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Purple Heart recipient sentenced in Skid Row Medicare fraud case

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Andres Aguila/KPCC

A federal trial centered on a scheme in which transients in LA's Skid Row were recruited to participate in a Medicare scam.

In what federal prosecutors called a “significant” case of Medicare fraud, a judge on Monday sentenced Estill Mitts to 18 months in prison for “recruiting thousands” of Skid Row transients for hospital procedures they didn’t need.

Mitts operated the 7th Street Christian Day Center on Skid Row as a front for the operation, which defrauded Medicare and Medicaid of nearly $10 million, said Assistant U.S. Attorney Consuelo Woodhead.

In court, Mitts, 68, who was wounded in Vietnam and spent 20 years in the military, said he “shed blood” for the country and was “embarrassed” by his actions. “I’ve spent my life as a law abiding citizen,” he said. Mitts maintained he was a relatively minor player in the scheme.

But Woodhead said Mitts was the “ringleader” of an operation that included three hospitals: the former City of Angels Hospital, and two facilities owned by Pacific Health Corporation — the former L.A. Metropolitan Medical Center and the former Tustin Hospital and Medical Center.

Eight people, including Mitts, have pleaded guilty in the case.

Court filings showed Mitts and his co-conspirators expected to squeeze $6,500 per patient from Medicare and Medicaid, and that Mitts could round up at least 60 bogus patients a month.

U.S. District Judge George King said Mitts’ conduct was “fueled by greed” and warned it bred “contempt” for the Medicare program.

“Los Angeles is actually one of the national epicenters of healthcare fraud,” Woodhead said. She pointed to the area’s plethora of elderly residents and people on Medi-Cal (California's version of Medicaid) as reasons. Private healthcare insurance fraud is also common in the L.A. area, she said.

The case came to the attention of federal prosecutors after Los Angeles police noticed patients from hospitals being dropped off in the Skid Row area. Initially, they believed it was a case of “patient dumping.” Later, investigators determined hospitals involved in Medicare fraud were returning the transients, who had been paid a small amount for their participation.

The judge ordered Mitts to re-pay nearly $10 million to the federal government. Prosecutors conceded they’ll likely never see that money. They said Mitts received about $1 million personally, but could determine where the rest of the money ended up.

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