Attorney General Lockyer Announces Four Arrests, Two Convictions in Crackdown on Medi-cal Fraud by Blood Laboratories

(LOS ANGELES) – In a continuing crackdown on fraudulent Medi-Cal claims by laboratories, Attorney General Bill Lockyer today announced the arrest of four medical laboratory operators in Los Angeles on charges of stealing over $500,000 from California's health care program for the poor.

The felony complaints involve the owners and operators of the New Era Medical Laboratory and California Lab Access, both located in Los Angeles. Arrested and charged Friday with felony counts relating to Medi-Cal fraud were Benjamin Lopez, 50, Myrna Lopez, 49, Eduardo Saludo, 38, all of Los Angeles; and Tirso Jamora, 49, of Placentia. Still being sought on a felony warrant is laboratory owner Linda Dizon, 47, of Los Angeles.

Lockyer also announced the convictions of two other medical laboratory operators in a separate case involving five facilities in Los Angeles and Orange counties. Lourdes Navarro, 41, of Glendale, and Imran Shams, 41, of Brooklyn, N.Y., were convicted recently in connection with Hospital Circle Medical Laboratory in Huntington Beach, California Automated Laboratory and Delps Clinical Labs in Burbank, Clintox Laboratories in Tarzana and Physicians Quality Laboratory in Whittier.

With these enforcement actions, the number of felony cases involving medical laboratories total 35 over the last 16 months brought by the Attorney General's Bureau of Medi-Cal Fraud and Elder Abuse. There have been a total of 13 convictions in these medical lab cases to date.

"Scam artists who use medical laboratories to rip off the Medi-Cal system not only steal from the poor but also endanger others by building a black market for blood," Lockyer said. "Cracking down on these organized schemes is important to ridding the lab industry of Medi-Cal fraud and stop the trafficking of blood."

In the most recent case, the co-owners and operators of the Los Angeles laboratories were found to have billed the state more than $2.5 million for blood tests since acquiring control of the New Era Medical Laboratory at the end of June 1998 and California Lab Access in January 1999. In the complaint filed in Sacramento County Superior Court, the defendants were accused of defrauding the Medi-Cal program of more than $500,000 and engaging in identity theft.

According to the Attorney General's Bureau of Medi-Cal Fraud and Elder Abuse, the organized crime scheme was designed to quickly steal millions of dollars from the Medi-Cal program and avoid detection. Within months of acquiring New Era Medical Laboratory, the five defendants allegedly increased Medi-Cal billings through fraudulent claims that involved the unauthorized use of physician names and Medi-Cal provider numbers. Under Medi-Cal rules, a laboratory cannot claim payment for blood tests unless it includes the name of the doctor who ordered the blood sample. The five owners shut down the laboratory after eight months, then repeated the scheme by acquiring and operating California Lab Access for seven months.

In the earlier case, Shams and Navarro were convicted on felony counts of Medi-Cal fraud, grand theft, money laundering, and identity theft for using the names of legitimate physicians without permission and filing thousands of false claims with the state for medical tests never performed. The Attorney General's Bureau of Medi-Cal Fraud and Elder Abuse seized approximately $1.1 million in uncashed warrants, which were returned to the Medi-Cal program.

Clinic owner Navarro was sentenced to five years in prison upon entering her guilty plea and ordered to pay $200,000 in restitution by the end of the year. Navarro also was required to surrender her license as a clinical laboratory scientist and prohibited from owning or working in any health care business. Orange County Superior Court Judge Robert Gallivan suspended the prison sentence under a plea agreement.

Navarro's partner Shams remains in custody pending sentencing in October after pleading guilty to charges of Medi-Cal fraud. A third laboratory owner, Zubair Younis, 42, of Brooklyn, N.Y., is being sought on a felony warrant.

The state's Medi-Cal program underwrites the medical expenses of more than five million low-income adults, children and disabled persons in California. Under existing federal law, the state Department of Health Services, which administers the Medi-Cal program, may prevent a provider convicted of Medi-Cal fraud from participating in the program for up to five years.