The United States Attorney's Office

LOS ANGELES MAN WHO RECRUITED HOMELESS FROM ‘SKID ROW’ IN HEALTHCARE FRAUD SCHEME AGREES TO PLEAD GUILTY

A Los Angeles man who acted as a recruiter in a scheme to defraud Medicare and Medi-Cal by providing unnecessary health services to homeless people who were recruited from “Skid Row” has agreed to plead guilty to federal charges related to the scheme.

Estill Mitts, 64, who resides near the Miracle Mile section of Los Angeles, agreed to plead guilty in a plea agreement filed this afternoon in United States District Court in Los Angeles. Mitts has agreed to plead guilty to conspiracy to commit health care fraud, money laundering and tax evasion.

Mitts and a co-defendant, Dr. Rudra Sabaratnam, 64, of Brentwood, an owner and top executive of a hospital, were arrested earlier this month after being named in a 21-count indictment that accused both men of conspiring to recruit homeless people to receive unnecessary health services for the purpose of committing health care fraud.       From 2004 until October 2007, Mitts operated a facility on East Seventh Street in downtown Los Angeles commonly called the Assessment Center, which was also known as 7th Street Christian Day Center. Mitts employed individuals he called “stringers” to recruit homeless people with promises of small payments. According to Mitts’ plea agreement, the recruited homeless Medicare and Medi-Cal beneficiaries were referred to Sabaratnam’s hospital and two other hospitals to receive unnecessary medical treatments, or, in some case, no treatment at all. Sabaratnam and others associated with the other two hospitals paid Mitts illegal referral fees by writing checks to two Wilshire Boulevard companies Mitts had established, Metropolitan Healthcare LLC and Wilshire Healthcare Holdings LLC.

In relation to the tax evasion count, Mitts admits in the plea agreement that he failed to report more than $479,000 in income in 2005 and more than $620,000 in income in 2006.

Mitts is expected to enter his guilty pleas on September 10 before United States District Judge George H. King. The three charges to which he has agreed to plead guilty carry a statutory maximum penalty of 25 years in federal prison.

The indictment still pending against Sabaratnam charges him with conspiring to receive and pay kickbacks for patient referrals and to commit health care fraud, as well as eight counts of paying kickbacks for patient referrals, nine counts that carry a statutory maximum penalty of 50 years in federal prison. Sbaratnam is scheduled to go to trial before Judge King on September 30.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty.

The case against Sabaratnam and Mitts 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; the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse; and 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, emailing HHSTips@oig.hhs.gov.

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Release No. 08-121
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