Some Representative Press Reports

Man Charged in $7-Million Medi-Cal Fraud

January 04, 1991|STEVE PADILLA, TIMES STAFF WRITER

The owner of a pharmaceutical supply company in Valencia has been charged with defrauding Medi-Cal out of $7.2 million through phony billings, one of the largest such cases in the agency's history, the state attorney general's office said Thursday.

Charges of grand theft and filing false claims were brought in Los Angeles Superior Court against Roy Pacia, owner of Bruce Pharmacal Inc., on Dec. 28, the day that agents of the state Department of Justice raided the company and three houses owned by Pacia in Valencia, authorities said.

Pacia, however, may have fled the country.

Dennis Cowan, an investigator with the attorney general's Los Angeles office, said it was one of the largest cases of Medi-Cal fraud encountered by the agency. No other people were named in the criminal complaint, but the investigation is continuing, Cowan said.

Authorities had hoped to continue their investigation into the new year but hurriedly sought arrest warrants on Dec. 28 when they learned Pacia might be preparing to flee, Cowan said.

But by the time investigators and Los Angeles County sheriff's deputies arrived, Pacia had disappeared, Cowan said. Investigators suspect he may have gone to the Philippines, he said.

Cowan said an informant told officials of billing irregularities at the pharmacy, which was licensed to distribute pharmaceuticals.

Between January, 1987, and November, 1990, Cowan said, the company defrauded the state through overbilling, billing the state for products not prescribed by physicians and charging Medi-Cal for products not covered by the state health program.

Meanwhile, the U.S. attorney general's office on Dec. 19 filed four civil lawsuits to force Pacia to forfeit the company's office and the three houses, valued at $3.4 million, which the lawsuits allege were purchased with funds obtained through the fraud. Half of Medi-Cal funds come from the federal government.

On Dec. 30, 1988, Pacia purchased the company's headquarters at 25356 Rye Canyon Road for $2.5 million. According to the lawsuits, Pacia paid part of the amount with $897,369 in checks drawn on company accounts containing funds derived almost entirely from Medi-Cal payments.

The government also has seized houses purchased by Pacia at 24001 Sag Harbor Court, 26038 Tourelle Place and 25582 Novela Way, according to the lawsuits.

Man Charged With Bilking Medi-Cal Can't Be Prosecuted

Investigation: A businessman accused of stealing $22 million returns to Spain, which does not extradite its citizens to the U.S.

July 12, 1990|JACK CHEEVERS, TIMES STAFF WRITER

A Spanish businessman accused of stealing $22 million from the state's Medi-Cal program cannot be prosecuted here because he fled to his country before authorities raided his Diamond Bar home, government fraud investigators said Wednesday.

Faustino Pascual Crespo flew to Spain, which does not extradite its citizens to the United States, after fraudulently billing Medi-Cal for hundreds of thousands of medical items for incontinent patients, authorities said. The state attorney general charged him with grand theft last week in Los Angeles.

Investigators said the money represents the biggest theft by an individual in the history of Medi-Cal, which pays for medical care for poor Californians.

Crespo, 47, was investigated as part of a statewide probe of unscrupulous medical suppliers suspected of stealing at least $200 million from Medi-Cal through fraudulent bills for adult diapers, rubber bedsheets and similar items.

Authorities have filed charges against about 100 people and closed 60 medical supply firms in an effort to stop the practice, which is concentrated in the Los Angeles area.

Authorities charge that Crespo, using a series of temporary business visas, flew to California from Spain at least six times during three years to commit the fraud. During his visits, Crespo allegedly filed fraudulent claims and returned later to cash the state checks he received, officials said.

According to Medi-Cal investigators, Crespo set up four medical supply companies in Los Angeles and Orange counties from 1987 to 1989. The firms billed Medi-Cal a total of $24.4 million, virtually all of it for incontinence supplies, investigators said. The firms were identified as Neighborhood Medical Supply in Cypress; Argus Enterprises in Santa Fe Springs; Lahke Home Care Inc. in Pomona and Meditech Technology Corp. in Sun Valley.

The vast majority of the supplies never were delivered, said Dennis Cowan, the state's chief Medi-Cal fraud investigator in Los Angeles.

Crespo's attorney, Dennis Warren, said state authorities "exaggerated the $22-million figure" for the purposes of getting a higher bail on Crespo.

"They have substantial evidence of deliveries of millions of dollars of products to individual beneficiaries," he said.

Crespo purchased Medi-Cal stickers from independent "sticker bandits" who get them from Medi-Cal recipients at nursing homes, mobile home parks and government-subsidized housing projects, Cowan said.

Medi-Cal recipients are issued five stickers a month, which they exchange for doctor's visits and other medical services. The stickers must be attached to bills sent to Medi-Cal for payment.

In some cases, bandits give Medi-Cal recipients small bags of toiletries in exchange for the stickers, which cannot legally be sold or traded. In other instances, bandits impersonate Medi-Cal officials and steal stickers, Cowan said.

Investigators raided Crespo's businesses and Diamond Bar townhouse March 2 but were told by his 21-year-old son that Crespo had left for the airport the night before, court papers said. Crespo lives in Marbella, on the Spanish Riviera.

As long as Crespo remains in Spain, U.S. authorities cannot seize him and bring him to trial, said Assistant Atty. Gen. Steven V. Adler, who heads state investigations of Medi-Cal fraud.

Crespo may have decided to flee after he was notified that Medi-Cal was auditing him, said M. Teresa Franco, a supervising Medi-Cal fraud investigator in Los Angeles.

But Warren said Crespo left the United States not to escape authorities but to take a "pre-planned business trip" to Europe, where he owns several companies that manufacture or sell medical supplies.

Since Crespo's departure, authorities have seized $2.7 million in cash and property belonging to him in California, including an 11-unit condominium complex under construction in Pomona. But Crespo managed to transfer more than $6.6 million to Spain from bank accounts in California, court documents said.

Crespo also is the target of a $250,000 fraud investigation by officials of the federal Medicare health program for the elderly, according to court records.

Referenced Publication - Eroding Justice: Psychiatry's Corruption of Law (page 27)