Law Enforcement

Los Angeles – Continuing his fight to combat Medicare and Medi-Cal fraud, Attorney General Edmund G. Brown Jr. last night filed criminal charges against six individuals who paid healthy seniors to be admitted to a hospice for the terminally ill and then billed state and federal health care programs for “phantom procedures” never performed.

The six defendants – including a mother and her two children – were physicians and staff at “We Care” hospice in Sherman Oaks. One defendant was arrested today. Another four will surrender to authorities later this month. One remains at large.

“We Care obviously didn’t care about doing the right thing or helping sick people,” Brown said. “The owners, physicians, and staff of We Care paid healthy seniors to be admitted to hospice and then billed Medicare and Medi-Cal for phantom procedures. In total, they bilked the public out of $9 million and used the funds to enrich themselves and pay for expensive homes and luxury cars.”

Brown’s Office and the U.S. Department of Health and Human Services launched a joint investigation in 2008 after an audit found that a suspiciously large number of patients admitted to We Care were in good health and the mortality rate was low for a hospice.

Typically, 80% of patients die during their first six months in hospice. At We Care, only 11% of the 362 Medicare beneficiaries and 4% of the 143 Medi-Cal beneficiaries died between 2004 and 2007.

The joint investigation ultimately revealed that the staff of We Care paid “cappers” a finder’s fee for identifying and enrolling relatively healthy Medicare and Medi-Cal beneficiaries into hospice care. Subsequently, the staff billed the government for procedures and services that were not performed or medically necessary – including mental health evaluations and the administration of oxygen. This amounted to $9 million in fraudulent billings.

The defendants operated the scheme between 2004 and 2007, until the hospice’s license was revoked and the facility was closed.

The following defendants were charged in Los Angeles Superior Court:

• Milagros Delmendo, 58, of Northridge, on four counts of grand theft, presenting false Medi-Cal claims, making fraudulent claims to the government, and paying unlawful remuneration. Ms. Delmendo was arrested today by Special Agents from the Attorney General’s Office and the U.S. Department of Health and Human Services and booked in the Los Angeles County Jail. Ms. Delmendo was the owner of We Care.

• Kristina Delmendo Deguzman, 31, of Northridge on three counts of grand theft, presenting false Medi-Cal claims, and making fraudulent claims to the government. She will surrender to authorities Wednesday.

• Mark Delmendo, 28, of Studio City, on three counts of grand theft, presenting false Medi-Cal claims, and making fraudulent claims to the government. A warrant has been issued for his arrest.

• Nolan Jones, M.D., 60, of Los Angeles, on three counts of grand theft, presenting false Medi-Cal claims, and making fraudulent claims to the government. He has agreed to surrender to authorities.

• Anselmo Alliegro, M.D., 78, of Dundalk, Maryland, on three counts of grand theft, presenting false Medi-Cal claims, and making fraudulent claims to the government. He will surrender to authorities later this month.

• Ramon Parayno, 46, of Studio City, on two counts of grand theft and paying unlawful remuneration. He has agreed to surrender to authorities.

Here’s how the scheme worked:

The owner of We Care, Milagros Delmendo, paid Ramon Parayno $500 for each beneficiary admitted, and an additional $500 for each month the patient remained under care. Parayno would split his fee 50/50 with the beneficiary. At one point in 2005, Parayno made in excess of $25,000 in a month.

Once enrolled, physicians Nolan Jones and Anselmo Alliegro falsely diagnosed patients as suffering from a terminal disease, such as end-stage Chronic Obstructive Pulmonary Disease (COPD).

The investigators also found that nursing staff had been directed by Ms. Delmendo and her children -- employees Mark Delmendo and Kristina Delmendo Deguzman -- to falsely note in medical charts that their patients suffered from “shortness of breath,” “generalized weakness,” or “moderate to severe pain.”

Patients with end-stage COPD are not able to walk and require oxygen. The majority of patients diagnosed with COPD at We Care, however, were observed without oxygen or the assistance of a wheelchair. Many of the primary care physicians interviewed by investigators stated that their patients were not terminally ill and should not have received hospice care.

In one case, We Care billed Medicare $39,031 for hospice care for a patient whose medical problems only included arthritis and high blood pressure.

The Delmendo family used the proceeds of the scheme to purchase expensive cars, designer clothing, and luxury homes, including one purchased in cash for $1.7 million.

If convicted on all counts, the defendants could receive up to nine years in prison. To report fraud or abuse, call the Attorney General’s Office (Bureau of Medi-Cal Fraud and Elder Abuse) at (800) 722-0432.

The complaint and affidavit are available upon request.

LOS ANGELES- Continuing his crackdown on mortgage fraud, Attorney General Edmund G. Brown Jr. late Thursday won a guilty plea from 22-year old Anna Santos, who conned thousands of dollars from homeowners in a “cruel and sophisticated” loan scam. Santos will be formally sentenced on May 20 in Los Angeles Superior Court. She is expected to receive 2 years in prison. “Santos conned thousands of dollars from homeowners trying to save their homes through a cruel and sophisticated scam,” Brown said. “She held out hope, but in reality did not provide an ounce of loan modification, leaving her victims unprotected and in far worse straits.” Santos was arrested on March 12, 2009 after she used forged documents to convince victims to hand over thousands of dollars for non-existent loan modification services. Santos obtained a fictitious business permit through the City of Los Angeles for 'Payment Processing Department.' She opened several bank accounts and two post office boxes under that name. She mailed flyers to vulnerable homeowners that appeared to be from victims' lenders or a government agency. The flyer used a large, bold header that read 'Final Notice' and advised homeowners that they qualified for a special program to save their home from foreclosure. After signing up for “loan modification services,” homeowners then received what appeared to be 'confirmation' that their lender had been notified. Many victims also received loan modification documents that appeared to be from their lender. These documents were all forgeries. The victims were informed they had been placed in a 'probationary' program and their mortgage payments should be submitted to 'Payment Processing Department' and sent to a given post office box address. None of the payments were credited to the victims' home loans. Payments sent to the post office box were retrieved by Ms. Santos and deposited into the bank accounts she had opened. Santos targeted seniors and homeowners on the verge of foreclosure. It is believed that she scammed more than 100 victims. On average, victims lost approximately $3,000, at a time when they could not afford their mortgage, let alone additional fraudulent expenses. Since taking office, Attorney General Brown has shut down loan modification and foreclosure rescue scams and fought companies that have misled vulnerable borrowers:

• In March 2009, Brown shut down Foreclosure Freedom, a fraudulent loan modification company that continued to collect fees and mortgage payments from dozens of homeowners without ever providing any loan modification services.
• In November 2008, Brown arrested three members of First Gov after the company demanded an up-front fee, ranging from $1,500 to $5,000, to participate in a loan-modification program and never renegotiated the loans.
• In October 2008, Brown announced an $8.68 billion settlement with Countrywide Home Loans after the company deceived borrowers by misrepresenting loan terms, loan payment increases, and borrowers’ ability to afford loans.
• In May 2008, Brown shut down a team of scam artists that acquired deeds to hundreds of homes in foreclosure by convincing desperate consumers to pay $10,000 to place their property in a land grant, a phony and worthless real estate document, and then tricked homeowners into signing over the deed to their home and paying the company rent.
• In March 2008, Brown shut down Lifetime Financial, Nations Mortgage, Greenleaf Lending, Virtual Escrow, Olympic Escrow and Direct Credit Solutions after the companies ran a complex predatory lending scheme using bait and switch tactics to victimize thousands of homeowners, many of whom lost their homes.

SAN DIEGO-- Attorney General Edmund G. Brown Jr. today announced that agents from the Bureau of Narcotic Enforcement today arrested five college-age individuals who conspired to fraudulently obtain thousands of “dangerous and potentially lethal” prescription drugs.

From January to March 2009, the co-conspirators illegally obtained 2,500 pills, primarily Oxycontin and Xanax, with a street value in excess of $70,000.

“These individuals used stolen physician information to obtain thousands of dollars worth of dangerous and potentially lethal prescription pills,” Attorney General Brown said. “This is one more example of how legal medications are being diverted for illicit purposes.”

In February 2009, a San Marcos pharmacist’s suspicions were aroused when a young woman attempted to fill a prescription for 120 Xanax pills. When the pharmacist contacted the doctor’s office to confirm the prescription, he was informed that it was invalid and the woman was not a patient.

The pharmacist subsequently notified the Attorney General’s office, which launched a two-month investigation that culminated in today’s arrests including:

• Sean Christiansen, 24, of Vista for violation of probation, possession of a controlled substance, sale of a controlled substance, and conspiracy;

• Christopher Zenkus, 24, of Poway on 4 counts of commercial burglary, 5 counts of false impersonation, 3 counts of prescription fraud, and 1 count of unlawful possession of a prescription blank;

• Stephen Cleeton, 20, of Poway on 6 counts of commercial burglary, 6 counts of forged narcotic prescription; and 2 counts of unlawful possession of a prescription blank;

• Courtney Morgan, 20, of San Diego on, 11 counts of commercial burglary, 7 counts of forged narcotic prescription; and 4 count of unlawful possession of a prescription blank;

• Erica Peterson, 20, of Del Mar on 4 counts of commercial burglary, 2 counts of forged narcotic prescription; and, 3 counts of unlawful possession of a prescription blank.

Fellow conspirator, Paige Billheimer, 21, of San Diego remains at large. She is expected to be charged with 6 counts of commercial burglary, 1 count of prescription fraud, and 5 counts of forged narcotic prescription.

The investigation revealed that Zenkus had stolen the Drug Enforcement Administration and medical license numbers of a San Diego physician and used this information to order five blank prescription pads that could be used to write 500 prescriptions.

Subsequently, Zenkus, Christansen, and their co-defendants filled fraudulent prescriptions at 11 different pharmacies in the San Diego area, obtaining 1,020 Oxycontin pills with a street value of $55,000; 1,390 Xanax pills with a street value of $7,000; 720 Acetaminophen and Hydrocodone pills with a street value of $5,040; 360 Percocet pills with a street value of $3,600; and 60 Adderall pills with a street value of $180.

In some cases, the defendants would go from pharmacy to pharmacy to fill prescriptions, using their parents’ health insurance to pay for the pills.

Paperwork found in Sean Christiansen’s vehicle detailed indicates that he was earning $31,000 a week through the illegal sale of prescription drugs.

According to the latest Department of Justice “Drug Trends” report, Oxycontin is among the most prevalent medicines obtained fraudulently and is one of the most abused medicines in the United States.

If convicted, defendants face up to 1-5 years in prison.

The Bureau of Narcotic Enforcement’s San Diego Regional Pharmaceutical Narcotic Enforcement Team led the two-month investigation, which also included agents from; California Department of Health Services, California Department of Insurance. The San Diego County Sheriff and San Diego County Probation Department assisted in today’s arrests.

Copies of the arrest warrants are attached.

LOS ANGELES – Attorney General Edmund G. Brown Jr. today directed the Maywood City Council to reform its police department in the wake of a 16-month investigation which exposed “gross misconduct and widespread abuse.”

Brown will immediately seek a stipulated court order to secure adoption of reforms and oversight by the Attorney General’s office.

“Over a period of five years, the Maywood Police Department violated the trust of the community it was supposed to serve and protect,” Attorney General Brown said. “This investigation has revealed gross misconduct and widespread abuse including unlawful use of force against civilians. It is imperative that the city council take immediate and concrete steps to rein in the department.”

Brown today released a 30-page report that found that the City of Maywood Police Department routinely used excessive force, did not obtain probable cause to justify arrests and searches, and operated without adequate oversight by the Maywood City Council and the City's Chief Administrative Officer.

Investigators examined some 30,000 pages of documents from January 2002 through April 2007. Sixty-four witness interviews were conducted with sworn officers, city council members, City of Maywood administrative personnel, city residents, and civil rights attorneys.

The investigation was launched in response to a 2007 request by then-Speaker of the Assembly Fabian Núñez. The investigation was headed up by Senior Assistant Attorney General, Louis Verdugo, who was assisted by special agents from the Attorney General’s office, and Joe Brann, former Hayward Police Chief and Director of the COPS Office under President Clinton.

Over the course of the investigation, Brown’s office has been in contact with the Los Angeles District Attorney.

The City Council has taken limited steps to reform the department, most notably by hiring a permanent Chief of Police. Nevertheless, reform efforts are just beginning and many of the underlying structural causes have not been remedied.

Brown has sole legal authority under California Civil Code 52.3 to ensure that police departments do not deprive “any person of rights, privileges, or immunities secured or protected by the Constitution or laws of the United States or by the Constitution or laws of California.”

Brown’s investigation uncovered five major areas where the Department had violated the rights of community members, identified ten factors that allowed these violations to develop, and offered a 12-point plan of reform.
Findings
Attorney General Brown’s investigation found that:

• Maywood police officers routinely used excessive force, and police department management did little or nothing to stop these abuses. In September 2006, for instance, officers, tased, assaulted and beat a father and son in front of their home after the son witnessed officers assaulting a man across the street. The son asked one of the officers for his badge number. As he wrote it down, he was assaulted by the officer. Other officers joined in. The young man was repeatedly shot with a Taser while he was handcuffed. At one point, the father yelled “what are you doing to my son.” The father was then assaulted by several officers. Both men were taken to the hospital for medical treatment. They were charged with battery of a police officer, and resisting and obstructing an officer. The charges were later dismissed.

• The lack of probable cause to justify arrests and searches and reasonable suspicion to detain members of the public. A former Maywood police officer who was interviewed stated that officers routinely dispensed with probable cause and reasonable suspicion requirements when dealing with members of the public. In fact, he was told by his training officers that when he saw someone walking down the street he should stop them and “brace them” (i.e., confront, aggressively question, and search); there was not any interest in establishing probable cause. He also stated that it was common for officers to dispense with pat-down searches; instead, the officers would put their hands into the pockets of the persons detained.

• Substantial evidence supporting allegations of sexual assault. In May 2008, the LA District Attorney charged a Maywood Police Department officer with the sexual assault of three women. The assaults took place in 2006 and 2007 and occurred while the officer was on duty. The assaults all commenced with detentions for which there was no legal cause or justification. In February 2009, following a preliminary hearing, the officer was held to answer seventeen felony counts related to these assaults. The case remains pending.

• Evidence that the Department discouraged the public from filing complaints and refused to provide forms as required by law.

• Evidence that the Department’s policy of stopping drivers without probable cause and impounding their vehicles violated the law. Federal law requires traffic stops to be initiated only if there is reasonable suspicion that a traffic code is being violated. Maywood police officers often disregarded this requirement and initiated traffic stops arbitrarily. Between February 1, 2002 and April 30, 2007, the Maywood Police Department towed and impounded some 17,773 vehicles.

Causes
The Attorney General’s investigation found that the abuse was caused by the following factors:

• Failure of Maywood City Council to ensure that its administrative staff provided strong management of the police department.

• Failure, until quite recently, to recruit and retain a permanent Chief of Police who could competently run the Police Department.

• A chain of command where officers were not held accountable by their sergeants for misconduct, and sergeants were not held accountable for the lack of supervision.

• Poor hiring practices that failed to screen out unqualified candidates.

• The lack of clear written polices to ensure that policing was done in a manner consistent with the law and contemporary police practices.

• Failure to ensure that officers consistently prepared and submitted use of force reports, and failure of supervisors to review the reports that were submitted.

• Failure to provide adequate training.

• Failure to consistently accept and investigate citizen complaints.

• Failure to adopt an Early Intervention System to identify police officers that may be engaging in unlawful activity or use of force.

Key Reforms
Brown called for the following key reforms:

The City Council must provide comprehensive and effective oversight of the Department; the City must retain an outside police professional to submit an annual report regarding the state of the Department; the City Council must provide for the recruitment and retention of highly qualified police chiefs to ensure that the reforms below are carried out. These reforms include:

1. Adoption of hiring practices to ensure that only qualified candidates for sworn and civilian candidates are hired and unsuitable applicants are screened out.

2. Updating written policies and procedures to ensure that police services are provided in a lawful manner.

3. Ensuring that following use-of-force incidents, reports be submitted and reviewed by management.

4. Providing adequate training on use of force, probable cause and reasonable suspicion, and use of Tasers.

5. Making sure that residents can lodge complaints and that those complaints be investigated.

6. Requiring that reports be clear and provide sufficient information to determine the probable cause for an arrest or search, or reasonable suspicion for a detention or pat-down search.

7. Requiring the implementation of an Early Intervention System to track and monitor the activities and actions of sworn personnel to deter inappropriate or unlawful conduct.

8. Retaining an independent outside expert to evaluate the department’s management structure to ensure that there is accountability up and down the chain of command.

9. Requiring the Department to purchase digital audio recorders, and ensuring that officers use them.

10. Requiring the installation of video cameras on all Department vehicles and in the lobby of the police station and other areas of the station where officers interact with the public.

11. Changing the culture of the department and eliminating inappropriate sexual innuendo and harassment, vulgarity, discourtesy to members of the public and between officers, and cultural, racial, and ethnic insensitivity.

12. Adopting a community-oriented policing philosophy.

OAKLAND – Attorney General Edmund G. Brown Jr. on Monday filed seven criminal charges against Sharon Elyce Pearl, who embezzled $675,000 from the State Bar of California to pay for “spa treatments, designer clothes, lavish meals, and fancy hotel rooms.”

“The defendant embezzled hundreds of thousands of dollars from the State Bar of California over a period of eight years,” Attorney General Brown said. “She was responsible for collecting rent for the State Bar, but instead used the money to pay for spa treatments, designer clothes, lavish meals, and fancy hotel rooms.”

On Monday, April 6, 2009, Attorney General Brown filed seven criminal charges in Alameda County Superior Court against Ms. Pearl, 51, of Oakland. The charges include:

• One criminal count of embezzlement for violating section 504 of the state Penal Code.

• Six counts of filing false tax returns for violating section 19706 of the state Revenue and Taxation Code.

The State Bar of California admits attorneys for practice in the state, provides continuing education classes, and conducts disciplinary hearings.

In 1999, the State Bar purchased an office building at 180 Howard Street, San Francisco, for use as its headquarters. The State Bar inherited tenants who leased retail space within the building. As the Director of Real Property, Ms. Pearl handled building management and was responsible for collecting tenant’s rent.

As early as 2002, Ms. Pearl began to embezzle a portion of the rental funds she collected. Here’s how the scheme worked:
• Ms. Pearl directed some tenants to make their rent checks payable to “PLOT-The State Bar of California.” Unknown to the renters, “PLOT” stood for the Piedmont Light Opera Theatre.

• Ms. Pearl deposited some of the checks into accounts held by the Piedmont Light Opera Theatre (PLOT).

• Ms. Pearl, who was a signatory on the theater’s accounts, would then transfer funds from the theater accounts to her personal bank account.

• She would then use the embezzled funds to pay for spa treatments, designer clothes, lavish meals, and fancy hotel rooms.

Ms. Pearl was able to continue the scheme for years because the State Bar did not keep track of the rent payments it was owed.

The State Bar finally uncovered Ms. Pearl’s scheme in 2008 when she requested a check that she claimed was for a tenant’s security deposit refund. Because there were no records that the tenant in question had ever paid a security deposit, the State Bar launched an internal investigation into the financial discrepancies.

The State Bar ultimately discovered that Ms. Pearl was maintaining two sets of books, and the investigation was referred to the Attorney General’s Special Crimes Unit for prosecution.

Ms. Pearl has agreed to surrender herself to authorities next Monday. She could face up to nine years in state prison if convicted on all charges.

Copies of the complaint and arrest warrant declaration are attached.

Anaheim, Calif. – Attorney General Edmund G. Brown Jr. today announced that agents from the Bureau of Narcotic Enforcement on Saturday arrested a Mexican national, Gerardo Medina Hernandez, and seized 95 pounds of black tar heroin from his sports utility vehicle.

“The suspect stashed 95 pounds of black tar heroin in the wheel well of his SUV,” Attorney General Brown said. “It is estimated that this heroin would sell for more than $10 million on the street, making it the largest seizure in Bureau history.”

Bureau of Narcotic Enforcement agents were assisted in this investigation by the Los Angeles Intra-agency Metropolitan Police Apprehension Crime Task Force (L.A. IMPACT) and the Inglewood Police Department.

Hernandez, 25, is a native of Mexico, but has a green card and lives in Anaheim. He has no known prior criminal record in California.

As part the investigation, agents obtained a search warrant for Hernandez’s vehicle and residence, which is located in the 1700 block of W. Lincoln Ave. in Anaheim.

During the search, agents found Hernandez unloading the heroin from two compartments built into the front wheel wells of the vehicle (a 2005 Volkswagen SUV) and putting it into a cooler in his garage.

The Bureau of Narcotic Enforcement determined the wholesale value of the heroin to be $1.3 million. The established street value of the heroin is in excess of $10 million.

Hernandez was arrested and booked into the Los Angeles County Jail for possession of heroin for sale. Bail was set at $2 million.

Located in the Attorney General’s office, the Bureau of Narcotic Enforcement is the oldest narcotic enforcement bureau in the United States.

Questions regarding this investigation can be directed to Senior Special Agent in Charge Orlando Lopez at (909) 208-9062. Photographs of the seizure are attached.

LOS ANGELES -- Attorney General Edmund G. Brown Jr. announced that special agents from the California Department of Justice today arrested Abel Moses Somilleda, the owner of a vacation travel agency, who “ripped off” $55,000 from high school and college students whose 2006 trip to Cancun, Mexico was cancelled.

“Dozens of high school and college students paid hundreds of dollars for a spring break trip to Cancun, but instead of a week of vacation, these students were ripped off by the owner of Big Bad Student Travel,” Brown said. “Abel Moses Somilleda promised a vacation to Mexico, but when the trip was cancelled, he pocketed the students’ money instead of providing refunds.”

Abel Moses Somilleda, 35, of Hawthorne, Calif., was arrested in Hawthorne by California Department of Justice Special Agents. He is charged with:

• Nine counts of grand theft in violation of Penal Code section 487(a);
• One count of failure to return moneys in violation of Business and Professions Code section 17550.14; and
• Nine counts of failure to deliver on ticket or voucher in violation of Business and Professions Code section 17550.17(b).

Somilleda opened Big Bad Student Travel in 2004 after working for ten years in the student travel business and coordinating several trips of his own.

In 2006, Somilleda organized a spring break trip to Cancun, Mexico, for dozens of high school and college students. Students paid approximately $700 for the flight, hotel room, and expenses.

Three months before the trip, however, Somilleda learned that it would be cancelled. But instead of immediately informing those who had signed up, Somilleda continued to accept payment for the trip. It was only two or three days before the trip was scheduled to take place when Somilleda notified students that it had been cancelled.

Somilleda promised the students that they would receive a refund within several days. The students, however, never received refunds.

In total, Somilleda pocketed some $55,000. A search warrant uncovered that Somilleda had spent most of the money on his own personal expenses -- including rent, dinners, groceries, and utilities.

If convicted of all charges, Somilleda faces eight years in prison.

California requires all sellers of travel to register with the California Attorney General’s Office and display their registration number on all advertising. To check the registration of a Seller of Travel visit the Attorney General’s website at http://www.ag.ca.gov/travel/

To help prevent becoming a victim of travel fraud, the Attorney General’s Office has offered a few tips and warning signs.

GET IT IN WRITING AND READ IT CAREFULLY
Before you pay any money, read all the terms and conditions relating to your travel services including cancellation conditions, fees and other restrictions.
PAY BY CREDIT CARD
You have a right in certain circumstances to have credit card charges reversed if you do not receive what you paid for. Check with your credit card company for details. This protection is not available when you make a payment with a check, money order, or cash.

KNOW BEFORE YOU GO
Check beforehand with your local Better Business Bureau or California Department of Consumer Affairs ( http://www.dca.ca.gov/ ), which may tell you how long the seller of travel has been in business, whether there have been any law enforcement actions brought against it in the past, and the nature of consumer complaints it has received, if any.
CONFIRM TRAVEL PLANS DIRECTLY
It is a good practice to confirm all of your travel arrangements directly with the businesses providing the transportation, hotel, or car rental.
BEWARE OF “FREE” TRIPS
While there are legitimate businesses that offer free trips, there are others that offer “free” trips to entice consumers into buying their products or services, which include hidden costs.
INTERNET SCAMS
There are many legitimate sellers of travel that provide great deals on the Internet, but if an offer seems too good to be true, it probably is.
USE ONLY A REGISTERED TRAVEL COMPANY OR AGENT
Sellers of travel must register every year with the Attorney General's office in order to do business or market in California. They must clearly display their registration number in all advertising materials. Do not deal with unregistered travel companies. While registration does not mean that the seller is reputable, you should avoid any seller who has not adopted the safeguards required by law to protect your payments.

IF YOU HAVE BEEN SCAMMED
Taking money without delivering goods or services that are promised can be a crime. If you believe you have been a victim of a crime, call your local police agency. If your travel seller’s main place of business is in California, and under certain other circumstances, you may be entitled to make a claim for restitution from the Travel Consumer Restitution Fund. For more information about how to file a claim, please go to http://ag.ca.gov/travel/consumer.php.

ORANGE COUNTY- Attorney General Edmund G. Brown Jr. today announced the arrest of two scam artists -- Mary Alice Yraceburu and Marianne Curtis -- who “coldly and heartlessly” conned over one hundred and sixty victims out of thousands of dollars for non-existent loan modification services.

“These scam artists coldly and heartlessly preyed on Californians desperate for help in saving their homes,” Attorney General Brown said. “Homeowners in financial trouble have to be on guard against loan modification fraud, so they don’t make a bad situation worse.”

Attorney General Brown today filed 49 felony charges Orange County Superior Court against Mary Alice Yraceburu, 45, of Riverdale and Marianne Curtis, 67, of Costa Mesa.

Yraceburu was arrested today in Fresno County and Curtis was arrested today in Orange County on the following charges:

• 24-counts of grand theft;
• 25-counts of violations of California’s foreclosure consultant statutes;
• One special allegation that the total value of theft was over $65,000;
• One special allegation that the total value of theft was over $100,000;

Both women are convicted felons who have served time in state and federal prisons.

The two women operated a company called Foreclosure Freedom, which sent hundreds of fliers to Californians promising help in stopping the foreclosure of their homes. The fliers read: “FINAL NOTICE – Respond only to this notice immediately.” This is similar to First Gov scam, which the Attorney General stopped late last year.

When homeowners called the number on the flyer, they were told their mortgages could be renegotiated to a lower monthly payment. Victims, however, were required to pay thousands of dollars in up-front fees and were instructed not to contact their lenders.

Victims were assured the company had “private lenders and specialists exclusive to their company who are very experienced in the options and methods used to renegotiate home loans,” yet neither of the women who operated the company had real estate licenses, legal training, or any experience in the home mortgage market.

Investigators found no evidence of any successful loan modifications and most of the victims were either forced into bankruptcy or lost their homes to foreclosure.

Assets seized through search warrants served at Foreclosure Freedom and the bank accounts held by Mary Alice Yraceburu and Marianne Curtis totaled over $10,000.

If convicted of all charges, Yraceburu and Curtis face 21 years in prison.

Copies of the complaint and arrest warrant affidavits are attached.

Los Angeles – Attorney General Edmund G. Brown Jr. today discussed charges filed Thursday evening against three individuals -- Howard K. Stern, Doctor Khristine Eroshevich, and Doctor Sandeep Kapoor – who “engaged in a criminal conspiracy to illegally furnish” controlled substances to Anna Nicole Smith.

“There is ample evidence that Howard K. Stern and these two physicians engaged in a criminal conspiracy to illegally furnish unwarranted amounts and combinations of highly addictive medications to Anna Nicole Smith,” Attorney General Brown said.

Over a period of three years, Doctor Khristine Eroshevich, Doctor Sandeep Kapoor, and Howard K. Stern furnished thousands of prescription pills to Ms. Smith, including opiates, benzodiazapines, and other controlled and non-controlled substances.

Doctor Eroshevich and Doctor Kapoor falsified prescriptions and furnished thousands of prescription pills to Anna Nicole Smith, often for no legitimate medical purpose. Howard K. Stern funneled those medications to Anna Nicole Smith.

The investigation, launched in March 2007, was a cooperative effort between Attorney General Brown’s Office, the Medical Board of California, the U.S. Drug Enforcement Administration, and the California Department of Insurance, Fraud Division.

Agents from these organizations worked in conjunction with the Los Angeles County District Attorney’s Office executing multiple search warrants, reviewing over 100,000 computer images and text, analyzing patient profiles and pharmacy logs, and have interviewed dozens of witnesses throughout the country and abroad.

Eleven felony counts were filed Thursday by the Los Angeles County District Attorney’s Office.

Counts 1-3: Each defendant was charged with conspiracy counts for prescribing, administering, and dispensing controlled substances to an addict; obtaining a controlled substances by fraud, deceit, or misrepresentation; obtaining a controlled substance by false name or address; issuing a prescription that is false or fictitious; and repeatedly and excessively prescribing, furnishing, dispensing, or administering drugs.

Count 4: Howard K. Stern and Doctor Kapoor were charged with unlawfully prescribing a controlled substance.

Count 5: Howard K. Stern and Doctor Eroshevich were charged with unlawfully prescribing a controlled substance.

Count 6: Doctor Kapoor was charged with obtaining a prescription for opiates by fraud, deceit, or misrepresentation.

Count 7: Doctor Eroshevich was charged with obtaining a prescription for opiates by fraud, deceit, or misrepresentation.

Count 8: Doctor Kapoor was charged with obtaining a prescription for opiates by giving a false name or address.

Count 9: Doctor Eroshevich was charged with obtaining a prescription for opiates by giving a false name or address.

Count 10: Howard K. Stern and Doctor Kapoor were charged with prescribing, administering, or dispensing a controlled substance to an addict.

Count 11: Doctor Eroshevich was charged with prescribing, administering, or dispensing controlled substances to an addict.

Bail was set for $20,000 for each defendant. Arraignment dates have been set for May 2009.

Doctor Kapoor and Mr. Stern turned themselves in to California Department of Justice agents at the Whittier Police Department Thursday night, and subsequently posted $20,000 bond. Doctor Eroshevich is expected to turn herself in and be taken into custody early next week.

Prescription drug abuse is not isolated to this case. Attorney General Brown’s office has investigated and filed charges in more than 200 cases -- both against physicians who have abused their trust and patients who go from doctor to doctor in search of drugs.

Attorney General Brown has also made it a priority to improve California’s prescription monitoring program, known as CURES, which is a critical tool in assisting law enforcement in investigating these types of crimes.

Los Angeles – Attorney General Edmund G. Brown Jr. announced that three individuals -- Howard K. Stern, Doctor Khristine Eroshevich, and Doctor Sandeep Kapoor – have been charged with conspiring to “repeatedly and excessively” furnish controlled substances to Anna Nicole Smith.

Attorney General Brown will discuss the charges and the arrests Friday, March 13 at 10:00 a.m.

“These individuals repeatedly and excessively furnished thousands of prescription pills to Anna Nicole Smith, often for no legitimate medical purpose,” Attorney General Brown said. “There is ample evidence that Doctor Eroshevich and Doctor Kapoor violated their ethical obligations as physicians, while Mr. Stern funneled highly addictive drugs to Ms. Smith.”

Over a period of three years, Doctor Khristine Eroshevich, Doctor Sandeep Kapoor, and Howard K. Stern furnished thousands of prescription pills to Ms. Smith, including opiates, benzodiazapines, and other controlled and non-controlled substances.

Doctor Eroshevich and Doctor Kapoor falsified prescriptions and prescribed unwarranted amounts and combinations of highly addictive medications. Howard K. Stern, Ms. Smith’s attorney and confidant, served as a vital link in obtaining, delivering, and administering these prescription drugs to Anna Nicole Smith.

What: Brown to Discuss Charges and Arrests in Anna Nicole Smith Investigation

Date: Friday, March 13, 2009

Time: 10:00 a.m.

Location: Los Angeles Office of the Attorney General
First Floor
300 South Spring Street
Los Angeles, CA 90013-1230

The investigation, launched in March 2007, is a cooperative effort between the California Attorney General’s Office, the Medical Board of California, the U.S. Drug Enforcement Administration, and the California Department of Insurance, Fraud Division.

Agents from these organizations worked in conjunction with the Los Angeles County District Attorney’s Office executing multiple search warrants, reviewing over 100,000 computer images and text, analyzing patient profiles and pharmacy logs, and have interviewed dozens of witnesses throughout the country and abroad.

Eleven counts were filed today. Arraignment dates for the defendants have not yet been scheduled. Bail was recommended at $20,000 for each defendant.