Former Hospital CFO Pleads Guilty in Skid Row Kickback Scheme

The former CFO of Tustin Hospital and Medical Center in Los Angeles has pleaded guilty to paying illegal kickbacks for patients recruited from the city's "Skid Row" area, the U.S. Attorneys Office in Los Angeles has announced.

In a plea agreement filed in United States District Court Tuesday, Vincent Rubio 49, of Los Angeles, admitted paying kickbacks to "marketers" who recruited homeless people and transported them to Tustin Hospital, federal prosecutors said in a media release. With the plea, Rubio faces up to 15 years in federal prison. He is expected to make his initial appearance in United States District Court on March 1.

Rubio admitted to participating in a scheme to pay Estill Mitts, who operated a center on Skid Row. The center allegedly recruited homeless people to receive unnecessary health services and others to refer homeless Medicare and Medi-Cal beneficiaries to Tustin Hospital for in-patient hospital stays. Tustin Hosptial entered into "consulting" contracts intended to conceal the kickbacks. Tustin billed Medicare and Medi-Cal for in-patient services provided to the recruited homeless people, including those for whom in-patient hospitalization was not necessary, according to the federal government.

Rubio also admitted that he failed to report the payments he received from one of the marketers on his federal tax returns, the feds added.

Tustin is a subsidiary of Pacific Health Corp., which also owns Los Angeles Metropolitan Medical Center, Anaheim General Hospital, and Bellflower Medical Center.

Rubio is one of five people charged so far in an ongoing investigation into healthcare fraud related to Skid Row residents. Mitts, 65, of Los Angeles, pleaded guilty in September 2008 to conspiracy to commit healthcare fraud, money laundering, and tax evasion, and he is scheduled to be sentenced on June 21.

Rudra Sabaratnam, 65, one of the owners of City of Angels Hospital in Los Angeles, pleaded guilty in December 2008 to paying illegal kickbacks for patient referrals, and he is scheduled to be sentenced on April 5. Dante Nicholson, 52, senior vice president of City of Angels, pleaded guilty in March to paying illegal kickbacks for patient referrals, and he is scheduled to be sentenced on June 14. Robert Bourseau, co-owner of City of Angels, pleaded guilty in June to paying illegal kickbacks, and he is scheduled to be sentenced on Feb. 22, according to the federal government.