Four people were convicted today in Santa Ana in connection with the nation’s largest medical fraud case, a massive $154 million scheme in which the defendants allegedly recruited hundreds of people for unnecessary and dangerous surgeries bilking dozens of insurance companies.
The case is the latest and the largest in a national effort to crackdown on clinics that recruit patients for unnecessary medical procedures in order to defraud insurance companies and Medicare. After a grueling 12-day deliberation in which multiple jurors quit, the jury found four defendants guilty on two dozen counts of tax fraud. In the upcoming second phase of the trial, doctors and administrators will face more than 100 charges pertaining to conspiracy and medical fraud.
So far, 19 people have been charged in the case including an attorney, accountant, three doctors, and patient recruiters known as “cappers.” According to prosecutors, the defendants recruited 2,841 healthy people from all over the country to receive unnecessary surgeries in exchange for money or low cost cosmetic surgery amassing $154 million in fraudulent charges.
In many cases, the doctors never saw their patients before or after the surgeries for consultations and follow-up care, according to the Orange County District Attorney’s Office.
Jurors reached the verdicts last Tuesday, but due to the Thanksgiving holiday, Orange County Superior Court Thomas Goethals delayed the reading of the verdicts until today. The jurors reached verdicts on 35 of the 40 total counts. The defendants were convicted on 24 of the counts, but acquitted on 11 others.
Convicted were Rosalinda Rodriguez Landon, 67, the office manager at Unity Outpatient Surgery Center in Buena Park; suspended attorney Roy Chester Dickson, 64, who represented himself; accountant Andrew Robert Harnen, 58; and administrator Dee Francis, 62.
``We're delighted the jury did their job,'' said Deputy District Attorney George McFetridge, who prosecuted the case with Deputy District Attorney Bill Overtoom. ``They were so conscientious.''
Jurors offered up a mixed bag on the corporate tax fraud charges, but voted to convict on most of the counts related to personal income tax fraud.
``To me it shows the jury was being very, very diligent,'' McFetridge said. ``On the corporate liability there wasn't only the issue of tax liability, but it was the issue of who was responsible.''
Goethals set Dec. 20 for sentencing and a pretrial hearing on the five remaining counts. McFetridge said it's possible those charges will be considered by a new jury in a second phase of trial on health care fraud allegations.
Goethals ordered all of the defendants to jail pending sentencing, including Dickson, who argued that he should remain free so he could better prepare for the second phase of the trial.
``I'm very mindful of that situation,'' Goethals told Dickson, adding that he may reconsider.
The second phase of the case is expected to go to trial in the spring or later, focusing on allegations that the group defrauded about 32 insurance companies. An additional defendant -- Dr. Mario Rosenberg, 65 -- is named in that action.
Landon was convicted on six counts, acquitted on two counts and the jury failed to reach verdicts on two counts.
``I'm surprised by the verdicts,'' Landon's attorney, Roger Sheaks, said. ``It appears to me she was acting in good faith and I believe the evidence supported that.''
Harnen was acquitted on charges related to aiding and abetting, according to his attorney, Maltaise Cini. But Harnen was convicted on the personal tax fraud charges.
``I respect the decision of the jury,'' Cini said, adding she thought it was a ``conscientious jury.''
Francis' attorney, Sonja Muir, also praised the panel.
"The jury worked really hard,'' she said. ``It was a complex case with complex issues. I'm disappointed, but I respect the work they did.''
Juror Tom Flahive said the panel had 500,000 pages of documents to review for the case.
``It became like a quest, like climbing a mountain,'' Flahive said of the trial and deliberations.
The panel lost three jurors during deliberations, forcing the jury to start again each time, Flahive said. One juror dropped out after the panel had reached verdicts on 17 counts, he added.
The defendants in the next phase of the trial are accused of recruiting 2,841 people nationwide to undergo unneeded medical tests and defrauding insurance companies. The alleged scheme revolved around Unity Outpatient Surgery Center but also involved two other outpatient surgery centers.
In his opening statement, Overtoom said the ``case is about lying and cheating and stealing.''
Some defendants created shell corporations and cheated on their taxes, Overtoom said. Landon failed to report $9.3 million in income, he said.
Francis was accused of failing to report $3.55 million in income. Harnen did not report $4.97 million, and Dickson was accused of not reporting $489,000, Overtoom said.
Dickson was accused of creating fraudulent documents to hide the illegal recruitment of patients and, after investigators searched Unity's offices in April 2003, he made a deposit into a personal account to keep it from being seized, prosecutors said.
Initially, there were 19 defendants. Fourteen have pleaded guilty.
Muir laid most of the blame for the scheme with administrator Tam Vu Pham, one of the owners of Unity, who pleaded guilty Dec. 27, 2005, and was sentenced to 12 years in prison.
``Basically, he was a charlatan, a scam artist,'' Muir said.
- City News Service contributed to this report.