Doctors busted in $30 million surgery scam

updated 1:12 p.m. ET May 17, 2007

SANTA ANA, Calif. - Three doctors were charged with billing insurers for $30 million of unnecessary surgery performed on hundreds of patients recruited from around the country.

Authorities said the patients received money or low-cost cosmetic procedures for participating in the “rent-a-patient” scam at Unity Outpatient Surgery Center.

More than $5 million of the insurance claims were paid, authorities said.

Arrested Wednesday were Dr. Michael Chan, an obstetrician; Dr. William Hampton, a surgeon; and Dr. Mario Z. Rosenberg, a gastroenterologist.

Each was charged with 47 felony counts including conspiracy after billing 19 insurance companies for what authorities said were unnecessary colonoscopies and surgeries on 940 patients. Bail ranged from $1 million to $2.3 million.

Each doctor could face nearly 50 years in prison. The California Medical Board was also pursuing suspension of their licenses.

Fourteen other people — five administrators and nine recruiters — have been charged as part of a four-year investigation.

“Doctors need to know if they commit insurance fraud, they may be trading in their scrubs for prison jumpsuits,” District Attorney Tony Rackauckas said.

Chan, 61, was the owner and medical director at Unity. Authorities said he performed 211 unnecessary procedures on 208 patients, billing $9.5 million in claims, of which $1.8 million was paid to the clinic.

Rosenberg, 60, and Hampton, 51, also performed hundreds of procedures, billing insurers $21 million in claims, of which $3.3 million were paid, prosecutors said.

Their first court appearance was pending. It was not immediately known whether any had retained attorneys.

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