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Former owners of medical center to pay $10-million settlement in alleged Medicare fraud scheme

January 26, 2010 |  7:16 am

The two former owners of City of Angels Medical Center will pay $10 million as part of a consent judgment over allegations that they performed unnecessary medical work on homeless people recruited from skid row shelters as part of a Medicare fraud scheme.

The case involves Los Angeles businessman Robert Bourseau and Dr. Rudra Sabaratnam, who were accused by federal prosecutors of Medicare and Medi-Cal fraud.

Authorities alleged that City of Angels found healthy homeless people in downtown Los Angeles and brought them to various medical facilities, where they received medical treatment they didn't need. The defendants then allegedly charged the government.

"The government’s complaint alleged that Bourseau and Sabaratnam directed a scheme in which City of Angels paid “recruiters” employed at homeless shelters in the skid row area of the city to deliver their homeless clients by ambulance to the hospital for medical treatment regardless of whether their clients in fact needed or requested such treatment," a U.S. attorney said in a statement.

"The City of Angels would then bill the Medicare and Medi-Cal programs for a variety of medical services allegedly rendered to the homeless patients, many of which were not medically necessary."

--Shelby Grad