Fraud Roundup

‘Rent-a-Patient’ Doctor Sentenced to Nearly Five Years

A doctor who paid patients so he could carry out unnecessary surgeries and then bill insurance companies for the work has been sentenced in Los Angeles to nearly five years in federal prison.

The U.S. attorney’s office says 60-year-old Mamdouh S. Bahna of Bel Air, Calif., started a “rent-a-patient” scam to perform the procedures. Operations included colonoscopies and “sweaty-palm” surgeries. Federal authorities say some patients received discounts on cosmetic surgery in exchange for their cooperation.

Prosecutors say Bahna defrauded insurance companies out of about $1 million.

He was ordered to serve 58 months in prison and pay a $150,000 fine. Bahna had pleaded guilty in July to health care fraud.

A second doctor in the case, William W. Hampton, was recently convicted of health care fraud and is set to be sentenced in March.

Oregon Detectives Seek Trautman Perrin & Hale Victims

Portland Police Bureau Fraud Detectives and investigators from the State of Oregon Insurance Division of the Department of Consumer & Business Services have executed a search warrant at Trautman Perrin & Hale Insurance in connection with an ongoing investigation of reported fraud and violations of state insurance laws by the owner of the business.

The investigation began after detectives learned of the theft of insurance premiums by 46-year-old Darlene Jo Rethwill, the owner and president of Trautman Perrin & Hale Insurance. Based on evidence obtained during the investigation, detectives believe that Rethwill wrote insurance policies for individuals and businesses and used the insurance premiums for personal gain instead of forwarding the money to the appropriate insurance company.

The fraud has left dozens and potentially hundreds of victims unwittingly without personal or business insurance, DCBS said.

Investigators are seeking additional victims who obtained insurance through Trautman Perrin & Hale Insurance.

Victims are being asked to call their insurance provider to verify coverage and call the Insurance Division of the Department of Consumer and Business Services, Detective Andy Madden at 503-823-0450 if they suspect they don’t have personal or business insurance coverage that should have been placed through the agency.

California Store Director Sentenced in Workers’ Comp Case

Roseville, Calif., Bel Air Market Store Director Nichole Leddy and Assistant Store Director Amy Looper have been sentenced each to one count of workers’ compensation insurance fraud in Placer County, Calif., Superior Court, according to the Department of Insurance.

In August, Insurance Commissioner Steve Poizner announced that Leddy and Looper were arraigned for allegedly committing workers’ compensation fraud. Leddy and Looper allegedly encouraged injured employees at Bel Air Market to refrain from filing workers’ compensation claims, and instead instructed them to seek treatment through individual health insurance policies. The CDI investigation revealed that Leddy and Looper allegedly discouraged multiple employees from filing claims to keep the store record injury-free and earn special store incentives, including bonuses for management.

The investigation also revealed that in one instance, an injured employee was allegedly given cash from the store fund to cover co-payments for private health insurance coverage, CDI said. Another employee was allegedly instructed to inform her private doctor that an on-duty work injury had occurred at home.

The CDI Fraud Division launched its investigation of the store after receiving an anonymous tip in March 2007.

Pursuant to a plea agreement, Leddy and Looper were each sentenced to 45 days in county jail, which may be converted to 360 hours of community service, and three years of formal probation, among other fines and conditions.

Leddy agreed to pay $13,500, and Looper agreed to pay $2,500 to the California Workers’ Compensation Fraud Fund.

The case was a joint investigation between the Fraud Division and the Placer County District Attorney’s Office.

California State Fund Receives $153,000 in Workers’ Comp Case

A San Diego businessman was ordered to pay $153,779 in restitution to California’s State Compensation Insurance Fund as part of his conviction in workers’ compensation fraud.

Marco Rangel pleaded guilty to one count of insurance fraud and one count of tax evasion. San Diego County Superior Court Judge Stephanie Sontag sentenced Rangel to one day in custody and three years of probation.

Marco Rangel operates High Quality Drywall, a San Marcos, Calif.-based drywall business. SCIF has provided workers’ compensation coverage for Rangel’s business since 2003.

In 2005, an employee of Rangel was injured and a claim was submitted to State Compensation Insurance Fund. During the claim investigation, a State Fund adjuster discovered the injured worker was paid cash wages.

The tip regarding cash payments was forwarded to State Fund’s Special Investigation Unit (SIU), which conducted an investigation that included a review of prior audits of the business, as well as an interview of the claimant. SIU submitted its suspected fraud case to the San Diego County District Attorney’s Office.

The San Diego District Attorney’s office later issued a search warrant on Rangel’s company and seized business records. The audit confirmed the fraud to not only include cash payments, but also discovered the misclassification of employees in lower class codes in order pay lower workers’ compensation premiums, CDI said.

Topics California