have been indicted by a federal grand jury in Los Angeles on charges related to their alleged roles as recruiters.
Danny O. Valle, 25, who formerly lived in Los Angeles and currently resides in Las Vegas, Nevada, is charged with seven counts of health care fraud. The indictment accuses Valle of causing insurance companies to be billed no less than $920,175 for unnecessary procedures. Valle has pleaded not guilty to the charges, and he is scheduled to go on trial October 18 before United States District Judge Audrey B. Collins.
The fourth defendant - Jon C. English, 34, a fugitive who formerly resided in Rialto - is charged with 12 counts of health care fraud. The indictment alleges that English recruited patients and caused more than $1.1 million in fraudulent claims to be submitted to insurance companies.
The charges contained in an indictment are only allegations. A defendant is presumed innocent unless and until he or she is proven guilty in a court of law.
Each count of health care fraud carries a maximum possible sentence of 10 years in federal prison.
These cases were investigated by the Federal Bureau of Investigation.
Release No. 05-133
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