Health Insurance Scam Fails; Three Indicted in California for Attempting to Bilk $50M

You don’t have to be a Nigerian prince or a late night hacker to try to pull off a confidence scheme. In Santa Ana, Calif., three people were charged with being involved in a fraudulent health insurance scam designed to bilk reimbursements for more than $50 million of unnecessary medical procedures.

A Grand Jury indicted Theresa Fisher, Vi Nguyen and Lindsay Hardgraves for allegedly luring patients to an Orange County, Calif. surgery center that they called Empire Surgical Center or Vista Surgical Center or Princess Cosmetic Surgery depending on the details of the scam they were doing.

According to the indictment:  “As a result of the fraudulent scheme, defendants Nguyen, Fisher and Hardgraves caused losses to union and PPO healthcare benefit programs of more than $50 million in claims for functional procedures that were not medically necessary and in some cases not provided.”

The indictment details how prosecutors believe the trio met with patients and explained to them that they could get free or discounted cosmetic procedures if they underwent surgeries and allowed the surgical center to bill their insurance companies for those covered medical procedures. Unfortunately, procedures such as endoscopies, colonoscopies and cystoscopies were performed unnecessarily. However once the insurance was billed for those covered procedures, the patients were offered free or discounted elective cosmetic procedures(such as tummy tucks) that are generally not covered by insurance.

Nguyen and Fisher were consultants at the surgery center and Hardgraves handled marketing for the company. Nguyen was charged with 10 counts of mail fraud, while Fisher is facing five counts of mail fraud and Hardgraves is charged with two counts of mail fraud. If convicted, the defendants will face up to 20 years in federal prison for each count of mail fraud.

If you believe you have information about fraudulent behavior, you may have a whistleblower claim. Contact the experienced qui tam attorneys at Begelman & Orlow, P. C. for a consultation about your case.