The former owner of the now-closed Pacific Hospital of Long Beach pleaded not guilty Monday in Santa Ana in what could be the largest case of medical fraud in U.S. history.
Michael Drobot was charged in February for allegedly taking millions of dollars in kickbacks in exchange for patient referrals who received spinal surgeries.
Drobot was expected to formally plead guilty sometime soon, according to the Press-Telegram.
According to prosecutors, the referrals led to more than $500 million in bills which were fraudulently submitted and paid by the California worker’s compensation system.
The scheme allegedly involved California State Senator Ron Calderon and his brother, Tom Calderon.
Ron and Tom Calderon face federal corruption and conspiracy charges. Federal prosecutors allege that Ron Calderon accepted $28,000 in bribes from Drobot in exchange for supporting legislation that “delay or limit changes in California’s workers’ compensation laws relating to the amount of medical care providers are reimbursed for performing spinal surgeries.”
Drobot was not indicted in the Calderons’ corruption case, but admitted to paying bribes to the senator, the FBI said.
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As part of a plea agreement, Drobot has agreed to cooperate with the government’s ongoing investigation of the health care fraud scheme, as well as the government’s prosecution of the Calderon brothers.