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Medi-Cal Scam Suspect Charged in 2002

Former clinic owner, named in a $40-million fraud case Thursday, was accused of bogus tests. He says he's innocent.

October 11, 2003|Tim Reiterman | Times Staff Writer

A Los Angeles man indicted this week in an alleged $40-million health-care fraud scheme was charged last year with billing the state's health-care program for the poor another $12.5 million for bogus laboratory tests, the man's attorney said Friday.

But Larry M. Bakman said that he believed the amounts of the losses to the California Medical Assistance program were grossly exaggerated and that his client, Khaled Ahmed, provided the services for which he charged the government.

Ahmed, who owned half a dozen medical clinics, three pharmacies and a laboratory in the late 1990s, said, "All I can tell you is I am innocent of all this. I have done nothing wrong....

"It makes you sound like you are the richest man in Los Angeles," he said Friday. "We have not received even a fraction of this money."

A grand jury indictment Thursday in Sacramento alleged that Ahmed, 41, and his wife, Sandra Cervantes, 31, stole the identities of doctors and patients so they could falsely bill Medi-Cal and the state's family planning program more than $40 million for contraceptives, drugs and lab tests as well as services that were not provided or were provided by unlicensed medical personnel.

Many patients, the indictment said, were recruited at health fairs in the Huntington Park area, where Ahmed set up mobile clinics and offered gifts and services as incentives to sign up for the family planning program.

The U.S. attorney's office in Sacramento said Ahmed and Cervantes could face up to 10 years each in prison if convicted. The offenses allegedly occurred from 1996 to mid-2000.

Cervantes, who helped run the clinics, could not be reached for comment, but Ahmed said his wife "is equally innocent."

The clinics -- three in Huntington Park and three in Los Angeles -- have long been closed, said Lea Brooks of the state Department of Health Services.

Ahmed said the pharmacies are also shut, and records show that in 2000 the state Pharmacy Board revoked his pharmacist's license but stayed that action and put him on probation, with a 40-day suspension.

Bakman said that although he had not yet been able to review Thursday's indictment, there appeared to be so many similarities to the earlier charges that a second indictment was unnecessary. "Same defendant, same [alleged] course of conduct; and the same businesses" were involved, he said.

In the first case, the attorney said, he believes that the amount billed to Medi-Cal was actually less than a quarter of the $12.5 million alleged and that the loss was inflated because the government added up claims that were submitted multiple times but not paid.

"There were real patients, and services were provided," he said, noting that Ahmed has pleaded not guilty. "What I have seen at this point leads me to believe there was no misconduct."

The federal prosecutor could not be reached Friday, and the FBI and the health department, which investigated the cases, declined to comment.

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Times staff writer Jocelyn Stewart contributed to this report.

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