LOS ANGELES (CBSLA.com) — A Los Angeles man was ordered to pay close to $10 million in restitution and serve 18 months in federal prison for defrauding Medicare and Medi-Cal and exploiting thousands of homeless people in exchange for kickbacks from hospitals in L.A. and Orange County.
Estill Mitts, 68, pleaded guilty in 2008 to conspiracy to commit healthcare fraud, money laundering and tax evasion. He admitted taking more than $1 million in kickbacks from three hospitals that took in the illegally referred patients.
“A number of them were what’s known as ‘frequent flyers’ that came through time after time after time,” said Assistant U.S. Attorney Evan Davis, who told KNX 1070′s Claudia Peschiutta it was unknown if any were hurt as a result of the unneeded medical treatments.
The U.S. Attorney’s Office said sentencing was delayed while Mitts cooperated with the government’s investigation, which resulted in the conviction of nearly a dozen co-defendants.
Prosecutors said Mitts recruited patients through the Assessment Center, which he operated in downtown Los Angeles from 2004 to the fall of 2007. The center, also known as the 7th Street Christian Day Center, was not a medical clinic.
The scheme was discovered by authorities in 2006, after local law enforcement reported incidents of “patient dumping” in the skid row area of downtown L.A. The discharged patients reported they had been paid to go to a hospital.
Mitts admitted to receiving more than $1 million from City of Angels Hospital, Los Angeles Metropolitan Medical Center and Tustin Hospital and Medical Center in exchange for the illegal referral scheme, also known as “capping”.
“Defendant and others working for him would recruit homeless beneficiaries for in-patient hospital admissions whether or not such hospitalizations were medically necessary,” prosecutors wrote.
Mitts also admitted he failed to report more than $1 million in income in 2005 and 2006, which the government said resulted in a loss of nearly $350,000 to the IRS.
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