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California Briefing / Los Angeles

Hospital official pleads guilty in kickback case

March 19, 2009|Richard Winton

The former senior vice president of City of Angels Medical Center pleaded guilty Wednesday to paying illegal kickbacks to recruiters who referred homeless patients from skid row to the hospital, where they received unnecessary health services.

Dante Nicholson, 51, of Palmdale was the third person convicted in a widespread scheme to pay illegal kickbacks and defraud Medicare and Medi-Cal by recruiting homeless people from skid row in downtown L.A..

Appearing before U.S. District Judge George H. King in Los Angeles, Nicholson pleaded guilty to two counts of paying illegal kickbacks. In a plea agreement, Nicholson admitted participating in a scheme to pay recruiters to refer homeless people with government medical benefits to City of Angels for hospital stays.

City of Angels billed Medicare and Medi-Cal for inpatient services provided to the homeless recruits, including procedures for which hospitalization was medically unnecessary, said Assistant U.S. Atty. Vincent Farhat. The hospital tried to conceal the kickbacks by creating sham "consulting" contracts.

The charges Nicholson pleaded to carry a maximum of 10 years in federal prison. Nicholson has agreed to pay more than $4.1 million in restitution to Medicare and Medi-Cal. Sentencing was set for Aug. 17.

In December, Rudra Sabaratnam, the former chief executive of City of Angels, pleaded guilty to paying illegal kickbacks for patient referrals.

Estill Mitts, who operated a downtown center that recruited homeless people to receive unnecessary health services, pleaded guilty in September to conspiracy to commit several federal crimes. Robert Bourseau, a former chairman of the board and co-owner of the hospital, has also been indicted and remains in custody without bond.

Sabaratnam and Mitts are also scheduled to be sentenced Aug. 17. Prosecutors said the case against Nicholson and the other defendants is part of an ongoing investigation by multiple agencies.

-- Richard Winton

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