SANTA ANA, CALIFORNIA
Two Southern California residents were sentenced today to federal prison in connection with a scheme to defraud union and PPO health insurance programs by submitting bills for more than $71 million in medical procedures performed on insurance beneficiaries who received free or discounted cosmetic surgery, officials said.
U.S. District Judge Josephine L. Staton sentenced Theresa Fisher, 45, of Tustin, to three years and five months in federal prison and ordered her to pay $2.6 million in restitution, and Lindsay Hardgraves, 30, of San Pedro, who was sentenced to five months and ordered to pay restitution in the amount of $85,000.
An investigation indicated that the defendants ran the scheme out of a surgery center in Orange, which had various names such as Princess Cosmetic Surgery, Vista Surgical Center and Empire Surgical Center.
Many of the bills submitted to insurance programs were for unneeded medical procedures.
At today’s sentencing, officials said prosecutors took a very conservative position, based on a careful medical review of only some of the claims, that the documented loss figure related to unnecessary medical procedures was at least $2.6 million.
Following a jury trial in March, Fisher was found guilty of five counts of mail fraud, and Hardgraves was convicted of two counts of mail fraud, officials said.
According to authorities, the evidence at trial showed that marketers, who are sometimes known as cappers, lured patients to the surgery center.
When patients came to the surgery center for a consultation, they were told that they could receive free or discounted cosmetic surgeries if they underwent multiple, medically unnecessary procedures that would be billed to their union or PPO health care benefit program.
The unnecessary procedures typically performed on the “patients” were endoscopies (usually esophagogastroduodenoscopies, or EGDs), colonoscopies and cystoscopies, officials said.
Once the health care benefit program paid the claims, the patients were given free or discounted cosmetic surgeries, including “tummy tucks,” breast augmentations, and liposuction. Tummy tucks were billed as hernia repair surgeries, officials said.
A large number of the fraudulent claims were submitted to the International Longshore and Warehouse Union and Operating Engineers Union health insurance plans, according to authorities.
Fisher was a consultant at the surgery center, and Hardgraves was a marketer.
A third defendant in the case – Vi Nguyen, 31, of Placentia, who also worked as a consultant at the surgery center – pleaded guilty to four counts of mail fraud on January 16.
Nguyen is scheduled to be sentenced by Judge Staton on July 10.