Largest Ever Medical Insurance Fraud Case Near Completion

Closing arguments were wrapped up yesterday in a California tax evasion case that prosecutors are calling the largest ever case of medical fraud in the United States.

“Really what this case is about is the documents… documents speak for themselves,” said Deputy District Attorney William Overtoom to jurors in the Superior Court of Judge Thomas Goethals.  “In the end what this case is about is tax returns.”

Four defendants associated with the Unity Surgical Outpatient Center stand accused in the trial.  They include two administrators of the facility as well as their attorney and accountant.

Unity Surgical Outpatient Center is located in Buena Park, California.  The Center solicited over 2,800 patients from locations throughout the nation.  The individuals were healthy and not in need of medical procedures.  Yet the Center billed insurance companies over $150 million in the fraud for a variety of medical procedures.

A grand jury first indicted the foursome in 2008.  The indictment involves two major parts.  The first part is tax evasion charges stemming from fraudulent tax returns that understated the defendants’ income.  The second part is the insurance fraud related to the billings.

The current trial involves only the tax evasion charges.  A future trial will address the insurance fraud charges.

If the defendants are found guilty on the tax evasion charges, they will receive anywhere from 5 to 15 years in prison.  However, for the insurance fraud charges they could each receive a life sentence.

“Instead of a case about documents, (its) a case about people,” noted defense attorney Roger Sheaks.  Sheaks is representing the two administrators of the Center, Rosalinda Landon, 66, and Dee Francis, 63.

Defense attorneys, including Roy Dickson who is representing himself, have argued that the defendants were not aware of the fraudulent insurance claims and were simply doing their jobs for their boss, Tam Vu Pham.  They also claimed that they did not understand the details of their tax returns, as they used tax preparers who were responsible for the details in the returns.

Pham was found guilty of felony charges in 2005 related to insurance fraud, money laundering, and other charges.  He received a prison sentence of 12 years.

In addition, 13 additional defendants were found guilty of fraud in 2008, including several physicians who worked at the Center.

“This is a case laced with doubt,” Dickson, 64, noted as a part of his closing arguments.  The prosecution claimed that over $4 million in money received by the Center as a part of the insurance fraud flowed through Dickson’s firm, which Dickson distributed to various other accounts in an effort to launder it.  Dickson noted that the prosecution never performed a thorough analysis of his taxes and therefore did not understand his financial position.

“I didn’t always do things right (but) I did not evade taxes,” Dickson added.  “I am innocent you all.  I came here innocent and hope you’ll allow me to leave here innocent.”

To date the trial has lasted almost three months.  Jurors have heard testimony from over 40 witnesses and have reviewed over 800 pieces of evidence.  It is not known how long they will deliberate before returning a verdict against the four defendants.

by Mark Johnston

Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.