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Orange County District Attorney
Press Release
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Tony Rackauckas, District Attorney
401 Civic Center Drive West
Santa Ana, CA 92701
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For Immediate Release
Case # 08ZF0025
January 14, 2013
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Contacts:
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Susan Kang Schroeder
Chief of Staff
Office: 714-347-8408
Cell: 714-292-2718
Farrah Emami
Spokesperson
Office: 714-347-8405
Cell: 714-323-4486
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TWO ADMINISTRATORS SENTENCED FOR THEIR ROLES IN $154 MILLION MEDICAL INSURANCE FRAUD SCHEME
SANTA ANA Two administrators were convicted and sentenced for their roles in the largest medical fraud prosecution in the nation for recruiting thousands of healthy patients to undergo unnecessary and dangerous surgeries to fraudulently bill medical insurance companies.
Dee Francis, 63, a Unity administrator, pleaded guilty to the court Jan. 11, 2013, to two felony counts of conspiracy, eight felony counts of capping or paying for referrals, 30 felony counts of grand theft, 30 felony counts of insurance fraud, 30 felony counts of making false and fraudulent claims, one felony count of filing a false tax return, and white collar crime sentencing enhancements for taking over $2.5 million. Francis was sentenced to six years in state prison Jan. 11, 2013. The People advocated for a sentence of 55 years in state prison. The sentence will be served concurrent to the sentence he received Dec. 20, 2012, of six years in state prison and $905,507 restitution for a Nov. 26, 2012, conviction by a jury of one felony count of filing a false tax return and six felony counts of failing to file tax returns.
Rosalinda Rodriguez Landon, 67, a Unity administrator, pleaded guilty to the court Jan. 11, 2013, to two felony counts of conspiracy, eight felony counts of capping or paying for referrals, 30 felony counts of grand theft, 30 felony counts of insurance fraud, 30 felony counts of making false and fraudulent claims, one felony count of money laundering, and white collar crime sentencing enhancements for taking over $2.5 million. Landon was sentenced to five years and four months in state prison Jan. 11, 2013. The People advocated for a sentence of 55 years in state prison. The sentence will be served concurrent to the sentence she received Dec. 20, 2012, of five years and four months in state prison and $1,104,496 restitution for a Nov. 26, 2012, conviction by a jury of six felony counts of filing false tax returns.
Co-Defendants
Roy Chester Dickson, 64, Yorba Linda, Unitys attorney, is charged with two felony counts of conspiracy, eight felony counts of capping or paying for referrals, 30 felony counts of grand theft, 30 counts of insurance fraud, 30 felony counts of making false and fraudulent claims, one felony count of money laundering, and white collar crime sentencing enhancements for taking over $2.5 million. If convicted, Dickson faces a minimum sentence of 55 years in state prison. He is out of custody on $100,000 bail and is scheduled for a trial setting conference Jan. 25, 2013, at 8:30 a.m. in Department C-41, Central Justice Center. Dickson was found guilty by a jury Nov. 26, 2012, of two felony counts of filing a false personal tax return and was sentenced Dec. 20, 2012, to two years and eight months in state prison and $41,629 restitution on the tax conviction.
Andrew Robert Harnen, 58, Rosemead, Unitys accountant, is charged with two felony counts of conspiracy, eight felony counts of capping or paying for referrals, 30 felony counts of grand theft, 30 felony counts of insurance fraud, 30 felony counts of making false and fraudulent claims, one felony count of filing a false tax return, and white collar crime sentencing enhancements for taking over $2.5 million. If convicted, Harnen faces a minimum sentence of 55 years in state prison. Harnen is scheduled for a trial setting conference Jan. 25, 2013, at 8:30 a.m. in Department C-41, Central Justice Center. Harnen was found guilty by a jury Nov. 26, 2012, of three felony counts of filing a false tax return and six counts of failing to file tax returns and sentenced Dec. 20, 2012, to five years and four months in state prison and $904,780 restitution.
Doctor Mario Rosenberg, 65, is charged with 49 felony counts including two counts of conspiracy, eight counts of capping or paying for referrals, 19 counts of insurance fraud, 19 counts of making false or fraudulent claims, and one count of grand theft. If convicted, Rosenberg faces a minimum sentence of 55 years in state prison. Rosenberg is out of custody on $1 million bail and is scheduled for a trial setting conference, Jan. 25, 2013, at 9:00 a.m. in Department C-41, Central Justice Center.
Doctor William Wilson Hampton, Jr., 57, Seal Beach, pleaded guilty May 8, 2009, to 47 felony counts including conspiracy, insurance fraud, and capping and was sentenced to 16 years in state prison.
Doctor Michael Cheeluen Chan, 66, Cerritos, pleaded guilty Aug. 4, 2011, to the court to 40 felony counts including conspiracy to commit insurance fraud, insurance fraud, aiding and abetting capping with white collar crime sentencing enhancements. He faces a sentence ranging from probation up to 28 years in state prison at his sentencing March 4, 2013, at 9:00 a.m. in Department C-41, Central Justice Center.
Capper Sue Nanda, 44, Costa Mesa, pleaded guilty Feb. 20, 2009, to 22 felony counts including conspiracy, capping, grand theft, filing false tax returns, failing to file tax returns, and making false and fraudulent statements. Nanda was sentenced to 10 years in state prison and ordered to pay over $500,000 in restitution for personal and corporate back taxes.
Capper Maria DeJesus Licea Rosales, 45, pleaded guilty Aug. 7, 2009, to 96 felony counts including conspiracy, capping, insurance fraud, grand theft, filing fraudulent tax returns, and sentencing enhancements for white collar crime and loss over $2.5 million. She was sentenced to eight years in state prison.
Capper Olga Lilia Toscano, 45, pleaded guilty Aug. 11, 2009, to the court to 98 felony counts including conspiracy, capping, insurance fraud, grand theft, tax evasion, and sentencing enhancements for aggravated white collar crime and loss exceeding $2.5 million. She was sentenced to eight years in state prison.
Capper Ngoc Trang Huynh, 53, pleaded guilty Aug. 19, 2011, to 56 felony counts including conspiracy, capping, insurance fraud, grand theft, tax evasion, filing a false income tax return, and sentencing enhancements for aggravated white collar crime and loss exceeding $2.5 million. He faces a maximum of 45 years and eight months in state prison at his sentencing March 4, 2013, at 9:00 a.m. in Department C-41, Central Justice Center.
Capper Pancha Keophimphone, 61, pleaded guilty to a court offer Aug. 19, 2011, to 56 felony counts including conspiracy, capping, insurance fraud, grand theft, tax evasion, and sentencing enhancements for aggravated white collar crime and loss exceeding $2.5 million. Keophimphone was sentenced to 12 years in state prison stayed pending completion of five years formal probation. She was ordered to serve one year in jail and will be ordered to pay restitution at a hearing on March 4, 2013.
Capper Thuy Thu Huynh, 54, pleaded guilty Aug. 25, 2011, to 58 felony counts including conspiracy, capping, insurance fraud, grand theft, tax evasion, and sentencing enhancements for aggravated white collar crime and loss exceeding $2.5 million. Huynh is scheduled to be sentenced March 4, 2013, at 9:00 a.m. in Department C-41, Central Justice Center.
Capper Henry Truong, 44, pleaded guilty April 7, 2006, to 13 felony counts including conspiracy, capping, insurance fraud, grand theft, tax evasion, and sentencing enhancements for aggravated white collar crime and loss exceeding $2.5 million. Truong was sentenced to 12 years in state prison and ordered to pay restitution. (Case # 04CF2197)
Cappers Amanda Phuc Tran, 53, and Nicholas Vu, 54, pleaded guilty Nov. 21, 2005, to two felony counts each of insurance fraud and making false or fraudulent claims with sentencing enhancements for loss exceeding $2.5 million. Tran and Vu were sentenced to five years in prison stayed pending 10 years formal probation and ordered to pay restitution. (Case # 05CF1869)
Administrator Tam Vu Pham, 48, pleaded guilty Dec. 27, 2005, to one felony count each of conspiracy and money laundering, eight felony counts of capping or paying for referrals, three felony counts of making false or fraudulent claims, and two felony counts of insurance fraud, with sentencing enhancements for aggravated white collar crime, loss exceeding $2.5 million, and laundering over $150,000, Pham was sentenced to 12 years in prison and ordered to pay restitution. (Case # 04CF2197)
Administrator Huong Thien Ngo, 46, pleaded guilty Dec. 27, 2005, to one felony count each of conspiracy, making false or fraudulent claims, tax evasion, and money laundering, with sentencing enhancements for aggravated white collar crime, loss exceeding $2.5 million, and laundering over $150,000. Ngo was sentenced to seven years in prison suspended pending six years of formal probation and ordered to pay restitution. (Case # 04CF2197)
Administrator Lan Thi Ngoc Nguyen, 56, pleaded guilty Dec. 27, 2005, to one felony count each of conspiracy, making false or fraudulent claims, and filing a false tax return, with sentencing enhancements for aggravated white collar crime and loss exceeding 42.5 million. Nguyen was sentenced to five years in state prison suspended pending six years of formal probation and ordered to pay restitution. (Case # 04CF2197)
Case Overview
The defendants in the Unity case are accused of participating in a $154 million medical insurance fraud scheme that recruited 2,841 healthy people from all over the country to receive unnecessary surgeries in exchange for money or low cost cosmetic surgery. Insurance companies paid out more than $20 million over a 9-month period.
Of the 19 defendants charged in the Unity case, 13 were indicted by a criminal grand jury on June 13, 2008. Six other defendants in the Unity case pleaded guilty prior to the indictment and have been sentenced.
The Orange County Grand Jury examined 1,054 exhibits and heard testimony from 56 witnesses over 28 days, resulting in a 70-page indictment. The indicted defendants include an attorney, accountant, three doctors, and patient recruiters known as cappers. The recruitment of patients, or capping, is illegal in California.
Unity was jointly investigated by the California Department of Insurance and Orange County District Attorneys Office with assistance from the California Franchise Tax Board.
Cappers
Keophimphone, Ngoc Huynh, Thuy Thu Huynh, Toscano, Nanda, Rosales, Truong, Tran, and Vu, have pleaded guilty to multiple felony counts of capping.
The Unity cappers targeted employees from businesses in 39 states who were covered by PPO insurance plans, affecting more than 1,000 employers whose employees became involved in this scheme. They arranged transportation for the patients, scheduled the surgeries, and coached the healthy patients on what to say. In exchange for undergoing surgery, the patients received a cash payment, usually between $300 and $1,000 per surgery, or credit toward a free or discounted cosmetic surgery.
Keophimphone personally recruited 118 patients from 17 different states for 297 surgical procedures. These so-called patients, who were mostly coming from other states besides California, resulted in over $8 million in billings to insurance companies for unnecessary surgical procedures. Ngoc Huynh personally recruited 67 so-called patients, most coming from outside California. These so-called patients received 151 unnecessary medical procedures resulting in over $4 million in billings to insurance companies.
Rosales recruited over 90 so-called patients, all of whom were from California. Nanda recruited over 170 so-called patients from 16 different states for unnecessary surgical procedures. They had no medical training, yet recruited patients with PPO insurance, scheduled surgical procedures, and coached patients to correctly describe symptoms for the unnecessary surgical procedures. They assisted patients in filling out surgery center paperwork, including having them sign a false affidavit stating that they had not been offered compensation and had not received any compensation in exchange for using Unitys services. For Unity capping, Nanda was paid directly and through corporations she had set up.
Doctors
The three doctors charged in this case are accused of participating in medical insurance fraud for performing unnecessary medical procedures on healthy people with the knowledge that the patients were being recruited. Doctors Chan, Hampton, and Rosenberg are accused of performing a total of 1,037 procedures, resulting in insurance billings exceeding $30 million for the facilities fees alone. Unity received over $5.1 million in payment as a result of the surgeries performed by these doctors.
The doctors performed many of the surgeries on Saturdays and Sundays and often performed the same procedures on co-workers or members of the same household on the same day. The doctors are accused of ignoring basic medical protocols such as: 1) Patients receiving surgeries on consecutive days instead of under one anesthesia; 2) Doctors not meeting the patients prior to operating; 3) Doctors not following up with patients after the procedure was completed; and 4) Doctors not obtaining necessary medical information.
Chan worked as the Medical Director at Unity and specialized in invasive gynecological procedures. He performed unnecessary surgeries on 161 patients including include laproscopy, tubaligation, colporrhaphy, and hysterectomy procedures. Not a single one of Chans patients were referred by a doctor or were medically necessary. Every patient Chan operated on was referred by a capper, 88 percent being referred by cappers charged in this case. Of Chans patients, 60 percent were flown in for the unnecessary surgeries from 18 states outside of California.
Hampton, a general surgeon, performed 180 procedures on 178 patients. He primarily performed thoracic sympathectomies, also known as sweaty palm surgeries, a highly unusual and dangerous medical procedure that can often be treated with topical creams, medication, and botox. Of the patients that underwent surgery by Hampton, 97 percent were referred by Unity cappers. Hampton was also indicted and convicted by the federal government for his involvement in a scheme similar to the Unity case.
Attorney
Attorney Dickson went to Unity after having previously managed and represented another surgery center involved in similar illegal activities. He was sanctioned by the federal bankruptcy court for filing a fraudulent bankruptcy claim for a doctor at that surgery center. Dickson was hired by Unity to collect payments from insurance companies and patients. He helped the surgery scheme by creating fraudulent documents to disguise illegal capping activities.
Immediately after the OCDA searched Unity in April 2003, Dickson used his attorney client trust account to keep Unity open and operating and furthered the criminal activity by funneling over $1 million in surgery center cash assets into his account to prevent it from being seized. In the three months following the search of Unity, he laundered as much as $3 million into the attorney client trust account using fraudulently billed payments from insurance companies to keep the surgery center operating.
Accountant
Accountant Harnen, a Unity bookkeeper and profit shareholder, signed 10 checks to doctors totaling over $50,000 and 157 checks to cappers totaling almost $1 million for their participation in the Unity scheme. He acted as an official representative for several of the corporations used by Unity to hide their illegal scheme from insurance companies, and was one of the bank signatories for multiple bank accounts used in the fraud.
Harnen assisted cappers and administrators in hiding their illegal activities by helping them funnel money to corporations that he helped them to create with the intention of hiding income and avoiding detection of their crimes. Harnen helped Unity continue to illegally recruit patients and defraud insurance companies using his own corporation to pay cappers and distribute profits to shareholders. Harnen failed to report more than $6 million in income over a 3-year period by failing to file tax returns and filing false tax returns.
Administrators
Landon and Francis were clinic administrators and recruited doctors and cappers. They ran the Unity facility, coordinated the fraudulent surgeries, sent all facility billings, received payments from insurance companies on fraudulent billings, and received and paid capper invoices for patient procedures.
Administrators Pham, Ngo, and Nguyen pleaded guilty to performing the same roles in the scheme.
Senior Deputy District Attorney William Overtoom and Deputy District Attorney George McFetridge of the Major Fraud Unit are prosecuting all of the defendants in this case.
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