Hospital Majors’ Arrested In Fraudulent Billing Scandal

In a conspiracy that provided recruitment to homeless people as phony patients and thereafter illegally billing Medicare and Medi-Cal for services, the FBI agents today arrested the CEO of City of Angels hospital, Rudra Sabaratnam along with Estill Mitts, the operator of a Skid Row health assessment center

Fake Medicare and Medi-Cal bills were submitted for reimbursement by the hospitals in Los Angeles and Orange counties for services provided to homeless patients - including drug addicts and the mentally ill. The homeless people were recruited from "Skid Row", FBI investigations unearthed.

People with minor problems such as dehydration, exhaustion or yeast infections and in fact, did not require hospitalization were allegedly admitted to hospitals for as long as three days and billed the government for the stays.

Search warrants were served at City of Angeles Medical Center, Los Angeles Metropolitan Medical Center and Tustin Hospital and Medical Center as a result of their investigation, FBI spokeswoman Laura Eimiller revealed

Expecting additional charges in the case, U.S. Attorney Thomas O'Brien said, “This is one of several major medical fraud investigations that are ongoing. There's too much money being illegally stripped from public health care programs and the potential impact to those with a legitimate need is too great to let such fraud escape federal prosecution."

While Sabaratnam is also charged with paying kickbacks, Mitts has charges linked to money laundering and tax evasion, against him.

If found guilty on all charges, Sabaratnam could face 50 years in federal prison, and Mitts could face 140 years, authorities said.