Two orthopedic surgeons and the former chief financial officer of a California hospital were among those charged in connection to illegal kickback schemes that brought in almost $600 million, according to the U.S. Department of Justice. The case, named "Operation Spinal Cap" by the authorities, involved referring thousands of cases for spinal surgery to the Pacific Hospital in Los Angeles as fraudulent claims and has resulted in the charging of five men.
Over a period of eight years, thousands of operations were billed by Pacific Hospital of Long Beach and Tri-City Regional Medical Center to California's worker's compensation system and the federal government. "Injured workers were treated like livestock by doctors and hospitals who paid or accepted kickbacks and bribes in exchange for referrals," California Insurance Commissioner Dave Jones said in a statement. He referred to the case as "one of the largest workers compensation insurance fraud cases we have ever seen."
The former owner of the hospital, Michael Drobot, pleaded guilty to his part in the operation last year, according to Reuters. Drobot also implicated former Democrat state Senator Ron Calderon in the scheme, with Calderon allegedly having accepted $100,000 in exchange for maintaining legal loopholes. Calderon has also been accused of taking bribes in order to push legislation from undercover FBI agents posing as Hollywood movie executives, claims against which he pleads innocent.
Two of the defendants have already pleaded guilty with federal charges with the remaining three expected to follow suit in the coming weeks, a U.S. Attorney's spokesman, Thom Mrozek, said. All five, two of whom are surgeons, will face prison time under the terms of their plea agreements as well as being ordered to pay restitution, Mrozek said.
The charges levied against the five men include money laundering, referring patients in exchange for a monthly retainer, committing mail fraud and violating the Travel Act, as stated by the Department of Justice.
