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2 more charged in surgery probe

June 28, 2008|Christine Hanley | Times Staff Writer

An attorney and an accountant have been charged in an alleged medical insurance scam in which thousands of patients across the U.S. were allegedly recruited to undergo unnecessary procedures at a Buena Park surgical center in exchange for cash or gifts.

Yorba Linda attorney Roy Chester Dickson, 60, and Rosemead accountant Andrew Robert Harnen, 54, were named in an indictment unsealed Friday, after an Orange County Grand Jury investigation into the alleged "rent a patient" scheme operated out of the Unity Outpatient Surgery Center, which is now closed.

Dickson and Harnen were each ordered held on $2-million bail.

The indictment brings to 19 the number of doctors, administrators, recruiters and others charged in the case. Of the 17 other defendants, six have pleaded guilty and received sentences ranging from probation to 12 years in prison.

The operation aggressively recruited more than 2,000 patients from around the country to have unneeded procedures, including colonoscopies and what is generally regarded as a last-resort surgery for sweaty-palms disease, prosecutors said. The procedure involves collapsing a lung and clipping a nerve, they said.

In exchange, prosecutors said, the patients were rewarded with cash, vacations and cosmetic surgery, including tummy tucks and face-lifts.

An estimated $154 million in fraudulent claims were billed to insurance companies, prosecutors said.

"This case represented greed in its worst form -- people gambling with health in the name of cash," Orange County Dist. Atty. Tony Rackauckas said in a statement. "Every surgery could be fatal, and going under anesthesia is playing Russian roulette."

He said the physicians in the case acted like "real-life body snatchers."

Dickson is accused of using his attorney-client trust account to keep Unity operating and of funneling more than $1 million in surgery center assets into his account to prevent the money from being seized. He is also accused of laundering as much as $3 million into the trust account.

Harnen is accused of failing to report more than $6 million by filing false tax returns and of signing dozens of checks to pay doctors and recruiters.

Medical insurance fraud, including "rent a patient" and Medicaid scams, have long been a scourge in the United States. In one of the largest cases of its kind, about 400 people in California were arrested in the early 2000s as the FBI led a two-year crackdown on illegal kickbacks, false billing schemes and other healthcare fraud.

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christine.hanley@latimes.com

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