Johnny Reed Jr. is homeless in Los Angeles and was used
in the scam.
The New York Times reports August 10 on indictments made in Los Angeles involving a scam that used homeless people, some of whom are disabled, to defraud medical insurance companies.
LOS ANGELES — An investigation into what the authorities say was a scheme that used homeless people to bilk tens of millions of dollars from federal and state health insurance programs began four years ago with a tip from a rescue mission employee.
The employee, Scott Johnson, who works for the Union Rescue Mission in the heart of Skid Row, said he had noticed vans and cars loading up homeless people.
“Sometimes they were so full of people that they put people in the trunks of cars,” Mr. Johnson said Thursday as he passed out bottles of water to the homeless. “I wondered what was going on, so I called the state authorities.”
Mr. Johnson said security cameras on the mission building captured what he initially thought were ambulances illegally discarding patients.
His tip in 2004, and those recordings, prompted state and local officials to investigate.In October 2006, Los Angeles police officers videotaped an ambulance “dumping” five homeless patients. They later determined that the patients had been recruited as “human pawns in a scheme by hospitals, doctors, ambulance companies and others to defraud” health insurance programs, according to the city attorney’s complaint.
And on Wednesday, federal agents raided three private for-profit hospitals — Los Angeles Metropolitan Medical Center, City of Angels Medical Center, and Tustin Hospital and Medical Center in Orange County — in connection with an alleged fraud scheme involving federal Medicaid and state Medi-Cal health insurance programs. Agents arrested Dr. Rudra Sabaratnam, owner and chief executive of City of Angels Medical Center, and Estill Mitts, who is accused of recruiting patients from his Skid Row storefront church, the 7th Street Christian Day Center. Mr. Mitts posted $25,000 bond and is confined to his home. Dr. Sabaratnam posted $700,000 bail Thursday night.
In a 21-count grand jury indictment, the men are charged with conspiring to take and receive kickbacks for referrals and to commit health care fraud. Mr. Mitts is also charged with money laundering and tax evasion.
Skid Row residents said the ambulances arrived each morning heralded by hospital patient recruiters who offered food, cigarettes and sometimes cash, to the homeless people who call these grimy downtown sidewalks home. Patients were paid as much as $30, court papers say.
