Nation’s biggest healthcare fraud probe nets 301 people, including 22 in Southern California

Several doctors, a psychiatrist and a pharmacist were among 22 people in Southern California charged as part of a nationwide investigation into federal healthcare fraud schemes that frequently targeted military families and cost taxpayers hundreds of millions of dollars, the U.S. Justice Department announced Wednesday.

The investigation resulted in the largest such enforcement action in U.S. history, netting more than 300 people nationwide and involving more than $900 million in fraudulent billings, officials said.

In Southern California, five physicians were among those arrested in cases involving $125 million in elaborate fraud schemes that targeted Medicare and the military’s medical plan and involved medical billing, unnecessary procedures and high-priced specialized compound medications.

The charges in 13 criminals cases filed in federal courts in Los Angeles and Santa Ana include conspiracy, money laundering, kickback schemes and identity theft, according to several federal indictments.

“Those charged in cases unsealed this week include one doctor who allegedly performed medically unnecessary procedures at his offices in Temecula and Mira Loma. And he submitted nearly $12 million in bills to Medicare,” U.S. Atty. Eileen M. Decker said.

That physician was named in the federal charges as Dr. Donald Woo Lee. The 50-year-old physician is accused of performing unnecessary vein procedures on patients even when they had no signs of varicose veins.

The other doctors charged are David Michael Jensen, 65, of Whittier; Kain Kumar, 52, of Encino; Sang Kim, 67, of Porter Ranch and Samuel Albert, 81, of Laguna Beach.

None of the physicians could be reached for comment.

Most losses in Southern California are tied to five cases involving compounding pharmacies, which combine different medications into one drug, Decker said. The scams are orchestrated by marketers known as “cappers,” who recruit patients and sometimes use their identity to obtain government medical funding.

Decker said compounding pharmacies were provided with scores of prescriptions, generally for pain medications, that carried huge reimbursements, often more than $15,000 for each prescription.

The prescriptions were written for “patients” who, in many cases, did not want the medicines, had never met the prescribing doctors or had no idea why they were receiving the medications, Decker said.

Tricare, the military’s managed care program, was the primary target of schemes involving the compounding pharmacies, Decker said. “Prescriptions were written for profit rather than to treat the patient,” Decker said.

One marketer John Garbino, 46, of Dana Point, was charged with receiving illegal kickbacks. A Palmdale pharmacy working with Garbino allegedly received more than $46 million from Tricare in a six-month period ending in May 2015, court records show.

In another scheme, Dr. David Michael Jensen, 65, of Whittier, owner a La Mirada pharmacy Valley View Drugs Inc., was indicted along with two marketers on charges of paying and receiving illegal kickbacks.

Health insurers paid the pharmacy more than $20 million, and the pharmacy paid nearly half of that to companies associated with the marketers, according to the indictment.

“Patients were pawns in an alleged pay-for-play fraud scheme,” California Insurance Commissioner Dave Jones said.

Anthony J. Orlando, acting special agent in charge of the Internal Revenue Service’s criminal investigation unit, said in one scheme the proceeds were laundered using a carwash, a plumbing business and an escrow company.

Most of those charged in Southern California were arrested Monday and Tuesday. Several turned themselves in to authorities.

Two others remain at large and are believed to be overseas, officials said.

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richard.winton@latimes.com