Goldstein: 2 Doctors Accused Of Scamming Medicare Using Mentally Ill

By David Goldstein

LOS ANGELES (CBS) — Two Southern California doctors are arrested for allegedly bilking Medicare out of millions of dollars. The scheme involved recruiting mentally ill people as patients.

This 72-year-old looks like anyone's grandmother -- but investigators say Dr. Eleanor Santiago has participated in a scheme to bilk Medi-Cal and Medicare out of millions of dollars in taxpayer money.

"Doctor, how much money have you made off Medicare fraud over the past few years?"

"I don't know."

"Have you been defrauding Medicare by writing prescriptions?"

"I write prescriptions. But I have not been defrauding Medicare."

We had the only camera on scene as Dr. Santiago was arrested at her Irvine home -- charged with defrauding the Medi-Cal program.

Police say Dr. Santiago wrote as many as 70 bogus prescriptions a day for the pain killer Oxycontin, a dangerous narcotic. With taxpayer's footing the bill, according to undercover detective Steve Offerman.

"We know Dr. Santiago has written 7000 Oxycontin prescriptions in a year so the cost to Medicare for those in in the millions."

Investigators say Dr. Santiago worked out of this office in this building on Victory Boulvard in North Hollywood. But her patients mainly cae from Long Beach. Consisting of mentally-challenged individuals.

Police say recruiters would find the patients, who many times were mentally ill. The doctor would allegedly write prescriptions which were filled and then re-sold back to the clinic.

"OK."

Also arrested for the same charge, Dr. Rodney Barron of Bel Air. Six others, including office workers, were also named in a criminal complaint from the City Attorney's office.

"Is it true that there was a medical fraud involved?

"Not that I'm aware of."

Detectives say the clinic's were run by Artur Manasarian, who was also charged.

Manasarian was arrested by the feds two weeks ago, in a nationwide crackdown on Medicare fraud run by organized crime. They say the same groups are involved here.

Our Eurasian organized crime element is making all the money. These physicians are just a small pawn in their scheme."

A small pawn, but the key to defrauding taxpayers out of millions of dollars.

David Goldstein, CBS 2 News.