August 7, 2009
CAPPER SENTENCED TO 10 YEARS IN PRISON FOR RECRUITING HEALTHY PATIENTS FOR UNNECESSARY SURGERIES IN $154
MILLION MEDICAL INSURANCE FRAUD SCHEME
SANTA ANA - A capper in the largest medical fraud prosecution in the nation was sentenced today to 10 years in state prison for recruiting over 170
healthy patients to undergo unnecessary and dangerous surgeries to fraudulently bill medical insurance companies. Sue Nanda, 41, Costa Mesa, pleaded
guilty Feb. 20, 2009, to 22 felony counts including conspiracy, capping, failing to file tax returns, filing fraudulent tax returns, grand theft, and
sentencing enhancements for white collar crime.
The Unity Outpatient Surgery Center (Unity) scheme, in which $154 million was fraudulently billed to medical insurance companies, was a joint
investigation by the California Department of Insurance and Orange County District Attorney's Office with assistance from the California Franchise
Tax Board (CFTB).
Of the 19 defendants charged in the Unity case, 13 were indicted by a criminal grand jury on June 13, 2008. 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."
Doctor William Wilson Hampton, Jr., 53, Seal Beach, was the second indicted defendant to plead guilty. He pleaded guilty to 47 felony counts
including conspiracy, insurance fraud, and capping on May 8. 2009, and was sentenced to 16 years in state prison.
The other six defendants in the Unity case pleaded guilty prior to the indictment and have been sentenced. The remaining 11 defendants are scheduled
for jury trial on Oct. 26, 2009, at the Central Justice Center in Santa Ana.
Senior Trial Counsel Todd Spitzer and Deputy District Attorney Rick Welsh of the Healthcare Insurance Fraud Unit prosecuted this case.
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. The recruitment of patients, or "capping," is
illegal in California. Insurance companies paid out more than $20 million during a 9-month period.
Administrators
Rosalinda Landon and Dee Francis are accused of being clinic administrators and recruiting doctors and cappers. They are accused of running the Unity
facility, coordinating the fraudulent surgeries, mailing all facility billings, receiving payments from insurance companies on fraudulent billings, receiving
and paying capper invoices for patient procedures. Administrators Tam Vu Pham, Huong Ngo, and Lan Nguyen, have pleaded guilty to performing the
same roles in the scheme. Pham, the primary perpetrator, was sentenced to 12 years in state prison.
Cappers
Maria Rosales, Olga Toscano, Pancha Keophimone, Thuy Huynh, and Ngoc Huynh are accused as acting as cappers. Henry Truong, Amanda Tran,
and Nicholas Vu have pleaded guilty to multiple felony counts of capping. Nanda personally recruited over 170 so-called patients from 16 different
states for unnecessary surgical procedures.
The Unity cappers are accused of targeting 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 are accused of arranging transportation for the patients, scheduling the
surgeries, and coaching 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. Nanda, who had no medical training, recruited patients
with PPO insurance, scheduled surgical procedures, and coached patients to correctly describe symptoms for the unnecessary surgical procedures. She
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 Unity's services. For Unity capping, Nanda was paid directly and through
corporations she had set up. She will be ordered to pay restitution and back taxes for personal and corporate taxes to CFTB. A restitution hearing is
scheduled for Dec. 4, 2009.
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 Michael Chan, Hampton, and Mario Rosenberg are accused of performing
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.
Many of the surgeries were performed on Saturdays and Sundays by the doctors. They 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 while 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.
Hampton, a general surgeon, performed 180 procedures on 178 patients. He primarily performed thoracic sympathectomies, also known as sweaty
palm surgeries, which is 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% 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
Roy Dickson, an attorney, is accused of coming 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 is accused of helping the surgery scheme by creating fraudulent
documents to disguise illegal capping activities.
Immediately after the OCDA searched Unity in April 2003, Dickson is accused of using his attorney client trust account to keep Unity open and
operating and furthering 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 is accused of laundering 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
Andrew Harnen, an accountant, bookkeeper and profit shareholder for Unity, is accused of signing 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 is accused of acting as an official representative for several
of the corporations used by Unity to hide their illegal scheme from insurance companies, and of being one of the bank signatories for multiple bank
accounts used in the fraud.
Harnen is accused of assisting 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 is accused of helping Unity continue to illegally recruit
"patients" and defraud insurance companies using his own corporation to pay cappers and distribute profits to shareholders. Harnen is also accused of
assisting co-defendants Francis, Landon, Rosales, and Toscano in filing fraudulent tax returns. Harnen is accused of failing to report more than $6
million over a 3-year period by failing to file tax returns and filing false tax returns.
###
CAPPER SENTENCED TO 10 YEARS IN PRISON FOR RECRUITING HEALTHY PATIENTS FOR UNNECESSARY SURGERIES IN $154
MILLION MEDICAL INSURANCE FRAUD SCHEME
SANTA ANA - A capper in the largest medical fraud prosecution in the nation was sentenced today to 10 years in state prison for recruiting over 170
healthy patients to undergo unnecessary and dangerous surgeries to fraudulently bill medical insurance companies. Sue Nanda, 41, Costa Mesa, pleaded
guilty Feb. 20, 2009, to 22 felony counts including conspiracy, capping, failing to file tax returns, filing fraudulent tax returns, grand theft, and
sentencing enhancements for white collar crime.
The Unity Outpatient Surgery Center (Unity) scheme, in which $154 million was fraudulently billed to medical insurance companies, was a joint
investigation by the California Department of Insurance and Orange County District Attorney's Office with assistance from the California Franchise
Tax Board (CFTB).
Of the 19 defendants charged in the Unity case, 13 were indicted by a criminal grand jury on June 13, 2008. 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."
Doctor William Wilson Hampton, Jr., 53, Seal Beach, was the second indicted defendant to plead guilty. He pleaded guilty to 47 felony counts
including conspiracy, insurance fraud, and capping on May 8. 2009, and was sentenced to 16 years in state prison.
The other six defendants in the Unity case pleaded guilty prior to the indictment and have been sentenced. The remaining 11 defendants are scheduled
for jury trial on Oct. 26, 2009, at the Central Justice Center in Santa Ana.
Senior Trial Counsel Todd Spitzer and Deputy District Attorney Rick Welsh of the Healthcare Insurance Fraud Unit prosecuted this case.
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. The recruitment of patients, or "capping," is
illegal in California. Insurance companies paid out more than $20 million during a 9-month period.
Administrators
Rosalinda Landon and Dee Francis are accused of being clinic administrators and recruiting doctors and cappers. They are accused of running the Unity
facility, coordinating the fraudulent surgeries, mailing all facility billings, receiving payments from insurance companies on fraudulent billings, receiving
and paying capper invoices for patient procedures. Administrators Tam Vu Pham, Huong Ngo, and Lan Nguyen, have pleaded guilty to performing the
same roles in the scheme. Pham, the primary perpetrator, was sentenced to 12 years in state prison.
Cappers
Maria Rosales, Olga Toscano, Pancha Keophimone, Thuy Huynh, and Ngoc Huynh are accused as acting as cappers. Henry Truong, Amanda Tran,
and Nicholas Vu have pleaded guilty to multiple felony counts of capping. Nanda personally recruited over 170 so-called patients from 16 different
states for unnecessary surgical procedures.
The Unity cappers are accused of targeting 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 are accused of arranging transportation for the patients, scheduling the
surgeries, and coaching 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. Nanda, who had no medical training, recruited patients
with PPO insurance, scheduled surgical procedures, and coached patients to correctly describe symptoms for the unnecessary surgical procedures. She
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 Unity's services. For Unity capping, Nanda was paid directly and through
corporations she had set up. She will be ordered to pay restitution and back taxes for personal and corporate taxes to CFTB. A restitution hearing is
scheduled for Dec. 4, 2009.
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 Michael Chan, Hampton, and Mario Rosenberg are accused of performing
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.
Many of the surgeries were performed on Saturdays and Sundays by the doctors. They 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 while 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.
Hampton, a general surgeon, performed 180 procedures on 178 patients. He primarily performed thoracic sympathectomies, also known as sweaty
palm surgeries, which is 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% 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
Roy Dickson, an attorney, is accused of coming 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 is accused of helping the surgery scheme by creating fraudulent
documents to disguise illegal capping activities.
Immediately after the OCDA searched Unity in April 2003, Dickson is accused of using his attorney client trust account to keep Unity open and
operating and furthering 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 is accused of laundering 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
Andrew Harnen, an accountant, bookkeeper and profit shareholder for Unity, is accused of signing 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 is accused of acting as an official representative for several
of the corporations used by Unity to hide their illegal scheme from insurance companies, and of being one of the bank signatories for multiple bank
accounts used in the fraud.
Harnen is accused of assisting 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 is accused of helping Unity continue to illegally recruit
"patients" and defraud insurance companies using his own corporation to pay cappers and distribute profits to shareholders. Harnen is also accused of
assisting co-defendants Francis, Landon, Rosales, and Toscano in filing fraudulent tax returns. Harnen is accused of failing to report more than $6
million over a 3-year period by failing to file tax returns and filing false tax returns.
###
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