Ten people have been indicted in a scheme to fraudulently bill Medicare for $24 million worth of unnecessary medical supplies, federal officials said Thursday.
The defendants, most of whom worked for United Medical Supply in Huntington Beach, are accused of convincing Medicare beneficiaries in the Korean and Vietnamese communities to visit doctors with promises of "free milk" and wheelchairs. Once there, they would get prescriptions for products they didn't need, authorities allege. The company would then bill Medicare for the items, mostly liquid nutrition supplements and motorized wheelchairs, they allege.
"Sometimes the patient would get the product and sometimes not. In all cases, [the prescription] was totally unnecessary," said U.S. attorney's office spokesman Thom Mrozek in Los Angeles.
Medicare paid $14 million of the $24 million in claims United Medical Supply submitted.
Seven of 10 defendants were arrested Thursday, each charged with 35 counts of healthcare fraud. A single count carries a maximum sentence of 10 years. All 10 were indicted Wednesday in U.S. District Court in Santa Ana.
Phu Luong, 50, owner of United Medical Supply, faces an additional five counts of money laundering. Authorities say Luong spent proceeds from the alleged fraud on items such as a $185,575 yacht and a $1.7-million down payment on a house. He also racked up $120,000 in gambling debts at a Las Vegas casino, authorities said.
Also named in the indictment are: Sareth Tath, 55, of Long Beach; Mo Thi Pham, 49, of Westminster; Vu Nguyen, 33, of Santa Ana; Truc Duong, 37, Khanh Duong, 31, and Vu Nghi, 47, all of Garden Grove; Dr. Derrick Hubbard, 45, of Atlanta, formerly of Los Angeles; Dr. Matthew Khatibloo, 71, of Fullerton; and Peter Kim, 81, of Los Angeles. All 10 will be arraigned April 11.