Monday, March 23, 2009

Kickback Charges Results In Guilty Plea By Former Hospital Executive

On March 18, 2009, Dante Nicholson, former senior vice president of City of Angels Medical Center appeared before United States District Judge George H. King in Los Angeles. Nicholson pleaded guilty to two counts of paying illegal kickbacks. Nicholson has agreed to pay over $4.1 million in restitution to Medicare and Medi-Cal.

In a plea agreement, Nicholson admitted to participating in an arrangement to pay recruiters to refer homeless people from "Skid Row" with Medicare and Medi-Cal benefits to City of Angels for in-patient hospital stays. As part of this arrangement, City of Angels entered into sham “consulting” contracts intended to conceal the illegal kickbacks. City of Angels then billed Medicare and Medi-Cal for in-patient services to the recruited homeless beneficiaries, including those for whom in-patient hospitalization was not medically necessary.

Nicholson and a second City of Angels executive – Robert Bourseau, a former chairman of the board and co-owner of the hospital – were indicted and remains in custody without bond.

Nicholson was named in the second indictment brought in the investigation into health care fraud related to Skid Row residents. In December 2008, Rudra Sabaratnam, the former chief executive officer of City of Angels pleaded guilty to paying illegal kickbacks for patient referrals. Estill Mitts, who operated a center that recruited homeless people to receive unnecessary health services, pleaded guilty in September 2008 to conspiracy to commit several federal crimes. Sabaratnam and Mitts are scheduled to be sentenced by Judge King on August 17.

The charges to which Nicholson pleaded guilty carry a statutory maximum penalty of 10years in federal prison. Judge King ordered Nicholson to appear for sentencing on August 17.

Commentary: This is still an ongoing investigation and with this guilty plea by Mr. Nicholson and others, there is a likelihood that one can expect further indictments.

Any questions or comments should be directed to:  Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals and businesses in civil, business, administrative and criminal proceedings, with a specialty in health care providers.


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