Pre-Filing Investigations

Published on: November 1, 2011

Glendale Medicare Fraud Ring Busted – 17 Accused, Including Glendale Doctor and San Marino Pharmacist

According to a October 28th report in Los Angeles Times, 17 people, including a pharmacist and physician, have been accused of Medicare and Medi-Cal fraud for participating in a sophisticated psychiatric drug recycling ring that bilked benefits programs out of millions of dollars and compelled the government to pay multiple times for the same stolen pills.

Apparently, so-called “runners” in the ring would obtain Medicare beneficiary cards illegally, either by buying them outright from Medicare and Medi-Cal recipients or by stealing them. Then they would use these cards to obtain prescriptions for expensive antipsychotic agents, like Zyprexa and Seroquel. According to q criminal complaint filed in U.S. District Court in Los Angeles last Thursday, the scam was sophisticated, intertwined, and quite organized.

After the runners filled the prescriptions and billed for them, they would then funnel the drugs back to the pharmacies that provided the drugs in the first place. Those pharmacies would then repackage, re-label and dispense the drugs, often to ring members using stolen Medicare cards.

Published on: October 18, 2011

Los Angeles Medicare Scam Alert! 14 People (Including Two Docs) Hit with Federal Charges

by Michael Kraut

Last Thursday, 14 people were indicted on federal charges of Los Angeles Medicare fraud, after billing Medical and Medicare for over $6 million in medical services that were either never performed or completely unnecessary.

The five-count indictment is against Lake Medical Group (based here in LA). The scam artists allegedly bilked insurance companies out of over $2.7 million in Oxycontin-related sub-scam. According to a Thursday report in the San Francisco Chronicle, so far 10 people have either surrendered or been placed under arrest. Pharmacist Theodore Yoon, as well as two doctors – Dr. Morris Halfon and Dr. Eleanor Santiago – were among those who allegedly conceived of and perpetuated this Los Angeles Medicare scam.

Here are the gory details, courtesy the San Francisco Chronicle article: “Investigators said the scam between August 2008 and February 2010 involved the clinic using recruiters known as “cappers” who brought in Medicare and Medical patients who were often issued a prescription for Oxycontin. They were offered up to $500 to get the prescriptions filled… Runners took the patients to pharmacies, including some run by Yoon… the clinic’s administrator was given the pills that were then sold on the street for roughly $25 a piece [the pills usually sell for around $6 each].”

Published on: September 4, 2011

Southern California Medicare Fraud Crackdown: It’s Real and Becoming More Vigorous

by Michael Kraut

Were you or a close family member or friend recently arrested and charged with Los Angeles healthcare fraud? If so, you are not alone.

According to recently released government statistics – thanks to the Obama administration’s efforts, federal healthcare fraud prosecutions spiked more than 85% in 2011 over 2010. The Transactional Records Access Clearinghouse (TRAC) statistics show that the federal government has prosecuted over 900 people so far this year for healthcare fraud. In all of fiscal year 2010, only 731 people were prosecuted across the U.S. The TRAC data suggest that prosecutions have spiked more than 70% from just half a decade ago.

A spokesman for the Justice Department, Alisa Finelli, confirmed the TRAC data analysis: “the trend certainly looks accurate and on track with our data.” Over the past 12 months, the Justice Department has brought out the heavy ammunition to nail executives, nurses, doctors, and other caregivers (e.g. chiropractors, dentists, etc.) for defrauding programs like Medicare and Medicaid. Here are some fraud arrest highlights from 2011:

Published on: July 5, 2011

Long Beach DUI Statistics: What Can They Really Tell Us?

by Michael Kraut

Ask anyone in law enforcement how to end the problem of Long Beach DUI, and they will tell you that we need better enforcement, more measurement of the problem, better education and tools for law enforcement, drivers, road engineers and policymakers. These are good points. And if we did indeed measure DUIs better with richer metrics, chances are we could see a decline in Pasadena DUI, Glendale DUI, Burbank DUI and Los Angeles DUI arrests. That being said, statistics may not be as useful as many bright-eyed and bushy-tailed pundits believe they are. As the old saw goes, “there are lies, damned lies and statistics.”

Case in point: consider a small story published in a Kansas newspaper, the Wichita Eagle, last week: “Wichita police see spike in DUI arrests.” Over a relatively non-special weekend, police saw a jump in DUI arrests of more than 50% – 31 arrests, up from the usual 21 DUI arrests for the weekend. Traffic accidents also increased from 70 to 98. This is a statistically significant shift, by any measure, and law enforcement officials and local prognosticators jumped on the story to immediately develop explanations for the surge. Wichita Eagle posited “there are lot of outdoor activities at this time of year… and that increases the opportunities for drunk driving to occur.” That said, the magazine concluded with this statement: “DUI arrests were made all over Wichita…and couldn’t be linked to any specific event.”

What if the surge was just a random fluctuation? Sounds impossible?

It turns out that statistics don’t work quite the way that most people believe that they do. In any given city, on any given weekend, one might expect a surprising surge – 50% or even more – as part of the random background statistical noise. In other words, the spike need not tie into any specific event because it really was random. It only appeared to have meaning because the statistics were considered just in the context of Wichita instead of in the context of the whole nation.

Think about it this way: say you were to flip a coin six times in a row. What are the odds that you flip heads each time? Here is the quick answer: 1 in 64 (1/2*1/2*1/2*1/2*1/2*1/2). If you pull out a coin and ever do this experiment, chances are pretty good (63 out of 64) that you will not get heads every time. But 1 out of every 64 readers of this blog post will! And to that person, this post may seem like magic. In fact, it’s not. Random events can look like something more than random when viewed out of context. Thus, the spike in Wichita DUIs might not have been anything at all. It might have been something… but there is not really a clean and clear way to tell.

The same thinking should apply to study of Long Beach DUI statistics.

On a more practical note, if you are in need of the services of an experienced Los Angeles criminal defense attorney, Long Beach’s Kraut Law Group Criminal & DUI Lawyers, Inc. (444 West Ocean, Suite 800 Long Beach, California 90802 Phone: (562) 531-7454) may be able to steer you in a good direction. Attorney Michael Kraut is an experienced prosecutor who is respected by legal peers and by major news media as a maven of Los Angeles DUI law. He can help you understand your rights, develop a strategy, and ensure that you make smart decisions going forward to protect your rights as a defendant.

Published on: June 13, 2011

Southern California Medicare Fraud Update: Armenian Mob “Vor” Kazarian gets Three-Year “Sweetheart Deal”

by Michael Kraut

Last Monday, Armen Kazarian, a “Vor” or “don” for the Armenian mafia, admitted in court that “I was involved in a criminal conspiracy,” including Southern California Medicare fraud.

Last October, federal investigators busted up Kazarian’s ring of 118 “phantom” clinics that allegedly made off with over $35 million in funds. All told, Kazarian and his co-conspirators tried to defraud the government out of around $160 million. 70 mobsters stand accused. So far, only Karen Aharonian and Rafik Terdjanain have pled guilty. The deal that the mob godfather developed with prosecutors generated heated debate on the blogosphere. According to the New York Daily News, Kazarian “admitted Monday to making threats and other crimes in exchange for the light (3-year) sentence. The final details of the plea were put off for a week.” Prosecutors who busted up the ring expressed their respect for the size and structure of the Armenian mob’s conspiracy, saying that it “put the traditional mafia to shame.”

Will busting up Kazarian’s ring fundamentally alter the game? When reports suggest that Medicare fraud losses top $60 billion a year, it’s hard to see how any individual busts — even of the size and scope of this crackdown — can have fundamental, game changing effects.

Published on: May 30, 2011

Is Los Angeles Medicare Fraud Destroying the Economy and Ruining Our Children’s Future?

by Michael Kraut

Politicians, pundits and “everyday Americans” alike are striving to stamp out Southern California Medicare, Medi-Cal and Medicaid fraud – and for good reason. Consider Massachusetts Republican Senator Scott Brown’s recent rant against fraud in the Medicare system: “The Government Accountability Office has estimated that nearly 10%, or $47 billion, of annual Medicare spending is nothing but waste, fraud or abuse.” Attorney General Eric Holder has put the number higher – at $60 billion. “We need Medicare administrators to work to prevent these improper payments – instead of the existing “pay and chase” model that makes the system so susceptible to fraud.”

Senator Brown and others are livid, understandably. Southern California white collar crimes, such as Los Angeles insurance fraud, Pasadena Medicare fraud and identity theft not only sap money from a strained system but also cause a deterioration in our ability to trust institutions designed to protect us and support us in times of need.

It’s easy to look at enormous numbers like this – $47 billion, $60 billion – and to develop a mentality that it’s “all these people’s fault.” In other words, there is a handful of “bad guys” who are robbing the system blind. If we could only catch and punish these perpetrators, then our health care system would be fixed, our economy will be righted, and all would be well.

Published on: April 11, 2011

Beverly Hills DUI Unfairness: Can a Low Carb Diet Ruin your Breathalyzer Readings?

by Michael Kraut

Let’s face it: celebrities, movie stars, and Beverly Hills business people want to stay as thin as possible. But if you’re on a low carb diet and you’re pulled over under suspicion of Beverly Hills DUI, be forewarned that the ketone bodies that you produce while on this diet can potentially have an adverse effect on your breathalyzer readings.

In fact, this effect of low carb or very low calorie diets (e.g. fasting) can easily accidentally land you a Burbank DUI, Pasadena DUI, Glendale DUI, or Los Angeles DUI – even if you’re significantly under the legal limit… or haven’t been drinking at all!

Before we get deep into the biochemistry, let’s dial back and learn a little bit more about the breathalyzer. A Beverly Hills DUI breathalyzer test is essentially a chemical analysis that looks for certain compounds on your breath to determine whether you’ve imbibed ethanol alcohol in a high concentration. If your blood alcohol concentration (BAC) is greater than 0.08%, you will be tagged for Beverly Hills DUI pursuant to California Vehicle Code Section 23152(b). End of story.

Or is it?

A variety of factors can screw up a breathalyzer’s reading. If you’re diabetic, for instance, and you suffer from ketoacidosis – a potentially life threatening condition – you will produce chemicals that can skew the BAC reading to be higher than it should.

When you’re on a low carb diet, your body will also manufacture these compounds, called ketones, but at very safe levels. (One of the big myths about low carb diets involves confusing the very dangerous ketoacidosis with normal ketosis).

Essentially, when you spare carbohydrates in the diet, your liver burns fat to help transform protein via a process known as gluconeogenesis into the glucose you need to run things like your brain. The half burnt fat releases ketone compounds to help provide fuel for the body and organs. According to Dr. Michael Eades, author of the best seller Protein Power, “the heart, for example, operates about 28% more efficiently on ketones than it does on glucose.”

In any event, the ketones not used immediately for fuel remain in the blood; they will be present in your breath and can skew your breathalyzer reading. How much will they skew your reading? The answer depends on a huge variety of factors, including how deeply into ketosis you are, your age, your gender, your weight, whether you’ve consumed alcohol simultaneously, whether you are on any medications, and literally dozens of other factors.

To build an effective defense, therefore, it’s common sense and good practice to talk to an experienced Los Angeles criminal defense attorney. Mr. Michael Kraut, (offices in Beverly Hills at: 9107 Wilshire Blvd., Suite 450, Beverly Hills, California 90210 Phone: (310) 550-6935), can discuss your arrest and possible defense strategies today. Mr. Kraut spent nearly 15 years serving the city as a prosecutor – he actually put many DUI offenders behind bars.

Published on: October 13, 2010

Massive Los Angeles Health Care Fraud Arrest — Part of the Biggest Bust in US History

by Michael Kraut

This morning, federal prosecutors launched a multistate series of raids, arresting 73 people in conjunction with what may turn out to be the largest medical care fraud scheme in history of the United States — including many arrests here for health care fraud and insurance fraud in Los Angeles and throughout the Southland for Los Angeles health care fraud.

Before we dive into this story–which will surely occupy media outlets for some time–let’s first review some examples of state insurance fraud and medical insurance fraud so you can understand Los Angeles white collar crime better:

* Chiropractor in Glendale bills an insurer for work he never did.
* Dentist in Pasadena orders completely unnecessary tests for a patient for the explicit purpose of pocketing insurance money.
* Family doctor in Beverly Hills works with associates to falsify medical records of patients to get extra money from an insurer.

Anyone who is in the pre-filing stage for Los Angeles medical insurance fraud can be at serious risk for massive fines, a prison sentence, and other serious penalties.

Now that you have some background in state insurance fraud law, let’s turn our attention to the details of this massive bust.

United States Attorney Preet Bharara revealed that a veritable army of Armenian gangsters allegedly bilked Medicare out of $163 million — a coordinated criminal effort that “put the traditional Mafia to shame.”

The scope of the alleged insurance fraud is breathtaking. Federal authorities initiated an investigation after thousands of Medicare patient and doctor records were reported stolen — these records included patients’ dates of birth and Social Security numbers. The medical billing fraud network (and associates) set up fake clinics in 25 states — 118 fake clinics, all told — to bill Medicare for providing (non-existent) services.

The FBI described these clinics as “completely notional” — that is, they didn’t actually exist. The doctor-patient interactions at these clinics were apparently a “mirage.” Prosecutors highlighted some examples:

* eye doctors supposedly billing for bladder tests
* delivery room doctors ordering up skin allergy tests
According to the US attorney, the Los Angeles health care fraud network had been operating under the guidance of Armen Kazarian, the Armenian equivalent of a Mafia godfather. Kazarian — as of this writing — is being held at a Los Angeles jail.

In addition to the Southern California medical billing fraud arrests, police have detained people in New York, Mexico, Georgia, and Ohio. Kazarian and the 72 others are scheduled to be arraigned this afternoon on these charges, which will include: identity theft, money laundering, racketeering conspiracy, and bank fraud.

Insurance fraud in Southern California is a serious crime — whether you’re a chiropractor, dentist, doctor, or other caregiver. If you’re in the pre-filing stages, you should be aware of the potential ramifications of conviction, which can include:

* the loss of your professional license
* a lengthy prison sentence
* serious court costs and fines
* mandatory restitution to insurance agencies
* loss of ability to provide Medicare or Medi-Cal services in the future
Doctor, dentist, and chiropractor insurance fraud in Los Angeles can be charged pursuant to a variety of laws, depending on what prosecutors allege you did. These laws include Insurance Code Section 1871.4, Penal Code Section 550, Penal Code Section 118, and Labor Code Section 3700.

What specifically constitutes Southern California health care fraud? Here are some examples:

* creating false medical records
* billing twice for chiropractic, dental, or other medical work
* ordering unnecessary medications
* billing Medicare or another program for work not provided
* requesting unnecessary tests for patients
If you are in the pre-filing stage of a federal or Southern California medical billing fraud case, it’s essential to discuss your situation with a credentialed Southern California health care fraud lawyer. Whether you’ve been hit with insurance fraud in Glendale or chiropractic fraud in Pasadena, you need to understand your rights and responsibilities under the law.

Published on: November 10, 2009

David Letterman Is Informed That The White Collar Fraud Was Not What Halderman Intended When He Demanded Money To Keep His Mouth Hush

by Michael Kraut

Prosecutors and top rated defense attorneys faced off in court today over the allegations of sex, lies and screenplays in the David Letterman extortion case. Extortion is a serious crime. A person convicted of this offense will most likely be sent to state prison for many many years. Extortion is defined as the use of either threat of violence or some other criminal means to cause any harm, including financial, to another person or their reputation, to obtain property from someone else with their consent.

In this case, Halderman is accused of threatening to divulge personal information about Letterman that could cause harm to the entertainer’s reputation.

The case revolves around Halderman, a well known TV producer,whose wife had a long running affair with Mr. Letterman. Halderman is the accused extortionist who wrote a screenplay about Letterman’s sex life with female staffers. The case stems from Halderman, who was angry over his wife’s affair could not find any way to make his wife stop the relationship with the late night comic. Records indicate that he continually confronted his wife about ceasing the affair. She apparently apologized and committed to her relationship with Halderman. Things seemed to be mending between the couple until he found that she had not stopped the affair.

Halderman decided to take his revenge out on the keyboard. Penning a script about Letterman’s hostile work environment. Then on September 9, 2009, Halderman delivered a portion of the script, which contained changed names, to Letterman’s driver, with documents which corroborated Halderman’s facts in the script. He then gave Letterman an opportunity to buy the script rather then see it made into a movie. Halderman met two times with Letterman’s lawyers and in taped conversations in which he was recorded demanding money. Afterward, a check for $2 million was given to Halderman.

Halderman’s criminal defense attorney indicated that their client was merely selling a screenplay and by filing the charges, the prosecutors were infringing on his First Amendment right of free speech.

Published on: November 7, 2009

California Legislators Begin to Call for DUI Convictions To Fall Under Three Strikes Laws

by Michael Kraut

California laws appear to be getting more harsh for those charged with Southern California DUIs. Legislators in recent months have begun to amass together to bring sweeping changes to the existing DUI laws. As of today, the laws are fairly straight forward. Los Angeles DUI defense Attorneys who are former prosecutors, and have trained law enforcement officers, are well versed in the penalties in DUI cases. The DUI defense attorney who who almost exclusively handle DUI cases are often in the best position to ensure that these penalties do not fall on their clients’ shoulders. Those charged and convicted with a first time Los Angeles DUI can expect the following to occur:

1. Driver’s License suspended for 4 months.
2. Must enroll in a 3 month DUI alcohol awareness program.
3. Pay huge court fines.
4. Receive a criminal record.
5. Be placed on probation for a period of at least two years.
6. Have a public record of conviction.
7. Mandatory jail sentence.
8. Sky rocketing insurance rates.

Because these penalties are so sever, it is always recommended that if a person is stopped and arrested for a Los Angeles DUI, that they immediately hire a pre-filing DUI defense attorney. Often times the criminal defense attorney is able to raise legal questions so that charges are either reduced or in some cases fully dismissed.

Those charged with a second time DUI have significantly higher penalties. A second time DUI is determined by a person having been convicted of a DUI sometime within the last 10 years before the most recent DUI. The penalties include the following:

1. Mandatory jail sentence of between 4 and 10 days and a maximum of 6 months in county jail.
2. Dui alcohol school that lasts 18 months at a minimum or a maximum of 30 months.
3. Driver’s license suspended for 2 years.
4. Court can mandate formal probation.
5. Court may order a DUI interlock device. This device will need to be blown into before your car can start. While this may not seem that inappropriate, if your job requires you to drive at all, you may likely be fired.
6. Huge fines from the court.
7. Loss of car insurance or significantly increased fines.

While these penalties are sever, Sacramento legislators are considering apply the Three Strikes Law to driving under the influence cases, making the penalties even harsher. The law makers are publicly upset about cases in which people have been convicted of eight or nine separate DUIs are still able to get back behind the wheel after their sentence is complete.

The most recent statistics from the California Department of Motor Vehicles indicate that almost 1,500 people were killed in DUI related deaths in 2007. In addition to those killed, well over 30,000 people were injured in DUI accidents during the same time period.

Statistics from 2006 point to an alarming increase in the rise of Los Angeles DUIs, as well as driving under the influence cases throughout Southern California and the rest of the State. The State reports in excess of 5,000 drivers had amassed four DUI conviction within the last 10 years.

Based upon these statistics, law makes are talking about instituting a Three Strikes type law which would permanently take these repeat offenders off the roadways. Tougher DUI laws are already being enacted. Beginning next year, first time DUI offenders In Los Angeles who are convicted of either Driving under the Influence of Alcohol or drugs in violation of CVC 23152(a) or of having a blood alcohol level in excess of of .08% in violation of CVC 23152(b), will have to have a ignition interlock device installed on any vehicle they drive.