Authorities raided a busy downtown Los Angeles maternity clinic Wednesday, arresting two physicians and three administrators on suspicion of defrauding the Medi-Cal program of $2 million by recruiting thousands of poor, pregnant women for unnecessary medical procedures.
The arrests at Downtown M Medical Clinic at 2500 Wilshire Blvd. culminated a two-year investigation by the Medical Board of California, which began looking into the clinic after former employees complained of illegal billing.
According to a spokesman for state Atty. Gen. Jerry Brown, clinic operators bribed expectant mothers with $30 cash, bassinets, strollers and other baby accessories so that they would submit to unnecessary prenatal services -- often under a false name.
The clinic billed the Medi-Cal program, which serves low-income people, between $100 and $500 per patient for the bogus services, authorities said.
"These are people abusing their trust as physicians and recipients of taxpayers' money intended for vulnerable people without significant means," Brown said Wednesday. "From a moral point of view, this is egregious."
Those arrested at the clinic include the owner, Dr. Peter Shrier; Dr. Anna Gravich; Gravich's husband, Gersha Gravich; and another married couple, clinic administrators Arkady and Ella Rozenberg.
They face charges of grand theft, theft and presenting false Medi-Cal claims, according to Los Angeles County Superior Court records. After court hearings Wednesday, the five were being held at Los Angeles detention facilities on $200,000 bail each, according to court records.
Eleven other clinic employees, mostly patient recruiters, also face arrest, authorities said.
Shrier purchased the clinic in 2005. Authorities allege that he and other managers hired people to recruit women outside the facility. For each patient, recruiters received $100, investigators said.
Clinic records showed that since 2005, the clinic billed Medi-Cal for 8,000 patients. Although Medi-Cal records are reviewed and audited by the state, the clinic didn't draw attention. Managers were careful to list fictitious treatment sessions of varying lengths, knowing that too many identical reports would raise a red flag, former clinic staff members told investigators.
Shrier and Anna Gravich have been licensed by the California Medical Board for more than 20 years.
Shrier, 66, of Sherman Oaks graduated from the University of Vermont's medical school in 1966. California Medical Board records showed he was a licensed physician and surgeon with no disciplinary action.
Gravich, 60, of Los Angeles graduated from Moscow State Pirogov Medical Institute in 1972, and was a licensed physician and surgeon according to California Medical Board records. She was placed on probation in 1997 after she was charged with income tax evasion. She later pleaded guilty and was placed on six months home detention. She completed three years' probation in May 2004.
Abraham Arredondo, Brown's deputy press secretary, said investigators have not arrested any clinic patients, whose identities they are still trying to verify.
One former patient, also a former clinic employee, said she quit last year after watching patients return to receive treatment using false names.
"Everybody knew what was going on," said the woman, who asked not to be identified for fear she would be charged in connection with the investigation.
Maray Ruiz, 19, said she first came to the clinic two months ago for a pregnancy test.
"A friend told me they would pay me $30 if I came here," Ruiz said as she stood outside the clinic Wednesday.
Ruiz, who is about two months pregnant, said she came to the clinic to pick up pills that were prescribed, but instead of staff, she found state Department of Justice agents hauling out boxes of files. "I was surprised when we saw the cops here," Ruiz said.
To report Medi-Cal fraud, contact the state attorney general's office public inquiry unit at (916) 322-3360.
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