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Attorney General Lockyer Obtains Sentence in Massive Medi-Cal Fraud Crime Ring Case

Total Punishment for Multiple Defendants Now Stands at 63 Years in Prison
Friday, September 3, 2004
Contact: (415) 703-5837

(SANTA ANA) – Attorney General Bill Lockyer today announced a co-defendant in one of the state's largest Medi-Cal fraud cases was sentenced to eight years in prison by Orange County Superior Court Judge Kazuhiru Makino. Ron Martin, 46, of New York, also was ordered to pay $2.5 million to the California Medi-Cal program and $17,212 to the California Franchise Tax Board.

"My office will continue to aggressively prosecute those who cheat the system that 6.8 million Californians depend on as their only source of critical health care," Lockyer said.

With Martin's sentencing, the Attorney General's Office has obtained prison sentences of 63 years and four months and restitution to Medi-Cal of more than $8.28 million for 10 co-defendants in the massive, multi-state Medi-Cal and Medicare fraud case.

The Attorney General's Bureau of Medi-cal Fraud and Elder Abuse (BMFEA) in 1999 began an investigation into a complex scheme suspected of defrauding the state Medi-Cal system of more than $20 million.

The crime ring used more than 15 clinical labs in Los Angeles, Orange and Riverside counties to illegally bill government health programs for tests that were never authorized by doctors, and not performed. Medical clinic employees were paid to draw excess blood from unsuspecting patients, and other blood was purchased from runaway children, homeless individuals and drug addicts. The blood was tested at the labs controlled by Surinder Singh Panshi, the ringleader, who billed Medi-Cal using confidential patient information he stole and shared with sister labs his syndicate controlled. The scheme involved the theft of doctors' identities to create false records showing the physicians authorized the labs to perform the tests. Panshi's ring also fostered a black market for blood and stolen identities he obtained.

Panshi was sentenced in September 2003 to 16 years in California prison. Co-defendant Tahi Sherani was sentenced in May 2004 to 18 years and eight months, a record sentence for Medi-Cal fraud in California. In all, 29 defendants were charged, including Muhammad Yasin, sentenced to eight years; Yasin's brother, Shazad Ahmed, 22, sentenced to three years; and a cousin, Saeed Ahmed, 35, sentenced to 16 months. Martin's nephew Raymond Gutierrez is scheduled for sentencing in December.

The scheme was uncovered through investigations begun independently in 1999 by BMFEA and the New Jersey Attorney General's Money Laundering Unit. The two state attorneys general worked closely for five years. Other agencies that assisted include the U.S. Department of Health and Human Services, Office of the Inspector General, which investigates Medicare fraud; and the California Franchise Tax Board, which has uncovered widespread tax evasion by the defendants.

Also assisting were: the Federal Bureau of Investigations, former Immigration and Naturalization Service,

U.S. State Department, California Department of Justice's Bureau of Investigations, California Department of Health Services' Laboratory Field Services and the Los Angeles County Sheriff's Office.

Also sentenced with Martin today were four corporations he oversaw. The corporations, all clinical laboratories, plead guilty to tax evasion and were ordered dissolved. They also were ordered to pay restitution to the Franchise Tax Board as follows:<ul>
<li>SGV Family Medical Laboratory Inc., $103,621;
<li>California Lab Access Inc., $111,359;
<li>New Era Medical Laboratory Inc., $163,391;
<li>Medical Diagnostic Laboratory Inc. $92,634.</ul>

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