Fraud scheme involving homeless brings $10M false claims settlement

The two former owners of City of Angels Medical Center in Los Angeles have agreed to pay $10 million to settle False Claims allegations that they provided unnecessary medical services to homeless patients in a bid to bilk Medicare and Medi-Cal. Businessman Robert Bourseau and Dr. Rudra Sabaratnam also pleaded guilty to criminal charges in violation of the federal anti-kickback statute. Both await sentencing. 

The well-documented scheme allegedly consisted of City of Angels paying "recruiters" at homeless shelters in the skid row portion of Los Angeles to bring homeless people to the facility for medical treatment, regardless of their true medical needs. The hospital then billed Medicare and Medi-Cal for the services, according to the government's complaint. 

"Performing unnecessary medical procedures just to take money from taxpayers' pockets is bad enough, but to prey on homeless people struggling to survive day to day is particularly reprehensible," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "We won't tolerate illegal conduct and we will continue to hold companies, institutions and individuals accountable for healthcare fraud." 

To learn more:
- read this press release

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