The FBI served search warrants on City of Angels Medical Center, Los Angeles Metropolitan Medical Center, and Tustin Hospital and Medical Center as part of a Medicare and Medi-Cal fraud investigation. A lawsuit filed by the city of Los Angeles against the hospitals alleges that the hospitals recruited homeless souls, including drug addicts and the mentally ill, from Skid Row as patients. The hospitals are then alleged to have billed government programs for phony care for these folks. Indeed, one operator of a Skid Row health center is alleged to have accepted $20,000 per month in kickbacks for the Skid Row referrals. “Human pawns” is the term the lawsuit uses in describing the use of the homeless in the scam. In exchange, the homeless received food, cigarettes, and cash for their round trips to the hospitals.The lawsuit alleges the homeless were transported into the hospitals, asked to fill out forms, and then taken back to Skid Row. They would go back many times and would sign forms indicating that they were eligible for Medicare and Medi-Cal and that they had received expensive diagnostic testing. One woman indicated that she had been in all three of the hospitals, diagnosed with “shortness of breath,” but never given any treatment. However, the records indicate that the hospitals submitted for reimbursement for expensive testing, testing that she did not have.Â
The FBI has arrested one CEO as well as a director of a Skid Row health assessment center. The U.S. Attorney filed an indictment against the two that charges them giving and receiving kickbacks, money laundering, tax evasion, and, of course, health care fraud. More indictments are looming.Â
The investigation began when a worker at Union Rescue Mission in Los Angeles noted that pattern of vans and cars being loaded up with homeless folks who could show their Medi-Cal eligibility cards. Scott Johnson, the worker, called the state authorities in 2004 when he saw some of the homeless shoved into the trunks of the cars for transport to the hospitals.Â
By 2006, federal authorities had captured the “loading up” practices on video. The investigation was a complicated one because agents had to wade through complex arrangements, shell companies, bogus contracts, and, of course, the complex transfer of kickbacks,
About mmjdiary
Professor Marianne Jennings is an emeritus professor of legal and ethical studies from the W.P. Carey School of Business at Arizona State University, retiring in 2011 after 35 years of teaching undergraduate and graduate courses in ethics and the legal environment of business. During her tenure at ASU, she served as director of the Joan and David Lincoln Center for Applied Ethics from 1995-1999. In 2006, she was appointed faculty director for the W.P. Carey Executive MBA Program. She has done consulting work for businesses and professional groups including AICPA, Boeing, Dial Corporation, Edward Jones, Mattel, Motorola, CFA Institute, Southern California Edison, the Institute of Internal Auditors, AIMR, DuPont, AES, Blue Cross Blue Shield, Motorola, Hy-Vee Foods, IBM, Bell Helicopter, Amgen, Raytheon, and VIAD.
The sixth edition of her textbook, Case Studies in Business Ethics, was published in February 2011. The ninth edition of her textbook, Business: lts Legal, Ethical and Global Environment was published in January 2011. The 23rd edition of her book, Business Law: Principles and Cases, will be published in January 2013. The tenth edition of her book, Real Estate Law, will also be published in January 2013. Her book, A Business Tale: A Story of Ethics, Choices, Success, and a Very Large Rabbit, a fable about business ethics, was chosen by Library Journal in 2004 as its business book of the year. A Business Tale was also a finalist for two other literary awards for 2004. In 2000 her book on corporate governance was published by the New York Times MBA Pocket Series. Her book on long-term success, Building a Business Through Good Times and Bad: Lessons from Fifteen Companies, Each With a Century of Dividends, was published in October 2002 and has been used by Booz, Allen, Hamilton for its work on business longevity. Her latest book, The Seven Signs of Ethical Collapse was published by St. Martin’s Press in July 2006 and has been a finalist for two book awards.
Her weekly columns are syndicated around the country, and her work has appeared in the Wall Street Journal, the Chicago Tribune, the New York Times, Washington Post, and the Reader's Digest. A collection of her essays, Nobody Fixes Real Carrot Sticks Anymore, first published in 1994 is still being published. She has been a commentator on business issues on All Things Considered for National Public Radio.
She has served on four boards of directors, including Arizona Public Service (1987-2000), Zealous Capital Corporation, and the Center for Children with Chronic Illness and Disability at the University of Minnesota. She was appointed to the board of advisors for the Institute of Nuclear Power Operators in 2004 and served on the board of trustees for Think Arizona, a public policy think tank. She has appeared on CNBC, CBS This Morning, the Today Show, and CBS Evening News.
In 2010 she was named one of the Top 100 Thought Leaders in Business Ethics by Trust Across America. Her books have been translated into four different languages. She received the British Emerald award for authoring one of their top 50 articles in management publications, chosen from over 15,000 articles.
Personal: Married since 1976 to Terry H. Jennings, Maricopa County Attorney’s Office Deputy County Attorney; five children: Sarah, Sam, and John, and the late Claire and Hannah Jennings.
