Skid Row scam artists had defrauded Medicare before

January 26, 2010 | Christina Jewett, California Watch

The Department of Justice announced a settlement yesterday against two Los Angeles health executives accused of paying recruiters to lure homeless people from the Los Angeles Skid Row and cycle them through a hospital where they stood to make a profit.

The settlement says the hospital bosses, Robert Bourseau and Dr. Randra Sabaratnam, owe the government $10 million. But the DOJ has been after the two men for nearly a decade.

Starting in 1997, Bourseau and Sabaratnam billed Medicare for unauthorized items, such as legal fees for a bankruptcy. The DOJ went after the men in 2003 in civil court for defrauding Medicare. The men appealed a 2006 judgment against them, and in mid-2008 were ordered by the Ninth Circuit to pay $15 million related to improper billing at their Chula Vista psychiatric hospital, called Bayview.

None of that stopped them, though, from travelling an hour north to Los Angeles and opening the City of Angels Hospital. According to court documents, Bourseau and Sabaratnam paid recruiters $500 for each homeless person they wrangled from Skid Row into the hospital where both had a financial stake.

From 2004 to 2008, Sabaratnam and Bourseau paid $486,000 to others who rounded up patients for an ambulance ride to the hospital, court records say. Homeless people were promised "three hots and a cot,” court records say, referring to hot dogs and bed to sleep on. In turn, Sabaratnam and Bourseau billed Medicare and Medi-Cal for more than $4 million in hospital stays and diagnostic tests for patients who, in many cases, didn’t need them, a prosecutor said.

“What’s horrible about what was done here is defendants literally trafficked homeless people in order to make money from Medicare,” said assistant U.S. Attorney Vince Farhat, a prosecutor in the criminal case.

Farhat said the men still owe the government millions from the San Diego case, in addition to $10 million for the settlement announced yesterday. The only hope for the government to collect, he said, is for the new owner of the former City of Angels Hospital to turn a profit and pay off the loan to Bourseau and Sabaratnam, which in turn, should go to restitution.

In the meantime, Farhat said the case of the Skid Row patient recruiting is moving ahead with more news to come.