The United States Attorney's Office

FORMER HOSPITAL EXECUTIVE PLEADS GUILTY TO PAYING KICKBACKS IN ‘SKID ROW’ HEALTHCARE FRAUD SCHEME

The former senior vice president of City of Angels Medical Center pleaded guilty this afternoon to paying illegal kickbacks to recruiters who referred homeless patients to the hospital, where they received unnecessary health services.

Dante Nicholson, 51, of Palmdale, admitted paying illegal kickbacks as part of a scheme to defraud Medicare and Medi-Cal by recruiting homeless persons from the “Skid Row” district of downtown Los Angeles.

Nicholson and a second City of Angels executive – Robert Bourseau, a former chairman of the board and co-owner of the hospital – were indicted in (see: http://www.usdoj.gov/usao/cac/pressroom/pr2009/007.html).Bourseau remains in custody without bond.

Appearing today before United States District Judge George H. King in Los Angeles, Nicholson pleaded guilty to two counts of paying illegal kickbacks. In a plea agreement, Nicholson admitted to participating in a scheme to pay recruiters to refer homeless people with Medicare and Medi-Cal benefits to City of Angels for in-patient hospital stays. As part of the scheme, City of Angels entered into sham “consulting” contracts intended to conceal the illegal kickbacks. City of Angels billed Medicare and Medi-Cal for in-patient services to the recruited homeless beneficiaries, including those for whom in-patient hospitalization was not medically necessary.

Nicholson was named in the second indictment brought in the investigation into health care fraud related to Skid Row residents. In December 2008, Rudra Sabaratnam, the former chief executive officer of City of Angels pleaded guilty to paying illegal kickbacks for patient referrals (see: http://www.usdoj.gov/usao/cac/pressroom/pr2008/153.html). Estill Mitts, who operated a center that recruited homeless people to receive unnecessary health services, pleaded guilty in September 2008 to conspiracy to commit several federal crimes (see: http://www.usdoj.gov/usao/cac/pressroom/pr2008/121.html). Sabaratnam and Mitts are scheduled to be sentenced by Judge King on August 17.

The charges to which Nicholson pleaded guilty carry a statutory maximum penalty of 10 years in federal prison. Nicholson has agreed to pay over $4.1 million in restitution to Medicare and Medi-Cal. Judge King ordered Nicholson to appear for sentencing on August 17.

The case against Nicholson and the other defendants is part of an ongoing investigation being conducted by the U.S. Department of Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation; IRS-Criminal Investigation; the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse; and the Health and Law Enforcement Team (HALT), a multi-agency task force which is operated by the Los Angeles County Health Department.

Anyone with information that could assist the ongoing investigation is encouraged to contact investigators with the Department of Health and Human Services by calling 1-800-HHS-TIPS, or emailing HHSTips@oig.hhs.gov.

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