Aug 11, 2008 1:27 pm US/Pacific
Man Accused Of Insurance Fraud Pleads Not Guilty
LOS ANGELES (CBS) ―
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A Los Angeles man who ran a center on Skid Row pleaded not guilty today in taking part in an alleged scheme to defraud Medicare and Medi-Cal, using homeless people.
CBS
A Los Angeles man who ran a center on Skid Row pleaded not guilty today to taking part in an alleged scheme to defraud Medicare and Medi-Cal, using homeless people.
Estill Mitts, 64, who lives in the Miracle Mile section of the city, entered his plea before U.S. Magistrate Judge Charles Eick in downtown Los
Angeles.
Mitts, out of custody on $25,000 bond, has been on home detention.
Eick set a Sept. 30 trial date.
His co-defendant, Rudra Sabarathnam, also 64, of Brentwood, is free on
$700,000 bond.
Sabarathnam's arraignment is scheduled for Aug. 18.
Sabarathnam, identified in court papers as the owner/operator of City of
Angels Medical Center in Los Angeles, faces eight counts of payment of
kickbacks for patient referrals.
He could face 50 years in prison if convicted.
Mitts, who authorities say opened an "assessment center" on Skid Row
in 2004, is charged with four counts of receiving kickbacks, six counts of
money laundering and two counts of tax evasion for allegedly failing to report $479,000 in income in 2005 and more than $620,000 in income in 2006.
He faces 140 years in prison if convicted.
Since at least 2004, thousands of homeless people were paid $20 to $30
to be transported, via an ambulance company associated with Mitts, to
Sabarathnam's hospital, where they received unnecessary medical treatment, prosecutors allege.
Billings listed treatment for such conditions as dehydration, yeast
infections, exhaustion, chest pains and fatigue, according to court papers.
Doctors and hospitals involved in the scheme would bill Medicare and Medi-Cal for those treatments, some of which were never actually performed, prosecutors allege.
Prosecutors allege Mitts was paid up to $4,000 a month by City of Angels
to recruit 25 to 30 homeless people per month as patients, which he did by hiring "runners" to canvass Skid Row for candidates.
Runners were paid $40 for recruits who were Medicare-eligible, and $20 for patients who could receive Medi-Cal benefits, according to the government.
Mitts also was allegedly paid $20,000 a month by Los Angeles
Metropolitan Medical Center to fill unused beds, and $20,000 by Tustin Hospital to recruit 40 to 50 patients per month, according to a civil lawsuit filed by Los Angeles City Attorney Rocky Delgadillo against both facilities and City of Angels.
Last week's arrests and lawsuit capped a two-year investigation by
federal and local authorities that began in October 2006, when Los Angeles police spotted five patients being dumped on Skid Row.
Authorities later determined those "patients" were recruited for the scheme.
(© 2008 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)
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