Discounted Cosmetic Surgery Concealed $50 Million Insurance Scam

Discounted Cosmetic Surgery Concealed $50 Million Insurance Scam
 
        SANTA ANA, California –A federal jury has convicted two Southern California residents in connection with a scheme to defraud union and private health insurance programs by submitting bills for more than $71 million – and receiving over $50 million in payments – for medically unnecessary procedures performed on insurance beneficiaries who received free or discounted cosmetic surgeries. 
        A large number of the fraudulent claims were submitted to the International Longshore and Warehouse Union and Operating Engineers Union health insurance plans. Other victim insurers included Aetna and Anthem.
        The two defendants found guilty yesterday are:
  • Theresa Fisher, 45, of Tustin, who was found guilty of five counts of mail fraud; and
  • Lindsay Hardgraves, 30, of San Pedro, who was found guilty of two counts of mail fraud.

 

        The evidence presented during a six-day trial showed that members of the scheme lured insured “patients” to a surgery center in Orange with promises that they could use their union or PPO health insurance plans to pay for cosmetic surgeries, which are generally not covered by insurance. The surgery center was known at various times as Princess Cosmetic Surgery, Vista Surgical Center, and Empire Surgical Center.
        Marketers such as Hardgraves referred “patients” to the surgery center, where they were told they could receive free or discounted cosmetic surgeries if they underwent multiple, medically unnecessary procedures that would be billed to their union or PPO health care benefit program. Fisher was a consultant at the surgery center who scheduled procedures after telling the “patients” about the free cosmetic procedures they could receive and coaching them to fabricate or exaggerate symptoms so that their medical procedures would be covered by their insurance.
        The unnecessary procedures typically performed on the “patients” were endoscopies (usually sophagogastroduodenoscopies, or EGDs), colonoscopies and cystoscopies. Once the health care benefit program paid the claims, the patients were given free or discounted cosmetic surgeries, including “tummy tucks,” breast augmentations and liposuction. In some cases, the surgery center simply billed cosmetic procedures (such as tummy tucks) as if they were medically necessary procedures (such as hernia surgeries).
        Fisher and Hardgraves are scheduled to be sentenced by United States District Judge Josephine L. Staton on May 29.
        A third defendant in this case – Vi Nguyen, 31, of Placentia, another consultant at the surgery center – pleaded guilty in January to four counts of mail fraud and faces sentencing before Judge Staton on July 10.
        At sentencing, each defendant faces a statutory maximum sentence of 20 years in federal prison for each count of mail fraud.
        This case is the product of an ongoing investigation by the Federal Bureau of Investigation, the United States Department of Labor – Office of Inspector General, the United States Department of Labor – Employee Benefits Security Administration, and the Office of Personnel Management – Office of Inspector General.
 

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