For five years a Long Beach company called Pacific Care Medical Supply billed the government's Medicare program for power wheelchairs, hospital beds and other medical supplies for elderly patients.
But there was a problem: Most of the time physicians never ordered the equipment, and patients never received it, according to government prosecutors.
The alleged $2.4 million scam qualifies as garden variety for Southern California, which federal officials have labeled as one of the top two regions for health care fraud in the nation.
Now the U.S. Attorney's Office in Los Angeles has established a unit that will focus on prosecuting health care fraud, joining in a crackdown already under way by other agencies.
"We could double or triple the number of prosecutors on this, and we would still be understaffed," said Assistant U.S. Attorney Consuelo Woodhead, who is heading the three-attorney unit. "We talk to people who say they have been in the health care fraud business for a decade."
Atim Okorn, a 49-year-old Chino resident who owns Pacific Care, is the first to be prosecuted under the crackdown. He was arrested earlier this month on Medicare fraud and is being held without bail. His attorney declined comment.
His arrest follows a number of high-profile health care fraud investigations conducted in Southern California by the FBI, the Office of the Inspector General of the Health and Human Services Agency and other state and federal investigators.
They include the October indictment of the owners and employees of a Santa Ana surgery center who are accused of inducing patients from around the country to have unnecessary surgeries in exchange for cash and vouchers for plastic surgery. More indictments are expected.
Over the last four years, around 400 people have been arrested statewide as part of operation Durascam, which targeted durable medical suppliers and laboratories believed to be submitting bogus Medicare claims.
"The more resources we devote to fighting health care fraud, the more we find," said Don White, a spokesman for the Inspector General, which investigates fraud in the government Medicare and Medicaid programs. "It's like a bottomless pit."
Prior to the formation of the unit which will focus on criminal violations prosecutions of health care fraud was conducted by different attorneys in the Public Corruption and Government Fraud section of the office.
But it was hard for any of the two-dozen or so prosecutors to develop any significant experience in the complicated arena, said Pamela Johnston, a supervising prosecutor in the Los Angeles office.
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