Sober Living Insurance Fraud Crackdown in Orange County - NBC Southern California

Sober Living Insurance Fraud Crackdown in Orange County

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    A task force crackdown on insurance fraud in the sober living home industry resulted in criminal charges against five doctors, two executives and four others accused in a scheme to recruit patients for risky opioid-blocking surgery, Orange County District Attorney Tony Rackauckas announced Wednesday.

    The physicians charged in the case are:

    -- Dr. David Michael Scarpino, 53, of Huntington Beach, who faces one count of conspiring in aiding and abetting the unauthorized practice of medicine and 19 counts of insurance fraud, with sentencing enhancement allegations of aggravated white collar crime exceeding $100,000

    -- Dr. Gary Lamont Baker, 54, of Tustin, who is charged with one count of conspiring in the unauthorized practice of medicine, five counts of insurance fraud and one count of assault with force likely to produce great bodily injury

    -- Dr. Fritz John Baumgartner, 61, of Rancho Palos Verdes, who is charged with two counts of conspiring in the unauthorized practice of medicine, four counts of rebates for referral, three counts of conspiracy to commit medical insurance fraud, five counts of insurance fraud and one count of assault with force likely to produce great bodily injury, with a sentencing enhancement for aggravated white collar crime exceeding $500,000

    -- Dr. Michael Henry Wong, 53, of Irvine, and Dr. Nabil Charle Morcos, 66, of Irvine, who are both charged with one count of conspiring in the unauthorized practice of medicine and 22 counts of insurance fraud, with a sentencing enhancement for aggravated white collar crime exceeding $100,000.

    Also charged are Thuy Rucks, 78, of Mission Viejo, the owner of SoberLife USA at 10900 Warner Ave. in Fountain Valley. He faces one count of unauthorized practice of medicine, four counts of unlawful offer or receipt of consideration by claims handler for referral, four counts of conspiracy to commit medical insurance fraud and three counts of insurance fraud, with a sentencing enhancement for aggravated white collar crime exceeding $100,000.

    Christianne Tiemann, an administrator for SoberLife USA, is accused of hiring "body brokers" who recruited prospective patients who were paid $1,000 to receive a surgical implant of Naltrexone, an opioid blocker. The 66-year-old Trabuco Canyon resident is charged with one count of unauthorized practice of medicine, four counts of unlawful offer or receipt of consideration by claims handler for referral, four counts of conspiracy to commit medical insurance fraud and three counts of insurance fraud.

    The defendants accused of recruiting patients are:

    -- Dylan James Walker, 27, of Huntington Beach, who is charged with 62 felony counts of false and fraudulent claims

    -- Harrison Anthony Romanowski, 27, of Huntington Beach, who is charged with 35 felony counts of false and fraudulent claims

    -- John T. Kahal, 67, of Dana Point, who is charged with 16 felony counts of false and fraudulent claims

    -- Jordan Tyler Hendrickson, 25, of Studio City, who is charged with 14 felony counts of false and fraudulent claims.

    The recruiters allegedly mined for patients at sober living homes and AA meetings, among other venues, Rackauckas said.

    Morcos and Scarpino are accused of failing to properly advise the patients about the risk and see if they were mentally prepared for the surgery, Rackauckas said.

    Baker, Baumgartner and Wong performed the procedures, he said.

    The county's top prosecutor said the experimental procedure is not approved by the Food and Drug Administration and that insurance companies were billed an average of $40,000 for the surgery. In some cases, methamphetamine addicts underwent the procedure even though Naltrexone does nothing to block stimulant drugs such as methamphetamine, Rackauckas said.

    Prosecutors allege $6.8 million in fraudulent claims were filed.

    Rackauckas said Orange County has become known as "Rehab Riviera," with many addicts coming to the region from out of state, and that sober living homes, which have quickly proliferated, are causing various nuisances in communities. He said he formed the task force to focus on the insurance billing, which he said helps financially fuel the industry.

    Efforts by cities to crack down on sober living facilities has proven difficult because of laws prohibiting discrimination against disabilities, Rackauckas said.

    Naltrexone is an effective medicine that helps addicts manage alcohol and opioid dependency, but the FDA approves it in tablet or liquid form that is injected, Rackauckas said. The surgical implant is not federally approved, he added.

    "It's entirely experimental," Rackauckas said. "There's no study as to the efficacy of this procedure."

    Some of the patients developed "serious" side effects from the surgery, Rackauckas said, declining to provide specifics at this time.

    In an experimental surgery, the patient usually undergoes a lengthy interview with medical professionals to make sure he or she is well informed and prepared, Rackauckas said. In these cases, however, he said patients were given "a very short interview ... not even close to what's done before an experimental surgery."

    He was joind by Orange County Supervisors Lisa Bartlett and Michelle Steel, who said they are working to draft a county ordinance cracking down on sober living facilities.

    "Substance abuse is an epidemic," Bartlett said. "Some businesses are promoting a life-threatening experimental procedure not approved by the FDA to line their pockets."

    Rackauckas said some sober living facilities lure clients to Orange County, "max out their insurance" and then kick them out, contributing to the local homeless problem.

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