Federal investigators have seized more than $100 million from the owners of 1-800-GET-THIN, the intensely marketed and highly popular company that provided Lap-Band weight-loss surgery, according to The Los Angeles Times. The seizure, which has been criticized by defense lawyers, is part of an ongoing investigation into the company's billing practices.
Although federal prosecutors have not brought charges against the company, a recent court motion indicated that the money is "traceable to a long-term fraud scheme," according to the LA Times. The money was seized last June from accounts linked to former owners of the company, brothers Michael and Julian Omidi and their mother Cindy, but the family's attorney is fighting to get it back. Various lawsuits against the company indicate that as many as five patients died during Lap-Band surgeries, but federal investigators have been focusing on the company's potentially fraudulent business practices.
A district judge recently dismissed a motion by the family's attorney to return the money, according to the newspaper, which led to criticisms from defense attorneys that believe taking a large amount of money goes beyond the government's reach.
"There are certain constitutional protections people have against unreasonable search and seizure," Philip Hilder, a former federal prosecutor turned white-collar defense attorney in Houston, told the paper. "While they might have the right to file the seizure warrant, they just can't do it indefinitely without following up with a civil action or moving the seized items into the criminal case."
In September, UnitedHealth Group Inc. filed a lawsuit against 1-800-GET-THIN, alleging that the company overbilled the insurance company $40 million for surgeries that were unnecessary, ineligible or never performed. In 2012, Anthem Blue Cross launched a fraud investigation against the company, joining Aetna in helping authorities determine whether the company's advertisements were misleading.
- here's the Los Angeles Times article