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LOS ANGELES

Medi-Cal Fraud at Lab Admitted

October 03, 2002|DAVID ROSENZWEIG | TIMES STAFF WRITER

The owners of a Glendale medical laboratory agreed Wednesday to plead guilty to billing the Medi-Cal program for $19-million worth of bogus blood tests.

Luisa Gonzalez, 57, and Juan Carlos Ciraolo, 61, of Rancho Palos Verdes, admitted running what authorities described as the biggest fraud of its kind in the history of the state's medical assistance program for the indigent.

The Los Angeles Bio-Clinical Laboratory, operated by the pair in Glendale during the mid-1990s, paid kickbacks to two medical clinics for blood sample and fake doctor authorizations, prosecutors said.

Assistant U.S. Atty. Lee Arian said the scheme was detected after a Medi-Cal employee became suspicious because the laboratory's billings soared suddenly from "very little to many millions of dollars."

Arian said Medi-Cal paid Gonzalez and Ciraolo $7 million of the $19-million worth of fraudulent billings they submitted. The money has not been recovered, he said.

Under terms of their plea agreements, Gonzalez and Ciraolo face possible sentences of 46 to 57 months in prison. They are scheduled to plead to conspiracy and money-laundering charges Monday before U.S. District Judge Ronald S.W. Lew.

Ciraolo's attorney, William S. Pitman, called the deal a fair compromise. If convicted at trial, Ciraolo would have faced a much longer prison term. Gonzalez's lawyer could not be reached.

Two co-defendants have cooperated with prosecutors and were expected to testify against the lab operators.

Last November, Dr. Luis Lombardi, 42, of Lawndale, owner of San Gabriel Medical Clinic, pleaded guilty to federal charges stemming from the fake billing scheme.

Lombardi, who is awaiting sentencing and has been cooperating with FBI and IRS investigators, was accused of providing the laboratory with Medi-Cal patient names and forged physician authorizations for expensive, comprehensive blood tests.

The laboratory, which closed in 1997, was reimbursed by Medi-Cal at an average rate of $550 a patient, the highest allowed for blood tests.

Also pleading guilty previously was Alfredo Morales, 38, of Huntington Park, operator of La Guadalupana Medical Clinic. He too has been cooperating while awaiting sentencing, Arian said.

Prosecutors said La Guadalupana was used as a place to buy blood from people off the street. Morales also provided falsified medical records to the lab.

Morales' partner at the clinic, Roberto Calderon, 41, of Los Angeles, is a fugitive in the case.

Also charged is Ciraolo's wife, Constanza, 50. She is scheduled to go on trial later this month. Arian described her as a "lesser player" in the alleged scam. He said she paid for the blood samples and assisted in other criminal conduct.

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