Hospital Owner and “Skid Row” Assessment Center Operator Arrested in Healthcare Fraud Scheme That Recruited Homeless and Fraudulently Billed Government for Unnecessary Services

According to the L.A. Times, the owner of a Los Angeles-area hospital and a man who acted as a recruiter were arrested August 6 on federal charges of defrauding Medicare and Medi-Cal by providing unnecessary health services to homeless people who were recruited from “Skid Row” with promises of payments.
Rudra Sabaratnam, 64, of Brentwood, an owner and top executive of a hospital; and Estill Mitts, 64, who resides near the Miracle Mile section of Los Angeles, the operator of a Skid Row “Assessment Center,” were arrested without incident.
Sabaratnam and Mitts were indicted under seal by a federal grand jury last week. The 21-count indictment, which was unsealed this morning following their arrests, alleges that Sabaratnam and Mills conspired to recruit homeless people to receive unnecessary health services for the purpose of committing health care fraud.
Sabaratnam and Mitts are jointly charged with conspiring to receive and pay kickbacks for patient referrals and to commit health care fraud. Sabaratnam is charged with eight counts of paying kickbacks for patient referrals. Mitts is charged with four counts of receiving kickbacks for patient referrals. Mitts is additionally charged with six counts of money laundering and two counts of tax evasion for allegedly failing to report more than $479,000 in income in 2005 and more than $620,000 in income in 2006.
If convicted of all counts, Sabaratnam faces a statutory maximum penalty of 50 years in federal prison, and Mitts faces a maximum possible sentence of 140 years in prison. Click here to read the complete text of the US Attorney’s press release.