Healthy locals linked to fraud

Two more people have been implicated in the largest medical insurance fraud case in this country’s history, county prosecutors announced Friday.

In a 70-page indictment unsealed Friday, the grand jury indicted 19 people, 17 of whom were already charged, including doctors, lawyers, accountants and office workers associated with the now-closed Unity Outpatient Surgery Center in Buena Park. The group is accused of operating a surgery-for-profit operation involving more than 2,800 “patients,” some of whom lived in Newport Beach, Costa Mesa and Huntington Beach, officials said.

“We were shocked to discover that doctors were acting as real-life body snatchers, treating patients as if they were bodies on a medical conveyor belt for a quick buck,” said Orange County Dist. Atty. Tony Rackauckas. “The facts in this case represented greed in its worst form — people gambling with health in the name of cash. Every surgery could be fatal, and going under anesthesia is playing Russian roulette with a loaded gun.”

In the largest such undertaking this country has seen, thousands of healthy people from all over the United States were paid to come to the Unity surgery center in Orange County and go under the knife for ailments they did not have, authorities claim.

The three doctors implicated in the case, Michael Chan, William Hampton and Mario Rosenberg, performed more than 1,000 procedures, billing insurance companies $154 million and driving up insurance premiums for California residents, prosecutors say.

Patients were paid between $300 and $1,000, or given discounted or free cosmetic surgeries, to allow doctors to perform any number of operations on them, including colonoscopies, upper gastrointestinal procedures, surgeries for sweaty palms, which includes opening the chest and going under the lungs, and gynecological operations, prosecutors said.

The operation’s accountant, Andrew Harnen, collected millions from the insurance company and distributed it among the operation’s players, including the patient recruiters, the doctors, administrators and patients themselves, prosecutors said.

Nearly 1,500 healthy people were recruited from California, with 38 other states contributing “patients” as well, officials said.

Prosecutors chose not to charge the thousands of patients involved, instead prioritizing the people who made the fraud possible on a grand scale. Prosecutors said some of the patients are being prosecuted in their local jurisdictions.

A grand jury indictment supersedes the defendants’ previous charges, lumping all 19 into one case, officials said. All the defendants are scheduled to be arraigned July 10.

JOSEPH SERNA may be reached at (714) 966-4619 or at joseph.serna@latimes.com.