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City of Angels Medical Center official pleads guilty in kickback scheme

March 18, 2009 |  6:05 pm

The former senior vice president of City of Angels Medical Center pleaded guilty today to paying illegal kickbacks to recruiters who referred homeless patients from skid row to the hospital, where they received unnecessary health services.

Dante Nicholson, 51, of Palmdale, was the third person convicted in a widespread scheme to pay illegal kickbacks and defraud Medicare and Medi-Cal by recruiting homeless people from downtown L.A.'s skid row area.

Nicholson appeared today before U.S. District Judge George H. King in Los Angeles and pleaded guilty to two counts of paying illegal kickbacks. In a plea agreement, Nicholson admitted to participating in a scheme to pay recruiters to refer homeless people with government medical benefits to City of Angels for in-patient hospital stays.

City of Angels billed Medicare and Medi-Cal for in-patient services conducted on the homeless recruits, including procedures where in-patient hospitalization was medically unnecessary, according to Assistant U.S. Atty. Vincent Farhat. The hospital tried to conceal the kickbacks by creating sham “consulting” contracts.

The charges Nicholson pleaded guilty to carry a maximum penalty of 10 years in federal prison. Nicholson has agreed to pay more than $4.1 million in restitution to Medicare and Medi-Cal. King ordered Nicholson to appear for sentencing Aug. 17.

In December 2008, Rudra Sabaratnam, the former CEO of City of Angels pleaded guilty to paying illegal kickbacks for patient referrals.

Estill Mitts, who operated a downtown center that recruited homeless people to receive unnecessary health services, pleaded guilty in September 2008 to conspiracy to commit several federal crimes. Robert Bourseau, a former chairman of the board and co-owner of the hospital, has also been indicted and remains in custody without bond.

Sabaratnam and Mitts are scheduled to be sentenced Aug. 17. Prosecutors said the case against Nicholson and the other defendants is part of an ongoing investigation by multiple agencies.

-- Richard Winton