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Couple Charged in $40-Million Health Fraud

Defendants stole identities of patients and doctors in a massive scheme, U.S. prosecutor says.

October 10, 2003|Tim Reiterman | Times Staff Writer

In one of the largest alleged health-care frauds in California, two Los Angeles people were charged Thursday in a scheme to bilk two government programs out of more than $40 million by stealing doctors' identities, illegally running half a dozen medical clinics and dispensing gifts at health fairs to find patients for phony billings.

A federal grand jury in Sacramento indicted Khaled Ahmed, 41, and Sandra Cervantes, 31, on charges that they had defrauded and tried to defraud the Medi-Cal and Family Planning, Access, Care and Treatment programs from 1996 to mid-2000.

Of more than 350 health fraud cases ever filed by the U.S. attorney's office in Sacramento, where most such federal prosecutions are handled, this was the largest.

If convicted, each defendant faces as much as 10 years in prison, said Assistant U.S. Atty. Daniel S. Linhardt.

The two are charged with stealing the identities of doctors and patients so they could bill the programs for lab tests, medical supplies and drugs that were not provided and for services that were exaggerated or were provided by unlicensed personnel.

The indictment alleges that Ahmed obtained the names of many patients by setting up mobile clinics at health fairs in the Huntington Park area, then enticing them with gifts and services to enroll in the family planning program. At the health fairs, the patients provided urine and blood samples that could aid in producing false billings.

"Although the patients did not see a doctor or receive any treatment or services," according to the indictment, the couple submitted bills "as if those individuals had been to an office visit."

Prosecutors said Ahmed owned several clinics in Los Angeles and Huntington Park, although only a licensed doctor may own a clinic and bill the state- and U.S.-funded Medi-Cal program. He also owned three pharmacies in Huntington Park.

In 1996, Ahmed and Cervantes, his wife, allegedly got a doctor's medical license number and repeatedly forged documents to get a Medi-Cal provider number, which is needed to bill the agency.

According to the indictment, they were able to obtain several billing numbers for the clinics and for the doctor, who treated patients there only briefly, in 1998.

After the doctor discovered they were misusing his provider number, the two defendants allegedly found another doctor to act as the sham owner of the clinics.

They also hired another doctor to work at the clinics. But because that doctor had been suspended from participation in the state health programs, the couple allegedly used the name of the doctor acting as the sham owner and had him sign the Medi-Cal billings for treatment he had not performed.

The two are charged with using the provider numbers of several other doctors who worked at the clinics for more false billings, but without the doctors' consent.

In addition, they are charged with billing for full office visits and counseling sessions when the patients were in the clinics only long enough to be signed up for the family planning program and to have blood and urine specimens taken.

Ahmed was charged with directing the medical staff to order excessive numbers of procedures, such as ultrasound tests and electrocardiograms, as well as excessive amounts of drugs, regardless of whether they were necessary. And patients allegedly received only a fraction of the drugs and other supplies for which the programs were billed.

For example, prosecutors say, the defendants billed for prescriptions and refills for family planning supplies such as contraceptives, when in fact the patients received only a few condoms.

In all, according to the indictment, they submitted more than $40 million in false billings.

Ahmed and Cervantes, who was the chief biller for the clinics, pharmacies and a laboratory owned by Ahmed, could not be reached for comment. A spokeswoman for the U.S. attorney said they had not been arrested but would be notified to appear in court.

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