After the last holdout has now entered a guilty plea, a group of California healthcare workers have all agreed to plead guilty to charges that they conspired to commit healthcare fraud and aided and abetted each other in executing a scheme that resulted in over $8.6 million false claims being made to Medi-Cal, California’s Medicaid program.

The indictment alleges that the co-defendants orchestrated the creation of false patient identifies, in order to claim reimbursement through a subsidiary program of Med-Cal, Family Planning, Access, Care, and Treatment (Family PACT). The Family PACT program was designed to provide family planning services, health screenings, blood testing, some prescriptions, and limited infertility services for indigent patients. Given the sensitive nature of care, Family PACT providers, which the co-defendants in this case were, had the sole responsibility of determining eligibility, and enrollment required no form of identification to be submitted in order to protect patient confidentiality. All that was required to become enrolled as a beneficiary was submission by a provider.

Starting in 2016, the co-defendants began to create fraudulent patient identities with fully falsified charts and submit claims for reimbursement to the Family PACT program for appointments that never occurred. As part of this scheme, the indictment alleges that the co-defendants would have various employees provide blood and urine samples to submit for testing under the false identities, and in exchange, the clinic would receive cash kickbacks from the laboratory providers because the lab would then make a claim on the patient referral. The co-defendants engaged in a similar system of cash kickbacks for referring false patient prescriptions to provider pharmacies, allowing those providers to make a false claim and profit.

While many organizations participated in the scheme in some way, this indictment only concerns the owner and employees of Los Angeles Community Clinic, Inc. The  clinic’s owner-operator Hilda Haroutunian will be sentenced on December 17; physician Keyvan Amirikhorheh, who was the last to plead guilty, will be sentenced on October 1; physician’s assistant Lorraine Watson will be sentenced on October 10;, medical assistant Edmond Sarkisyan will be sentenced on July 16, and employee Noem Sarkiysan will be sentenced on September 3.

This case is being charged as part of the Medicare Fraud Strike Force, which has charged over 4,200 defendants that collectively represent approximately $19 billion in false claims. This case is being prosecuted in the U.S. Attorney’s Office for the Central District of California and led by the Criminal Division’s Fraud Section prosecutors, Alexis Gregorian and Claire Yan. For more information, please see the DoJ press release. For more information on reporting instances of healthcare fraud as a private citizen, please contact Frohsin Barger & Walthall.