complaint[1]

Howard S. Veisz Marvin Wexler Lawrence C. Fox KORNSTEIN VEISZ WEXLER & POLLARD LLP 757 Third Avenue New York, New York 10017 (212) 41 8-86OOlfax (212) 826-3640 Susan Williams (SBN # 82976) Thomas Case (SBN # 116660) HENNELLY & GROSSFELD LLP 4640 Admiralty Way - Suite 850 Marina del Rey, California 90292 (310) 305-2 100lfax (310) 305-2116 Attorneys for Plaintiffs UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA ---Blue Cross and Blue Shield of Alabama; Blue Cross and Blue Shield of Massachusetts, Inc.; Blue Cross and Blue Shield of Michigan; Blue Cross and Blue Shield of Nebraska; Blue Cross and Blue Shield of North Carolina; BlueCross BlueShield Tennessee, Inc.; CareFirst Blue Cross and Blue Shield; Empire Healthchoice Assurance, Inc. d/b/a Empire Blue Cross Blue Shield; Excellus Health Plan, Inc. d/b/a Excellus Blue Cross Blue Shield; R.M.S.C.O., Inc.; Highmark Inc. d/b/a Highmark Blue Cross Blue Shield and d/b/a Highmark Blue Shield; Premera Blue Cross; Regence Blue Shield; Regence BlueCross BlueShield of Utah; Regence BlueCross BlueShield of Oregon; and Regence BlueShield of Idaho; Plaintiffs, Case No. - - COMPLAINT FOR VIOLATIONS OF THE RACKETEER INFLUENCED CORRUPT ORGANIZATIONS ACT; FRAUD; UNJUST ENRICHMENT; NEGLIGENT MISREPRESENTATION; CONSTRUCTIVE TRUST; VIOLATION OF CALIFORNIA BUSINESS AND PROFESSIONS CODE; DEMAND FOR A JURY TRIAL Jnity Outpatient Surgery Center, Inc.; Unity outpatient Surgery Center LLC; Millennium Outpatient Surgery Center, A Medical corporation; St. Paul Outpatient Surgery Medical Center, Inc.; St. Paul Surgery Viedical Center LLC; Anaheim West 3utpatient Surgery Center Inc.; Lincoln Management Group, LLC.; St. Francis outpatient Medical Center, Inc.; Inland Grange Medical Management, Inc.; Newport Superior Outpatient Medical Center, Inc.; Newport Superior Management Group LLC; Harbor Multi-Specialty Surgical Center, Inc.; Pacific Outpatient Medical Center, A Medical Corporation; Pacific Outpatient Medical Management Group LLC; Premium Outpatient Surgery Center, A Medical Corporation; Tam Vu Pham a/k/a Tom Vu; Huong Thien Ngo; Lan Thi Ngoc Nguyen; Gordon Merrick; Rosalinda Landon; Dee Francis; Andrew Harnen; Daniel Romanello; Ocher County Clinics, Inc.; Mitchell Rubin; Steven Rubin; Catherine Bach; Thu Ngoc Pham a/k/a Perry Pham; Michael Schneider; Ardalan Babaknia, M.D.; Michael Chan, M.D.; Byung Chun, M.D.; Moustafa El Alamy, M.D.; John Eugene, M.D.; Paratha Govindarajan, M.D.; Leon Halac, M.D.; William Hampton, M.D.; Lars Hanson, M.D.; Madhukar Jigjinni, M.D.; Chin Kim, M.D.; Edgar LJuncor, M.D.; Robert J. McKenna, M.D.; Martha Madrid, M.D.; Bharat Patel, M.D.; Amer Rayyes, M.D.; Daniel Rose, M.D.; Mario Z. Rosenberg, M.D.; Hamilton Sah, M.D.; Youn S. Toh, M.D.; Lloyd White, M.D.; and John Does 1-100, Defendants. 1 2 3 4 Table of Contents I. m O D U C T I O N ............................................... 2 Illegal Patient Recruiting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Fraudulent Billing, Diagnoses and Medical Records . . . . . . . . . . . . . . . . . . . 5 Patterns and Indicia of the Fraud . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Criminal Charges In Connection With the Fraud . . . . . . . . . . . . . . . . . . . . . . Plaintiffs' Claims and the Relief Sought . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ill 1 5 1. 6 7 8 9 10 11 12 13 ITI. 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 121 131 A. B. Plaintiffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Defendants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171 Clinics and Management Companies . . . . . . . . . . . . . . . . . . . . . . . . . 17 Owners/Administrators , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Surgeons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV. THE EN'TERPRISES, CONNl3CTIONS BETWEN T I E DEFENDANTS, AND DEFENDANTS' CASE-WIDE CONSPIRACY . . . . . . . . . . . . . . . . . . . . . . 30 A. The Vu Enterprise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. 2. 261 History of the Vu Enterprise . . . . . . . . . . . . . . . . . . . . . . . . . . . Personnel of the Vu Enterprise . . . . . . . . . . . . , . . . . . . . . . . . . . 31~ 32~ 34~ Page 3. Ownership, Management and Control, and Distribution of Profits, of the Vu Enterprise . . . . . . . . . . . . 35 Patient R.ecruiting Organization of the Vu Enterprise . . . . . . . . a. Anaheim West and Unity . . . . . . . . . . . . . . . . . . . . . . - . . 40~ 4. B. The Millennium Enterprise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. 2. Connections to the Vu Enterprise . . . . . . . . . . . . . . . . . . . . . . , Fraud at Millennium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 451 45 46! 51 I C. D. Harbor, Pacific and Premium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 491 Case-Wide Conspiracy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a PARTICIKARIZED FRAUDUL,ENT ACTS AND ILLdUSTRATIW3 PATIENT EXAMPLES . . . . . . . . . . . . . . . . . . . . . 52 A. Plaintiff Highmark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. 2. The Onyx Employee Cluster From Phoenix, Arizona . . . . . . . Other Highmark Patients . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . 54~ B. C. D. E. F. Plaintiff Tennessee Blue Cross (Magnetek Patient Cluster) . . . . . . . . Plaintiff Michigan Blue Cross (Textron Patient Cluster) . . . . . . . . . . . Plaintiff Empire (Pepsi and Fujicare Clusters) . . . . . . . . . . . . . . . . . . . 61 621 541 61 74~ Plaintiff Excellus (including Linvatec and Welch Allyri Clusters) . . . 76 Plaintiff Alabama Blue Cross (including Teledyne and Mount Vernon Mills Clusters) . . . . . . . . . . . 80 .. 11 G. Page Plaintiff Massachusetts Blue Cross ........................... 84 Plaintiff Premera Blue Cross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H. I. J. Plaintiff Regence (including Leatherman Tools and OHSU Clusters) . . . . . . . . . . . . . . . . . . . . . . . . 91 Plaintiff CareFirst (including Vertis Cluster) .................... Plaintiff Nebraska Blue Cross (Swifi and Millard Clusters) ........ Plaintiff North Carolina Blue Cross . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 81 1 I K. L. 9 10 11 l2 CLmSFORWLIEF..........................................,...a 99 FIRST CLAIM FOR RJ3LIEF (RICO - Vu Enterprise) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 13 SECOND CLAIM FOR RELIEF (RICO - Unity Clinic Enterprise) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 M R D CLAIM FOR RELIEF (RICO - St. Paul Clinic Enterprise) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 FOURTH CLAIM FOR RELIEF (RICO - Anaheim West Clinic Enterprise) . . . . . . . . . . . . . . . . . . . . . . . . . . 106 FIFTH CLAIM FOR &LIEF (RICO - St. Francis Clinic Enterprise) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 SIXTH CLAIM FOR RELIEF (RICO - Newport Superior Clinic Enterprise) . . . . . . . . . . . . . . . . . . . . . . . 110 SEVENTH CLAIM FOR RELIEF (RICO - Millennium Clinic Enterprise) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 111 ... 1 2 EIGHTJ3 CLAIM FOR RELIEF 3 Page (RICO - Harbor Clinic Enterprise) ................................ 114 (RICO - Pacific Clinic Enterprise) ................................ 116 (RICO - Premium Clinic Enterprise) .............................. 118 4 NIN'TH CLAIM FOR RELIEF 5 6 TENTH CLAIM FOR RELIEF 7 ELEVENTH CLAIM FOR RELIEF (ComonLawFraud) .......................................... 120 9 TWELFT'H CLAIM FOR RELIEF .. (unjust E ~ c h e n m e s t i ~ t i o.n ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 11 lo THIRTEENTH CLAIM FOR RELIEF (Negligent Misrepresentation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 13 14 15 l2 FOURTEENTH CLAIM FOR RELIEF (Constructive Trust) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 FIFTEENTH CLAIM FOR RELJEF (Violation of California Business & Professions Code $5 17200 et seq. . . 126 D E W F O R m Y m . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134 16 17 18 19 20 APPENDIXA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135 21 22 23 APPENDIXB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 APPENDIXC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 24 APPENDIXD 25 26 27 APPENDIXF 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 APPENDIXE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 iv UPENDIXL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162 UPENDIXM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 APPENDIXN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 APPENDIX0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170 APPENDIXP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172 APPENDIXQ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .174 APPENDIXR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176 APPENDIXS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178 APPENDIXT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180 APPENDIXIJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182 M P E m I . X W . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186 APPENDIXX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 ,MPENDLXY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 v Plaintiffs, by their attorneys Kornstein Veisz Wexler & Pollard LLP and Hennelly & Grossfeld LLP, for their Complaint allege, with knowledge as to their own actions and otherwise upon information and belief: I. JURISDICTION AND VENUE 1. This Court has jurisdiction over this action pursuant to 28 U.S.C. $ 1331, because the action arises under the laws of the United States; pursuant to 18 U.S.C. $ 1964(c), because the suit concerns violations of the Racketeer Influenced and Corrupt Organizations Act; and pursuant to 28 U.S.C. $ 1367, because the State and common law claims are so related to the federal claims that they form part of the same case or controversy. 2. This Court is the proper venue for this action pursuant to 28 U.S.C. $ 1391(b), because a substantial part of the events or omissions giving rise to Plaintiffs' claims occurred in this Judicial District, and, alternatively, because some of the Defendants may be found in this Judicial District and there is no District in which the action may otherwise be brought; and pursuant to 18 U.S.C. $ l965(b), because some Defendants reside in and/or transact business in this Judicial District, and the ends of justice require that other Defendants in other Districts be brought before this Court. INTRODUCTION 3. This action targets a massive health insurance fraud scheme that the California Insurance Commissioner has publicly described as "one of the most egregious, outrageous insurance fraud cases ' in history. Over the past several years, this scheme has caused tens of millions of dollars of losses to insurance companies and employee benefit plans, including Plaintiffs and the benefit plans that Plaintiffs administer. 4. 7 The Defendants who perpetrated the fraud are a group of corrupt outpatient surgery clinics in Southern California and the owners, administrators and surgeons who orchestrated and implemented the fraud at those clinics. Their scheme was simple but diabolical: The clinics used patient recruiters to recruit patients from across the country to come to the clinics and undergo completely unnecessary diagnostic and surgical procedures, so that the clinics and the surgeons could submit phony insurance claims for the unnecessary procedures. 5. To induce the patients to undergo the unnecessary procedures, the clinics (through the recruiters) offered each prospective patient either a cash payment for each unnecessary procedure the patient underwent, or promised the patient free or discount.edcosmetic surgery after the patient submitted to multiple unnecessary procedures. The clinics and surgeons made the unnecessary procedures appear medically justified by concocting phony symptoms and diagnoses for the patients and incorporating those fake symptoms and diagnoses in fictitious medical records. The clinics and surgeons then cashed in by submitting fraudulent and inflated bills for the unnecessary procedures to insurers, using the bogus medical records as back-up if insurers questioned the necessity of the procedures. 6. The unnecessary procedures that Defendant induced patients to undergo posed direct risks to the patients' health. Indeed, one of the procedures favored by Defendants because they charged so much for it -- so-called "sweaty palms surgery" -- involves collapsing the patient's lung and deactivating a nerve near the spine. 7. The scheme generated enormous fraudulent billings and illegal profits. The lead clinic Defendant, Unity Outpatient Surgery Center ("Unity"), alone billed almost $97 million in fraudulent claims to insurers in less than one year, according to State authorities. 8. It is no wonder, then, that the California Insurance Commissioner called this "one of the most egregious, outrageous insurance fraud cases." As the Orange County District Attorney stated in connection with the indictment of several of Unity's owners: "It is hard to imagine anything more reprehensible than deliberately operating on healthy people for illegal profit." Illegal Patient Recruit- 9. This outrageous fraud was fueled by a nationwide network of patient recruiters, sometimes referred to as "marketers" or "cappers." For each patient a capper delivered to a clinic, the capper received a fee of as much as $2,000 from the procuring clinic, a per-patient bounty that is illegal under California statutes that prohibit paying or receiving payment for patient referrals. In addition to locating the patients and persuading them to have the unnecessary procedures, the cappers helped verify that the patients had the requisite insurance coverage, facilitated the patients' transportation to and from the Defendant clinics, and coached the patients to lie if they were ever questioned by insurers or others outside the scheme. 10. The cappers had no medical training or expertise. Their only job qualifications were access to workers and their families who were covered by group health insurance, and the ability to persuade them to submit to unnecessary procedures in return for cash or cosmetic surgery. Using their recruiter network and those inducements. Defendants transformed their Southern California clinics into powerful fraud magnets, attracting patients from every region of the country, as well as large numbers of local patients. I 1 1. Exploiting patients' financial desperation or their desire for cheap cosmetic surgery, the cappers used their contacts in Asian, Hispanic and other communities, as well as various forms of advertising, to import thousands of patients to the Defendant clinics. Defendants took full advantage of that human trafficking, generating fraudulent bills for countless unnecessary diagnostic and surgical procedures and raking in millions of dollars in ill-gotten insurance benefits. Fraudulent Billing, Diagnoses and Medical Records 12. The unnecessary procedures performed most often in the fraud were procedures to diagnose upper and lower gastrointestinal problems. In those procedures -- upper GI endoscopies and lower GI colonoscopies -- the surgeon inserts a flexible tube with an attached mini-camera down the patient's throat (upper GI endoscopy) or into the patient's rectum (lower GI colonoscopy) to visualize the relevant areas and identify the source and cause of the patient's gastrointestinal symptoms. 13. To justify performing the upper GI endoscopies, the surgeons pretended, and falsely documented in medical records, that the patients had severe upper GI symptoms, such as chronic heartburn or chest or stomach pain, and assigned the patients fictitious upper GI diagnoses such as gastritis, esophagitis, ulcers or acid reflux disease. To justify performing the lower GI colonoscopies, the surgeons pretended, and falsely documented in medical records, that the patients had severe lower GI symptoms, such as rectal hemorrhaging or severe 5 abdominal pain, and assigned them fictitious lower GI diagnoses such as polyps, internal hemorrhoids and colitis. 14. Those supposed symptoms and diagnoses were fabricated for purposes of the fraud. Prior to coming to the Defendant clinics, patients had no history of being diagnosed or treated for their supposedly severe symptoms. And while the ostensible purpose of the endoscopies and colonoscopies was to diagnose a medical problem so that the proper course of treatment could be determined, patients did not have any follow-up treatment after Defendants supposedly diagnosed them. 15. Besides endoscopies and colonoscopies, the next most frequently abused procedure in the fraud was a highly unusual surgery to treat a rare disorder called palmar hyperhidrosis, in which the hands sweat profusely and uncontrollably. The so-called "sweaty palms surgery" (in medical parlance, a thoracoscopy with sympathectomy) is a complex and risky procedure in which a surgeon makes an incision under the patient's armpit, inserts a surgical probe through the incision, collapses the patient's lung to gain access to the spinal area, and then severs or clamps a nerve near the spine that controls perspiration of the hands. This surgery can produce serious complications, including bleeding in the chest cavity, pneumothorax (a condition that impedes breathing), infection, significant pain, and greatly increased sweating in other parts of the body. 16. To justify performing that risky surgery, Defendants pretended that the patients actually had the hyperhidrosis condition. The surgeons falsified the patients' medical records to state that they experienced chronic and profuse sweating of the hands so severe that it interfered with the patients' ability to work, to drive a car, and to engage in other essential life activities. Though true hyperhidrosis is rare in the non-fraud world, the unnecessary surgery was a favorite of Defendants, as well as of patients and patient recruiters, because Defendants fraudulently billed insurers more, and thus would pay patients and their recruiters more, for a sweaty palms procedure than for an endoscopy or a colonoscopy. 17. Moreover, because of the risk of serious complications, the sweaty palms surgery is supposed to be performed only as a last resort, after non-surgical treatments such as topical and other medications have been tried without success. But while the surgeons' write-ups often said that patients had experienced this condition since childhood, patients in fact had never seen a doctor or received any I prior treatment for sweaty palms before Defendants subjected them to this dangerous surgery. Defendants thus jeopardized patients' lives and well-being for no purpose other than to manufacture insurance claims. 18. Other unnecessary surgeries performed as part of the fraud included 1 nasal surgeries to help supposed breathing problems (septoplasties), gynecological procedures ostensibly to address menstrual dysfunction (laparoscopies or D & C's), and bladder procedures to diagnose urinary problems. Patterns and Indicia of the Fraud 19. Besides the inherent depravity of performing unnecessary and risky medical procedures on healthy people to make them vehicles for insurance fraud, other features of the fraud underscore its perversity and provide objective markers by which the fraud can be identified. 20. One such feature already noted is that a large number of patients were imported to Defendant clinics from outside of California, including from faraway States such as Florida, Minnesota, North Carolina, Virginia and Texas. Under normal circumstances, no patient would consider traveling outside his or her local area, let alone flying thousands of miles, to have a routine procedure such as an endoscopy or a colonoscopy that could easily be performed close to home. The only explanation for the influx of out-of-State patients to Defendant clinics is that they were wooed by a patient recruiter with the promise of something that no legitimate facility anywhere would provide -- a cash payment for submitting to an unnecessary procedure, or a payoff in free or low-cost cosmetic surgery. 21. To multiply the fraudulent billings for Defendants, as well as the cash payments and cosmetic surgery "credits" for the patients, many patients were subjected and submitted to more than one unnecessary procedure. In the majority of cases, Defendants claimed to have pefiomed an endoscopy & a colonoscopy on the same patient, often within only a day or two of each other. 22. In addition, many of the same patients who had previously undergone endoscopies and colonoscopies were also paid to undergo sweaty palms surgeries. That pattern makes no medical sense because an endoscopy or colonoscopy would never diagnose a need for sweaty palms surgery, and no legitimate doctor would respond to complaints about excessive hand sweating by scheduling an endoscopy or colonoscopy. Despite the absence of any logical or legitimate connection between these procedures, the health insurance claims that Defendants generated for a large number of patients follow the same distinctive and fraudulent pattern: endoscopy, then colonoscopy, then sweaty palms surgery. 23. Defendants paid many of those same patients to undergo still more unnecessary procedures, including nasal and gynecological procedures. And many patients went through the same procedure or cycle of procedures twice. As a result, Defendants sometimes billed for performing a half-dozen or more endoscopies, colonoscopies, sweaty palms surgeries and other procedures on the same person in the course of just a few months. 24. Often more than one member of the same family, and sometimes entire families including children, underwent unnecessary procedures at Defendant clinics. The record in this case includes dozens of examples of husbands and wives who were billed as having had parallel arrays of exploratory and surgical procedures, frequently undergoing the same unnecessary procedure on the same day. In some of the examples described below, Defendants not only billed for performing a series of unnecessary procedures on a husband and wife, they also billed for performing endoscopies, colonoscopies and other procedures on one or more of the couple's children -- children as young as 12 -- all in essentially the same order. It is inconceivable that multiple members of the same family would need such a sequence of procedures. 25. Further, large groups of patients often were recruited from the same workplace to go to Defendant clinics. The patients in those employee "clusters," many of whom were recruited by cappers in out-of-State workplaces, were subjected to unnecessary endoscopies, colonoscopies, sweaty palms surgeries and other procedures at the Defendant clinics over a short period of time. Virtually all of the patients in those clusters had multiple procedures, and the clusters include many examples in which multiple family members had multiple procedures. Thus, the damages to the insurers caused by those employee clusters were enormous. Because of the enormity of the damage, and because those employee clusters represent a confluence of fraud indicia so incriminating as to make any explanation other than fraud a virtual impossibility, such clusters are highlighted in succeeding sections of this Complaint. Criminal Charges In Connection With the Fr& 26. State and Federal criminal authorities have recently begun to prosecute this fraud. In July 2004, State criminal authorities arrested three alleged principals of Defendant Unity Outpatient Surgery Center, Defendants Tam Vu Pharn (aMa "Tom Vu"), his wife Huong Thien Ngo, and Lan Thi Ngoc Nguyen, along with several patient recruiters, and charged them with conspiracy "to commit . . . insurance fraud and grand theft" and other crimes. (People of the State of California v. Tam Vu Pham et al., Superior Court of the State of California, Orange County, Case No. 04CF2197 -- Felony Complaint at 5) ("State Felony Complaint"). The State Felony Complaint includes a long list of "materially false and fraudulent" health insurance claims that those Defendants submitted on patients treated at Unity Outpatient Surgery Center in Buena Park. 27. In announcing those arrests, State prosecutors described the fraud as unprecedented in its magnitude and in its heinous exploitation of patients. The prosecutors stated that, during an extraordinarily intense 8-month fraud spree from August 2002 to April 2003, the arrested Defendants recruited more than 5,000 patients nationwide to undergo unnecessary procedures at the Unity clinic, and billed almost $97 million in fraudulent claims to insurers. 28. In October 2004, Federal criminal authorities charged Defendant Millennium Outpatient Surgery Center and its principal, Defendant Thu Ngoc Pham ("Pham"), along with three patient recruiters, with mail fraud for bilking health insurers out of $34 million by "fraudulently bill[ing] private health insurers . . . for medical procedures performed on recruited patients that defendants . . knew to be unnecessary, corruptly induced, and falsely justified. . . ." (United States v. Millennium Outpatient Surgery Center et al., United States District Court for the Central District of California, Case No. SA CR 04-281 -- Indictment at 4-5) ("Federal Indi~trnent'~). Plaintiffs' Claims and the Relief Soupht 29. 7 Plaintiff Blue Cross and Blue Shield Plans have been hit hard by Defendants fraud. Together, they have paid in excess of $10 million to the Defendants on fraudulent insurance claims. On Plaintiffs' own behalf and indirectly on behalf of the employee benefit plans they administer, Plaintiffs bring this action under the Federal RICO statute and under State anti-fraud statutes and common law, to recover the payments that Defendants defrauded them into paying on fraudulent claims, and to enjoin Defendants and their confederates from continuing their egregious fraud. m. THE PARTIES A. Plaintiffs 30. Plaintiffs are health insurance companies and third-party administrators of health benefit plans that are licensees of the national Blue Cross and Blue Shield Association. All of the Plaintiffs are in the business of underwriting and administering health insurance and employee health benefit plans. For ease of reference, when the Complaint refers to "insurance" the reference encompasses both insurance and health benefits. 31. Blue Cross and Blue Shield of Alabama ("Alabama Blue Cross") is a not-for-profit corporation that is incorporated in Alabama and has a principal place of business in Birmingham, Alabama. Alabama Blue Cross administers employee health benefit plans primarily on behalf of employers headquartered in Alabama. 32. Blue Cross and Blue Shield of Massachusetts, Inc. ("Massachusetts Blue Cross") is a not-for-profit corporation that is incorporated in Massachusetts and has a principal place of business in Boston, Massachusetts. Massachusetts Blue Cross administers employee health benefit plans primarily on behalf of employers headquartered in Massachusetts. ) 33. Blue Cross and Blue Shield of Michigan ("Michigan Blue Cross") is ) 7 3 a not-for-profit corporation that is incorporated in Michigan and has a principal 1 place of business in Detroit, Michigan. Michigan Blue Cross administers 13 employee health benefit plans primarily on behalf of employers headquartered in Michigan. 34. Blue Cross and Blue Shield of Nebraska ("Nebraska Blue Cross") is a not-for-profit corporation that is incorporated in Nebraska and has a principal place of business in Omaha, Nebraska. Nebraska Blue Cross administers employee health benefit plans primarily on behalf of employers headquartered in Nebraska. 35. Blue Cross and Blue Shield of North Carolina ("North Carolina Blue Cross") is a not-for-profit corporation that is incorporated in North Carolina and has a principal place of business in Durham, North Carolina. North Carolina Blue Cross administers employee health benefit plans primarily on behalf of employers headquartered in North Carolina. 36. Bluecross Blueshield Tennessee, Inc. ("Tennessee Blue Cross") is a not-for-profit corporation that is incorporated in Tennessee and has a principal place of business in Chattanooga, Tennessee. Tennessee Blue Cross administers employee health benefit plans primarily on behalf of employers headquartered in Tennessee. 37. CareFirst Blue Cross and Blue Shield ("CareFirst") is a not-for-profit corporation that is incorporated in Maryland and has a principal place of business in Baltimore, Maryland. CareFirst administers employee health benefit plans primarily on behalf of employers headquartered in the District of Columbia and portions of Maryland and Virginia. 38. Empire Healthchoice Assurance, Inc. d/b/a Empire Blue Cross Blue Shield ("Empire") is a for-profit corporation that is incorporated in New York and has a principal place of business in New York, New York. Empire administers employee health benefit plans primarily on behalf of employers headquartered in the New York City metropolitan area. 39. Excellus Health Plan, Inc. d/b/a Excellus Blue Cross Blue Shield ("Excellus7') is a not-for-profit corporation that is incorporated in New York and has a principal place of business in Rochester, New York. Excellus administers employee health benefit plans primarily on behalf of employers headquartered in upstate New York. Excellus pays claims for medical services directly and through a wholly owned subsidiary, R.M.S.C.O., Inc. ("RMSCO"). RMSCO is incorporated in New York and has a principal place of business in Fayetteville, New York. Excellus and RMSCO are collectively referred to herein as "Excellus." 40. Highmark Inc. ("Highmark") is a not-for-profit corporation that is incorporated in Pennsylvania and has a principal place of business in Pittsburgh, Pennsylvania. Highmark administers employee health benefit plans primarily on behalf of employers headquartered in the western and central portions of 15 Pennsylvania. 41. Premera Blue Cross ("Premera77) a not-for-profit corporation that is is incorporated in Washington and has a principal place of business in Mountlake Terrace, Washington. Premera administers employee health benefit plans primarily on behalf of employers headquartered in portions of Washington and Alaska. 42. Regence BlueShield, Regence BlueCross BlueShield of Utah, Regence BlueCross BlueShield of Oregon and Regence BlueShield of Idaho are not-for-profit corporations that are either wholly owned or managed by The Regence Group. Regence BlueShield is incorporated in Washington, has a principal place of business in Seattle, Washington, and administers employee health benefit plans primarily on behalf of employers headquartered in Washington. Regence BlueCross BlueShield of Utah is incorporated in Utah, has a principal place of business in Salt Lake City, Utah, and administers employee health benefit plans primarily on behalf of employers headquartered in Utah. Regence BlueCross BlueShield of Oregon is incorporated in Oregon, has a principal place of business in Portland, Oregon, and administers employee health benefit plans primarily on behalf of employers headquartered in Oregon. Regence BlueShield of Idaho is incorporated in Idaho, has a principal place of business in Lewiston, Idaho, and administers employee health benefit plans primarily on 16 behalf of employers headquartered in Idaho. These Regence plans are collectively referred to in this Complaint as "Regence." B. Defendants Clinics and Management Companies 43. Unity Outpatient Surgery Medical Center, Inc. is a California corporation that did business as Unity Outpatient Surgery Center ("Unity"). Unity was a surgical clinic located at 5730 Beach Blvd., Buena Park, California. 44. Unity Outpatient Surgery Center LLC ("Unity LLC") is a California limited liability company located at 5730 Beach Blvd., Buena Park, California. Unity LLC was the management company for Unity. 45. St. Paul Outpatient Surgery Medical Center, Inc. is a California corporation that does business as St. Paul Outpatient Surgery Center ("St. Paul"). St. Paul is a surgical clinic located at 5730 Beach Blvd., Buena Park, California. St. Paul was a successor clinic to Unity, located at the same address. 46. St. Paul Outpatient Surgery Medical Center LLC ("St. Paul LLC") is a California limited liability company located at 5730 Beach Blvd., Buena Park, California. St. Paul LLC is the management company for St. Paul. 47. Anaheim West Outpatient Surgery Center, Inc. is a California corporation that did business as Anaheim West Outpatient Surgery Center ("Anaheim West '). Anaheim West was an outpatient surgical clinic located at 408 7 South Beach Blvd., Suite 112, Buena Park, California. 48. Lincoln Management Group, LLC ("Lincoln Management") is a California limited liability company with offices at 408 South Beach Blvd., Buena Park, California and 2329 Private Road, Newport Beach, California. Lincoln Management was the management company for Anaheim West. 49. St. Francis Outpatient Medical Center, Inc. is a California corporation that did business as St. Francis Outpatient Medical Center ("St. Francis"). St. Francis was an outpatient surgical clinic located at 408 S. Beach Blvd., Buena Park, California. St. Francis was an offshoot of Anaheim West, located at the same address. 50. Inland Orange Medical Management, Inc. ("Inland") is a Nevada corporation with offices at 408 S. Beach Blvd., Buena Park, California. Inland was the management company for St. Francis. 51. Newport Superior Outpatient Medical Center, Inc. is a California corporation that did business as Newport Superior Outpatient Medical Center ("Newport Superior"). Newport Superior was an outpatient surgical clinic located at 1501 Superior Avenue, Newport Beach, California. 52. Newport Superior Management Group, LL,C ("Newport Superior Management") is a California limited liability company with offices at 1501 Superior Avenue, Newport Beach, California. Newport Superior Management was the management company for Newport Superior. 53. Harbor Multi-Specialty Surgical Center, Inc. is a California . corporation that does business as Harbor Multi-Specialty Surgical Center ("Harbor"). Harbor is an outpatient surgical clinic located at 1501 Superior Avenue, Newport Beach, California. Harbor is an offshoot of Newport Superior, located at the same address. 54. Millennium Outpatient Surgery Center, A Medical Corporation, is a California corporation that does business as Millennium Outpatient Surgery Center ("Millennium"). Millennium is an outpatient surgical clinic located at 1200 N. Tustin Ave., Santa Ana, California. 55. Pacific Outpatient Medical Center, A Professional Corporation, is a California corporation that does business as Pacific Outpatient Medical Center ("Pacific"). Pacific is an outpatient surgical clinic located at 1041 East Yorba Linda Blvd., Placentia, California. 56. Pacific Outpatient Medical Management Group, LLC ("Pacific Management") is a California limited liability company with offices at 1041 East Yorba Linda Blvd., Placentia, California. Pacific Management is the management company for Pacific. 57. Premium Outpatient Surgery Center, A Medical Corporation, is a California corporation that does business as Premium Outpatient Surgery Center ("Premium '). Premium is an outpatient surgical clinic located at 17672 Beach Blvd., Huntington Beach, California. 7 Owners/Administrators - 58. Tam Vu Pham goes by the name Tom Vu (referred to hereafter as "Vu") and resides at 2959 Bluegrass Lane, Fullerton, California. Vu was an owner and administrator of several of the Defendant clinics, specifically Unity, St. Paul, Anaheim West, St. Francis and Newport Superior, either directly or through their respective management companies. Vu actively participated in, directed, and profited from, the fraud at those clinics. Vu was one of the individuals arrested by State criminal authorities in July 2004, and charged with multiple counts of conspiracy, insurance fraud, grand theft, paying cappers for the referral of patients, and tax evasion. 59. Huong Thien Ngo ("Ngo") is Vu's wife and resides at 700 Civic Center Drive West, Santa Ana, California. With Vu, Ngo was an owner and administrator of Unity, St. Paul, Anaheim West, St. Francis and Newport Superior, either directly or through their respective management companies. Along with her husband, Ngo actively participated in, directed, and profited from, the fraud at those clinics. Ngo was also a senior officer of several California limited liability companies that were established to submit fraudulent bills for unnecessary procedures performed at Unity, and that were named in the State Felony 20 Complaint, including St. John Surgical Group, LLC, North County Imaging, LLC, Valley Surgi-Group, LLC, and Universal Med Surgery Group, LLC. Ngo was arrested by State criminal authorities in July 2004 and charged with the same crimes as her husband. 60. L,an Thi Ngoc Nguyen ("Nguyen") resides at 500 N. Flower, Santa Ana, California. Nguyen is Ngo's aunt. Nguyen profited from the fraud at Unity and Anaheim West. Nguyen was arrested by State criminal authorities in July 2004, and charged with the same crimes as Vu and Ngo. 61. Gordon Merrick ("Merrick") resides at 1930 Broadway, New York, New York. Merrick was an owner of at least Unity and Anaheim West, either directly or through their respective management companies, and profited from the fraud at those clinics. With Ngo, Merrick was a senior officer or registered agent of several California limited liability companies that were established to submit fraudulent bills for unnecessary procedures performed at Unity, and that were named in the State Felony Complaint, including St. John Surgical Group, LLC, North County Imaging, LLC, Valley Surgi-Group, LLC, Healthstar Surgical Group, LLC, Allied Health Surgery Group, LLC, Atlantic Surgical Group, LLC, Primecare Surgical Group, LLC, Universal Med Surgery Group, LLC, Western Surgical Group, LLC, Community Surgical Group, LLC, and Rosemead Surgical Group, LLC. 62. Rosalinda Landon ("Landon") resides at 6710 Rhea Avenue, Reseda, California. Landon was an owner and administrator of at least Unity and Anaheim West, either directly or through their respective management companies. Landon actively participated in, directed, and profited from, the fraud at those clinics. With Ngo and Merrick, Landon was a senior officer or registered agent of several California limited liability companies that were established to submit fraudulent bills for unnecessary procedures performed at Unity, and that were named in the State Felony Complaint, including St. John Surgical Group, LLC, North County Imaging, L,LC, Valley Surgi-Group, LLC, Healthstar Surgical Group, LLC, Universal Med Surgery Group, LLC, Community Surgical Group, LLC, and Rosemead Surgical Group, LLC. Landon is identified in the State Felony Complaint as "an unnamed co-conspirator" of Vu, Ngo and Nguyen. 63. Dee Francis ("Francis") resides at 215 Perm Street, El Segundo, California. Francis was an owner of Unity, either directly or through its management company, and profited from the fraud at Unity. With Ngo, Merrick, and L,andon, Francis was a senior officer or registered agent of several California limited liability companies that were established to submit fraudulent bills for unnecessary procedures performed at Unity, and that were named in the State Felony Complaint, including St. John Surgical Group, LLC, North County Imaging, L,LC, Valley Surgi-Group, LLC, Healthstar Surgical Group, LLC, Universal Med Surgery Group, LLC, Community Surgical Group, LLC, and Rosemead Surgical Group, LLC. Francis is identified in the State Felony Complaint as "an unnamed co-conspirator" of Vu, Ngo and Nguyen. 64. Andrew Harnen ("Harnen") resides at 3668 N. Delta Ave., Rosemead, California. Harnen is an accountant who was an owner of Unity, either directly or through their respective management companies. Harnen actively participated in, directed and profited from, the fraud at those clinics. With Ngo, Merrick, Landon and Francis, Harnen was an officer or registered agent of several California limited liability companies that were established to submit fraudulent bills for unnecessary procedures performed at Unity, and that were named in the State Felony Complaint, including St. John Surgical Group, LLC, Valley Surgi-Group, LLC, Allied Health Surgery Group, LLC, Atlantic Surgical Group, LLC, Primecare Surgical Group, LLC, Universal Med Surgery Group, LLC, Western Surgical Group, LLC, Community Surgical Group, LLC, and Rosemead Surgical Group, L,LC. Harnen is identified in the State Felony Complaint as "an unnamed co-conspirator" of Vu, Ngo and Nguyen. 65. Daniel Romanello ("Romanello") resides at 2329 Private Road, Newport Beach, California. He was an owner of Anaheim West, either directly or through its management company, and profited from the fraud at Anaheim West. I 66. Michael Chan, M.D. ("Chan") resides at 10230 Artesia, Bellflower, California. Chan was a nominal owner of Unity, either directly or through its management company, who actively participated in, directed, and profited from, the fraud at that clinic. Chan is also a surgeon who actively participated in the scheme by performing, and fraudulently billing and documenting, unnecessary procedures at Defendant clinics, including Unity, Anaheim West and Millenium. Chan is identified in the State Felony Complaint as "an unnamed co-conspirator" of Vu, Ngo and Nguyen. 67. Ocher County Clinics, Inc. ("Ocher") is a California corporation. Ocher was an owner of Anaheim West through its ownership interest in Lincoln Management. Ocher profited from the fraud at that clinic. 68. Mitchell Rubin resides at 1431 Ocean Avenue, Santa Monica, California. Mitchell Rubin was an owner and senior officer of Ocher and was an owner of Anaheim West through Ocher's ownership interest in Lincoln Management. Mitchell Rubin profited from the fraud at that clinic. I 69. Steven Rubin resides at 700 L,ouisiana Street, Houston, Texas. Steven Rubin is an attorney who is the brother of Mitchell Rubin, was an owner and officer of Ocher, and was an owner of Anaheim West through Ocher's ownership interest in Lincoln Management. Steven Rubin organized Lincoln Management and also was the registered agent for St. Francis and its management company, Inland. Steven Rubin profited from the fraud at those clinics. 70. Catherine Bach ("Bach") resides at 1708 Ladera Vista Drive, Fullerton, California. Bach was an owner of Newport Superior, either directly or through its management company, and actively participated in, directed and profited from the fraud at that clinic. 71. Martha Madrid, M.D. ("Madrid") resides at 2 Cold Springs Road, Angwin, California. Madrid was the nominal owner of St. Paul and actively participated in, directed, and profited from, the fraud at that clinic. Madrid is also an anesthesiologist who actively participated in the scheme by performing, and fraudulently billing and documenting, anesthesia services for fraudulent procedures at St. Francis, Unity and St. Paul. 72. Thu Ngoc Pham goes by the name Perry Pham (referred to hereafter as "Pham") and resides at Garden Grove, California. Pham was the owner of Millennium and a predecessor clinic, either directly or through a management company, and actively participated in, directed, and profited from, the fraud at those clinics. Pham was one of the individuals arrested by Federal criminal authorities and charged with conspiracy and mail fraud in connection with the fraud at Millennium. 73. Michael Schneider ("Schneider") resides at 6871 Vista Del Sol, 1 Huntington Beach, California. Schneider was an owner of Premium who profited fiom ~e fiaud at that clinic. 74. Lars Hanson?M.D. ("Hanson") resides at 2763 Gainsborough Drive7 San Marino7California. Hanson was a nominal owner of Newport Superior and Newport Superior Management who actively participated in and profited fiorn the fiaud at that clinic. 75. Hamilton Sah, M.D. (Y3aW7)resides at 16307 South Cherry Fall Lane7 Artesia?California. Sah was a nominal owner of Anaheim West who facilitated and profited fiom the fiaud at that clinic. 76. Daniel Rose, M.D., ("Rose") resides at 50 Lakeside Drive7Buena Park7California. Rose was a nominal owner of St. Francis who facilitated and profited fiom the fi-aud at that clinic. 77. 7 Youn S. Toh7M.D. ("ToW7)resides at 12750 E. Alchester?Fountain Valley California. Toh was a nominal owner of Millennium who actively the participated in7directed and profited fi-om7 fi-aud at that clinic. Toh is also an 7 anesthesiologist who actively participated in the scheme by performing, and fraudulently billing and documenting anesthesia services for fraudulent 7 procedures at Millenni~m. Sureeons 78. Ardalan B a b h i a ?M.D. ("Babaknia7') resides at 10 Rue Chant~lly~ Newport Beach7California. Babaknia actively participated in the fraud scheme by performing, and fiaudulently billing and documenting, fraudulent procedures at Defendant clinics, including Millennium and Newport Superior. 79. Byung Chun?M.D. ("Chun") resides at 8693 Ffillcrest Road, Buena Park, California 90621. Chun actively participated in the fiaud scheme by performing, and fi-audulentlybilling and documenting, fiaudulent procedures at Defendant clinics including Anaheim West?Millennium and Premium. 7 80. Moustafa El Alamy, M.D. ("A1amy7') resides at 17527 Orna Drive, Granada Hills, California. Alamy actively participated in the fiaud scheme by performing, and fraudulently billing and documenting, fi-audulent procedures at Defendant clinics, including Anaheim West, Newport Superior, Millennium and Pacific. 8 1John Eugene M.D. ("Eugene") resides at 1 Open Brand Road7 J Rolling Hills, California. Eugene actively participated in the fiaud scheme by performing, and fiaudulently billing and documenting, fi-audulent procedures at Defendant clinics, including Anaheim West. 82. Paratha Govindarajan, M.D. ("Govindarajan") resides at 1711 W. Romeya Drive, Anaheim, California. Govindarajan actively participated in the fiaud scheme by performing, and fiaudulently billing and documenting fi-audulent J procedures at Defendant clinics, including but not limited to Harbor. 1 83. Leon Halac, M.D. ("Halac") resides at 3530 Mystic Pointe Dr. #101, Aventura, Florida. Halac actively participated in the £rauscheme by performing, and fiaudulently billing and documenting, fraudulent procedures at Defendant clinics, including but not limited to Millennium. 84. William Hampton, M.D. ("Harnpton") has an address at 3505 Long Beach Blvd., Long Beach, California. Hampton actively participated in the fraud scheme by performing, and fiaudulently billing and documenting, ftaudulent procedures at Defendant clinics, including Unity, St. Paul and Premium. 85. Madhukar Jigjinni, M.D. ("Jigjinni") resides at 19025 Cerro Villa Drive, Orange, California. Jigjinni actively participated in the fiaud scheme by performing, and ftaudulently billing and documenting, fraudulent procedures at Defendant clinics, including Millennium. 86. t Chin Goo Kim, M.D. ("Kim") resides at 8695 ~ l l c r e sRoad, Buena Park, California 90621. Kim actively participated in the fiaud scheme by performing, and fiaudulently billing and documenting, fraudulent procedures at Defendant clinics, including Unity and Anaheim West. 87. Edgar Lluncor, M.D. ("L,luncor") resides at 65 Saddleback Road, Rolling Hills, California. Lluncor actively participated in the fiaud scheme by performing, and fraudu1ently billing and documenting, fi-audulent procedures at 88. Robert J. McKenna, M.D. C'McKenna") resides at 424 Acacia Drive, Corona Del Mar, California. McKenna actively participated in the fraud scheme by performing, and fraudulently billing and documenting, fraudulent procedures at Defendant clinics, including Unity and St. Paul. 89. Bharat Patel, M.D. ("Patel") resides at 6440 E. Shire Way, Long Beach, California. Pate1 actively participated in the fraud scheme by performing, and fraudulently billing and documenting, fiaudulent procedures at Defendant clinics, including MAlennium and St. Paul. 90. h e r Rayyes, M.D. ("Rayyes") resides at 2032 Burnt Mill Road, Tustin, California. Rayyes actively participated in the fraud scheme by performing, and fkaudulently billing and documenting, fkaudulent procedures at Defendant clinics, including Newport Superior and Pacific. 91. Mario 2. Rosenberg, M.D. ("Rosenberg") resides at 1118 Pine Drive, Beverly Ells. Rosenberg actively participated in the fkaud scheme by performing, and fi-audulentlybilling and documenting, fiaudulent procedures at Defendant clinics, including Unity, St. Paul, Anaheim West, St. Francis, Newport Superior and Millennium. 92. Lloyd White, M.D. ("White") resides at 3610 Castle Rock Road, Diamond Bar, California. White actively participated in the fraud scheme by performing, and fraudulently billing and documenting, fi-audulentprocedures at Defendant clinics, including IJnity and Anaheim West. 93. The true names and capacities of the Defendants named herein as John Does 1 through 100, inclusive, are unknown to Plaintiffs. Plaintiffs therefore sue these Defendants by such fictitious names, and will seek leave of this Court to m e n d this Complaint to allege their true names and capacities when they have been ascertained. Plaintiffs are S o r m e d and believe and thereon allege that John Does 1 through 100, inclusive, have conspired and participated in, andor aided or abetted, the un1awfi.d conduct alleged in this Complaint are liable to Plaintiffs for their unlawful conduct. I. Y TEE ENTEWRISES, CONNECTIONS BETWEEN THE DEFENDANTS, AND DEFENDANTS' CASE-WIDE CONSPIRACY 94. The Defendants in this Complaint include 9 compt surgical clinics plus owners, administrators and surgeons associated with those clinics. Though each clinic represents a separate operating unit, and is pled as a separate enterprise in the Claims for Relief section of this Complaint, all of those clinics are closely related in various ways. Besides having committed insurance fraud in precisely the same way, the clinics are linked by comrnon surgeons, common patient recruiters and common patients. Examples of those linkages are provided by the illustrative patient examples and patient clusters detailed in later sections of this Complaint. 30 A. The Vu Enterprise 95. Five of the 9 Defendant clinics are bound not only by common surgeons, recruiters and patients, but also by common ownership, management personnel, and locations. Those are the clinics owned and controlled, in whole or in part, by Defendant Vu, who is being criminally prosecuted for fraud by State criminal authorities. The Vu clinics, besides being individual RICO enterprises, are so inter-connected as to also form a single collective RICO enterprise, referred to and pled in this Complaint as the "Vu Enterprise." 96. The clinics in the Vu Enterprise are Unity, St. Paul, Anaheim West, St. Francis and Newport Superior. Those clinics operated at three locations as set forth in the following table: Clinic Newport Superior Outpatient Medical Center St. Francis Outpatient Medical Center Anaheim West Outpatient Surgery Center - Defendant SurgeonsLocation Alamy, Babaknia, 1501 Superior Ave. Newport Beach, CA 92663 Rayyes, Rosenberg 408 South Beach Blvd. Anaheim, CA 92804 408 South Beach Blvd. Anaheim, CA 92804 - Rosenberg Alamy, Chan, Chun, Eugene, Kim, Rosenberg, White Chan, Kim, Hampton, McKenna, Rosenberg, -White Hampton, McKenna, Patel, Rosenberg . - Unity Outpatient Surgery 5730 Beach Blvd. Buena Park, CA 90620 Center St. Paul Outpatient Sureerv Medical Center 5730 Beach Blvd. Buena Park, CA 90620 97. As detailed below, those clinics represent a single, continuously operating enterprise that simply changed names and locations over a roughly fouryear period. 1. History of the Vu Enterprise 98. Tom Vu and his wife Huong Ngo have been in the outpatient surgery clinic fraud business for almost a decade. In 1995, Vu formed a corrupt clinic in Huntington Beach called Advanced L,aser Surgical Center ("Advanced Laser"). Ngo actively participated in the fraud at Advanced Laser. Vu s co-owners at Advanced Laser included Thu Ngoc (a/k/a Perry) Pham (a Defendant in this case who owned the Millennium clinic and is being prosecuted by Federal criminal authorities). A third co-owner of Advanced Laser, Mir Shadjareh, was indicted in April 2001 on Federal mail fraud charges relating to the operation of Advanced Laser, and pled guilty shortly thereafter. Vu and Pham, however, were not prosecuted in connection with the Advanced Laser fraud, and their fraud continued at the clinics in this case. 99. The fraud at Advanced Laser, like the later fraud at both the Vu 7 Enterprise clinics and Millennium, involved a well-developed patient recruiting network that recruited patients from all over the country to have outpatient cosmetic surgeries. Surgeons at Advanced Laser performed cosmetic surgery on the recruited patients, and Advanced Laser then billed insurers for functional surgeries that either were not performed at all or were performed solely as a pretext for billing. The fraud at issue in this case, in which patients were paid in cash or cosmetic surgery to undergo unnecessary procedures, represents an evolution of the fraud scheme that Vu, Pham and others implemented at Advanced 100. Advanced Laser closed in mid-1996. After owning and operating another fraud mill in Orange County for several years, Vu formed the first of the Vu Enterprise clinics, Newport Superior in Newport Beach, in February 1999. Vu had at least one co-owner at Newport Superior, Defendant Catherine Bach. Vu had a falling out with Bach in 2001, and in April 2001 Vu and several partners formed Anaheim West. A short time later, the same group began operating St. Francis, just one floor above Anaheim West at the same address. In June 2002, Vu had a falling out with his Anaheim West partners, left Anaheim West, and two I 1 months later, in August 2002, started the Unity clinic in Buena Park. On April 29, 2003, the Orange County District Attorney's Office executed a search warrant at I I Unity, effectively ending Defendants' ability to do business under the name of Unity. Only a few days later, however, Vu formed St. Paul at the same location, and within weeks St. Paul was in business perpetrating the same fraud. I I > 7 1I 101. In other words, the progression of the fraudulent clinics in the Vu Enterprise was from Newport Superior (early 1999 to early 2001), to Anaheim ? West and St. Francis (April 2001 to June 2002). to Unity (August 2002 to April 2003), to St. Paul (beginning in mid-2003). Each time Vu was interrupted by law enforcement activity or other events, he reopened shortly thereafter under a different name. 2. Personnel of the Vu Enterprise 102. Though the names and locations of the clinics in the Vu Enterprise changed, key personnel remained largely the same. Throughout, office staff of the clinics included Elvira Lopez, Adriana Ponce and Jessica Luna in a range of administrative positions such as front office manager and assistant administrator. When Unity "morphed" into St. Paul, Lopez and Ponce were given executive titles as Senior Vice Presidents of the management company, Unity L,LC. Many other clinic staffers moved from clinic to clinic as well. 103. Rosalinda Landon was a former patient recruiter at other corrupt clinics in the mid-late 1990's. Among other responsibilities, Landnn was in charge of the recruiting operation at both Anaheim WestISt. Francis and UnitylSt. Paul, as further detailed below. 104. Defendant Andrew Harnen was the accountant and more at both Anaheim West/St. Francis and UnityISt. Paul. Among other illegal activities, Harnen wrote checks for illegal payments to patient recruiters. I 3. Ownership, Management and Control, and Distribution of Profits, of the Vu Enterprise 105. Whether at Newport Superior, Anaheim West, St. Francis, Unity or St. Paul, the ownership and management of the clinics was organized in the same illegal and fraudulent fashion. California law requires that outpatient surgery clinics be owned and managed by a doctor or a medical corporation, and prohibits non-doctors or their corporations from doing so. To make it appear that they were complying with that rule, Vu and his partners at each clinic arranged for the clinic to be nominally owned and managed by a doctor. At Newport Superior, the doctor who was the nominal owner and/or "president" was Defendant Lars Hanson; at Anaheim West it was Defendant Hamilton Sah; at St. Francis it was Defendant Daniel Rose; at Unity it was Defendant Michael Chan; and at St. Paul it was Defendant Martha Madrid. The reality, however, is that those doctors merely fronted as owners, and it was Vu and his partners, who controlled the management company at each of the clinics, who actually owned and controlled the clinics. 106. Defendant Gordon Merrick, who was experienced in the establishment, licensing and accreditation of outpatient surgical clinics in California, actively participated in the creation and implementation of those sham ownership arrangements in furtherance of the fraud and in violation of California law. 107. The ownership and management structure at Anaheim West illustrates how this was done. In June 2002, Vu and his partners at Anaheim West got into a dispute over money, and the other partners locked Vu out of the clinic. Vu responded by suing his partners. In the ensuing litigation, both Vu and the other partners placed their once-secret ownership and management arrangement on full display. The filings in the litigation (Lincoln Management Group, LLC v. Anaheim West Outpatient Sur ery Center. Inc., Superior Court of California, Orange County, Case No. 02 CC 10632) (the "Lincoln Management Case"), including sworn Declarations by Vu and one of the partners, provide a window into their arrangement. 108. The filings in the Lincoln Management Case reveal that the owners of Lincoln Management -- and not Dr. Sah who supposedly owned Anaheim West -actually owned, operated, and received profits from, the clinic. The owners of Lincoln Management and their respective ownership shares were as follows: Defendant Ocher County Clinics, Inc. (a company owned by, among others, Defendants Mitchell Rubin and his brother, Defendant Steven Rubin) -- 40%; Sorrento Equities, LL,C (a company owned by Defendants Vu and Ngo) -- 40%; 1 I Defendant Gordon Merrick-- 10%; Defendant Rosalinda Landon --5%; and Defendant Daniel Romanello -- 5%. 109. The Management Services Agreement between Lincoln Management and Anaheim West provides that Lincoln Management would receive all the proceeds of the business of Anaheim West. Specifically, that Agreement provides that, in return for managing the clinic (Tom Vu was designated as the "office manager in charge of the day-to-day requirements of Site operations"), Lincoln Management was to receive "all Provider Collections generated by the Provider at the Site." "Provider Collections" is defined in the Agreement as "all fees" generated and received by the clinic "in connection with the performance of professional services," "including but not limited to office or hospital visits, consultation fees, medical treatment, medical diagnoses, surgery, diagnostic imaging, drugs, supplies and equipment," "whether payable directly by the patients or by private insurance or other third-party payers." 110. As for Defendant Hamilton Sah, the nominal doctorlowner of Anaheim West, Vu's Declaration in the Lincoln Management Case stated that Sah actually owned and controlled nothing at the clinic, was almost never at the clinic, and received only a monthly stipend from Lincoln Management -- essentially a monthly payment for the lease and prostitution of Sah's medical license. Vu's Declaration also stated that Lincoln Management had the same arrangement with Defendant Daniel Rose, an absentee doctor who was the nominal owner of St. Francis. In a sworn Declaration dated July 2,2002, Vu stated: In April 2001 plaintiff Lincoln Management founded and set up the Anaheim West Outpatient Surgery Center, and recruited Dr. [Hamilton] Sah as its medical director. He had no part in setting up the center, did not practice medicine there, generated none of its business, and was on the premises only twice in the last year. About a year later, the principals of Lincoln Management formed another entity, Inland Orange Medical Management Inc., to set up the St. Francis Outpatient Medical Center, and recruited Daniel M. Rose, M.D. to be its medical director on terms similar to those we had with Dr. Sah. I and my wife Huong Ngo, principals of plaintiff Lincoln Management (we actually hold our interest through another limited liability company, Sorrento Equities, LLC), invested $300,000 in the physical and administrative setup of the Anaheim West operation, which [Lincoln Management] operated and managed until June 7,2002. We purchased or leased all the equipment, and though Anaheim West Outpatient Surgery Center, Inc. was the named lessee on the lease of the premises at 408 South Beach Boulevard, Lincoln Management made the lease payments. In short, Lincoln Management did all the work at the surgery center except for the actual surgeries. In return for our establishing, investing in and managing the facility, Lincoln Management was entitled to all of the facilities fees charged to patients . . . Dr. Sah had been paid $6,000 per month by Lincoln Management to act as medical director of the surgery center, even though he did no work in that position, did not practice medicine there, and rarely even visited the premises before his sudden June 7,2002 takeover. Defendant Mitchell Rubin told me that Rubin paid Sah an additional $16,000 per month. 1I I 111. In substance, Vu stated that Defendant Sah was a shill and did virtually nothing with respect to Anaheim West other than to allow the misuse of his license and collect about $22,000 per month; rather, Vu and Ngo organized and ran the clinic, and they divided the fraudulent proceeds with Ocher County k , Clinics ( Mitchell and Steven Rubin), Merrick, Landon and Romanello. Those proceeds were very substantial. As Vu stated in his July 2,2002 Declaration: Under our management, the business had been thriving. As of June 7,2002, the facilities fees were being collected at the rate of about $2,000,000 per month. 112. The ownership and management structure at the other Vu Enterprise clinics was similar to that at Anaheim West. At Unity, for example, Unity LLC was the management company, and the owners of Unity LLC included a company controlled by Vu and Ngo called Nordenham Capital. Sharing in the proceeds were, again, Defendants Gordon Merrick and Rosalinda L,andon, now joined by Defendants Dee Francis and Andrew Harnen. Michael Chan was more active at Unity than Dr. Sah had been at Anaheim West -- performing and billing for medical procedures that were carried out as part of the scheme. Nevertheless, the lion's share of the clinic's profits went to Vu, Ngo, Merrick, Landon, Francis and Harnen, even though Chan nominally owned the clinic. 1 13. The same arrangement had been implemented previously at Newport Superior, where Lars Hanson was the doctorlowner. So, too, at St. Paul, where 39 Defendant Martha Madrid was the President and "medical director" but Vu and others got the money through the St. Paul management company, St. Paul LLC. 4. Patient Recruiting Organization of the Vu Enterprise a. Anaheim West and Unity 1 14. In his Declaration in the Lincoln Management Case, Vu stated that "we spent generously on advertising and marketing [at Anaheim West] which is why business was as good as it was." The "generous" spending on "marketing" to which Vu referred consisted of illegal payments to patient recruiters (and to patients) to get patients in the door to have the unnecessary endoscopies, colonoscopies, sweaty palms and other procedures that were the source of the clinic's substantial revenues. The hub of that recruiting effort and those payments was Defendant Rosalinda Landon. 1 15. As previously noted, Landon was a veteran of illegal patient recruiting to corrupt Southern California surgery clinics, having recruited many patients herself to such clinics in previous incarnations of the scheme. The recruiting operation that Landon oversaw at Anaheim West, however, was larger than in any of the prior schemes. Landon ran that operation using, inter alia, bank accounts of two patient recruiting companies that she had started years before, called Professional Services Management and Professional Services Exchange. Much of the funding for that illicit recruiting operation was provided to Landon's 40 recruiting companies via checks from L,incoln Management signed by Vu's wife Huong Ngo. Landon then paid the recruiters through checks that Landon signed on the accounts of Professional Services Management and Professional Services Exchange. 116. Between June 2001, shortly after Anaheim West was formed, and June 2002, when Vu fell out with his partners, Lincoln Management wrote scores of large checks to Professional Services Management and Professional Services Exchange to pay for recruiting patients to Anaheim West. During that 12-month period, Lincoln Management wrote as many as 6 checks a week to Professional Services Management and Professional Services Exchange, in amounts that routinely ranged from $20,000 to $60,000 per check, and that totaled more than $1.7 million. A chart of those checks is attached as Appendix A. 117. After Lincoln Management made those transfers to Landon's recruiting companies, Landon disbursed those funds to patient recruiters. Among the 20-odd recruiters that Landon paid with the funds supplied by Lincoln Management are several who are now defendants in the criminal cases brought by State and Federal prosecutors, including Sue Nanda (and her company Beauty Enhancement Specialists), Maria Rosales, Olga Toscano and Pancha Keophimphone. Other Anaheim West patient recruiters to whom Landon paid thousands of dollars in illegal recruiter fees included Bina Park, Lynn Lavong and 41 Kim Pham. A chart of checks that Landon paid to those recruiters is attached as Appendix B. 118. The State Felony Complaint previously identified charges five recruiters (and identifies others) that Vu, Ngo and Landon paid to recruit patients to Unity. The Felony Complaint identifies those recruiters and the amounts they received for delivering people to Unity as follows: 1. 2.. 3. 4. 5. 6. 7. Thuy Huynh Phuc Nhat Nguyen Olga Lilia Toscano Sue Nanda Maria Resales Pancha Keophimphone Amanda Tran $ 90,250.00 $204,800.00 $103,250.00 $247,500.00 $ 78,250.00 $208,750.00 $ 23,500.00 b. ThuvHuvnh 119. One of the recruiters identified in the State Felony Complaint is Thuy Huynh. In separate civil litigation involving Plaintiff Alabama Blue Cross, Huynh has admitted to recruiting patients for Defendant clinics for at least four years, from 1 999-2003. 120. Using a combination of community contacts and newspaper advertising, Huynh recruited patients covered by Plaintiffs and other insurers in areas across the country, including in Houston, San Jose, Virginia and Chicago. As part of her role in the scheme, Huynh met her recruits at Los Angeles Airport and drove them to Defendant clinics where they were immediately subjected to endoscopies and colonoscopies without any prior diagnosis or screening. Following the procedures, Huynh brought the patients to a Best Western or other motel for a brief recovery period, and then returned them to the airport to fly home. 12 1. Huynh ran her recruiting business through two companies, Pleasant Services, Inc. and T&T Medical Solutions, and also did business as Trang Thu Thuy Marketing. Huynh recruited patients to all the clinics in the Vu Enterprise. For example: -- Between September 2001 and June 2002, Lincoln Management paid 17 checks totaling $301,500 to Pleasant Services, Inc. and T&T Medical Solutions for recruiting patients to Anaheim West. Vu's wife, Defendant Huong Ngo, signed most of those checks. A chart of those checks is attached as Appendix C. -- Between January 1999 and February 2003, Newport Superior Outpatient Medical Center and Newport Superior Management Group LL,C paid more than 80 checks totaling almost $200,000 to Huynh and her recruiting companies for recruiting patients to Newport Superior. Defendants Catherine Bach or L,ars Hanson signed most of those checks. A chart of some of those checks is attached as Appendix D. -- Between September 2002 and October 2002, Huynh deposited eleven checks, totaling $86,500, that were made payable to Pleasant Services by Healthstar Surgical Group ("Healthstar"). Defendant Huong Ngo signed most of those checks. The officers of Healthstar are Merrick, Landon and Francis, and Healthstar is one of the entities referred to in the State Felony Complaint as having been established by Vu and his co-conspirators to serve as a billing alias for the submission of fraudulent claims by Unity. A chart of those checks is attached as Appendix E. -- Between October 2002 and June 2003, Huynh deposited eight checks, totaling $35,100, that were made payable to her or to Pleasant Services by North Orange County Imaging. North Orange County Imaging is another MerrickLandon-Francis entity that is identified as a Unity billing alias in the Felony Complaint. A chart of those checks is attached as Appendix F. -- Between May 2003 and July 2003, Huynh deposited five checks, totaling $42,900 that were made payable to her by Antioch Management, Inc. ("Antioch"). Defendant Andrew Harnen, the accountant for Unity and other components of the Vu Enterprise, signed those Antioch checks. A chart of those checks is attached as Appendix G. -- And between October 2003 and March 2004, St. Paul paid 14 checks totaling more than $58,000 to Huynh and Pleasant Services. Defendant Huong Ngo signed all of those checks except one, which was signed by Defendant Andrew Harnen. A chart of those checks is attached as Appendix H. B. The Millennium Enterprise 1. Connections to the Vu Enterprise 122. The head of the Millennium Enterprise was Thu Ngoc Pham, known as Perry Pham ("Pham"). As previously noted, Pham and Vu participated in surgery clinic fraud together in the mid-90's as principals of Advanced Laser Surgical Center, a forerunner of the criminal enterprises at issue here. 123. The Millennium Enterprise committed the same fraud in the same way as the clinics in the Vu Enterprise. Like the Vu Enterprise clinics, Millennium used a network of patient recruiters to solicit patients from across the country to have unnecessary procedures at Millennium in exchange for cash payments or credits toward free or discounted cosmetic surgery. The fraudulent procedures performed at Millennium were the same as those performed at the Vu Enterprise clinics -- primarily endoscopies, colonoscopies and sweaty palms procedures, as well as other procedures, including nasal and gynecological procedures. 124. The Vu Enterprise and Millennium shared common doctors. For example, Defendant surgeons Rosenberg, Alamy, Babaknia, Chun, Chan and Pate1 performed, documented and billed for fraudulent procedures at both Vu Enterprise clinics and at Millennium. 125. They also shared common patient recruiters. For example, the Federal Indictment against Pham and Millennium, and the State Felony Complaint 45 against Vu and others, state that both those sets of Defendants made illegal payments to recruiters Olga Toscano and Maria Resales. Thuy Huynh, the patient recruiter discussed above in connection with the Vu Enterprise, also recruited patients to, and was paid by, Millennium. For example, between April and June, 2002, Millennium paid Huynh's recruiting company, Pleasant Services, 6 checks totaling $27,000. A chart of those checks is attached as Appendix I. 126. Because the same patient recruiters brought patients both to Vu's clinics and to Millennium, the clinics also shared numerous individual patients. As illustrated in the patient clusters described below, many patients in those clusters who had multiple procedures had some of their procedures at Vu Enterprise clinics and others at Millennium. 2. Fraud at Millennium 127. Millennium was located at 1200 N. Tustin Avenue in Santa Ana. Pham opened the clinic in 1998 under another clinic name. He recruited a surgeon who had previously participated in the fraud at Advanced Laser to be the medical director of the clinic. In 2000, Pham changed the name of the clinic to Millennium. 128. The individual named in Millennium's corporate filings as the President of Millennium is Defendant Youn Toh, an anesthesiologist. Pham, however, was the actual owner and mastermind of the Millennium fraud. 129. The Federal Indictment against Pham and recruiters Olga Toscano, Maria Resales and Esmeralda Tello, alleges that Pharn managed and conducted the affairs of this enterprise with the assistance of his co-defendants and others. 130. The Federal Indictment states: 11. . . . defendants MOSC [Millennium] PHAM, TOSCANO, ROSALES, and ORTIZ, together with other coconspirators, caused and intended losses to health insurers of approximately $34,000,000. 12. Defendants PHAM and TOSCANO were managers, supervisors, organizers, and leaders of the criminal activity described in this count, which involved five or more persons criminally responsible for the commission of the offense and was otherwise extensive. 131. Summarizing the operations of the Millennium Enterprise, the Federal Indictment states, inter alia, that: 8. The objects of the conspiracy were to be accomplished as follows: (a) Defendant PHAM operated MOSC and directed and managed its employees and agents, including, without limitation, defendants, TOSCANO, ROSALES, and ORTIZ; (b) Defendant PHAM unlawfully compensated defendants TOSCANO, ROSALES, ORTIZ, and other patient recruiters for referring patients to MOSC; (c) Defendants PHAM, TOSCANO, ROSALES, and ORTIZ offered money and discounted cosmetic surgery to people who had private health insurance coverage sponsored by their employers in order to persuade them to undergo unnecessary outpatient medical procedures as patients at MOSC 47 (f) Defendants MOSC, PHAM, TOSCANO, ROSALES, and ORTIZ, using the United States mail and other private or commercial interstate carriers, fraudulently billed private health insurers, and caused them to be fraudulently billed, for medical procedures performed on recruited patients that defendants MOSC, PHAM, TOSCANO, ROSALES, and ORTIZ knew to be unnecessary, corruptly induced, and falsely justified; (h) Defendants MOSC, PHAM, TOSCANO, ROSALES, and ORTIZ, knowingly concealed and failed to disclose to health insurers, and knowingly caused others to conceal and fail to disclose to such health insurers, the true facts about their fraudulent and unlawful practices. 9. The false statements, half truths, concealed and omitted facts, and deceptive acts and practices used by defendants in furtherance of the Outpatient Fraud Scheme were material in that, had the private health insurers known the true and complete facts, they: (a) would not have authorized treatment of recruited patients at MOSC; (b) would not have paid for claims for unnecessary, corruptly induced, and falsely justified medical procedures; and (c) would not have incurred losses and other unnecessary costs attempting to review and investigate fraudulent medical claims. C. Harbor, Pacific and Premium 132. Three other Defendant clinics -- Harbor, Pacific and Premium -- have been involved in the same fraud as the Vu Enterprise clinics and Millennium. The fraud at Harbor, Pacific and Premium is identical to the fraud at those other clinics, with patients undergoing unnecessary endoscopies, colonoscopies and sweaty palms surgeries in exchange for cash or discounted cosmetic surgery, and the clinics fraudulently billing those fraudulent procedures to insurers such as Plaintiffs. That identical modus operand! is no coincidence, because Harbor, Pacific and Premium are related to the other clinics in numerous ways. 133. Harbor, Pacific and Premium are connected to other Defendant clinics through, among other connections, their common locations, owners/officers and anesthesiologists. For example, Harbor is located at the same address as Newport Superior. One of the owners/officers of the Harbor corporate entity, Defendant Lars Hanson, was also an owner/officer of the Newport Superior corporate entity. The principal anesthesiologist at Pacific, who assisted in all the Pacific procedures at issue, is Stewart Goldstein. Before becoming affiliated with Pacific, Goldstein had been an anesthesiologist at Newport Superior. Public records indicate that Premium was founded in May 2002 and that one of its original officers was an anesthesiologist, Raad Jeiroudi. Before assuming duties at Premium, Jeiroudi was the anesthesiologist on numerous procedures at Newport Superior. 49 134. Surgeons who participated in the fraud at Harbor, Pacific and Premium also participated in the fraud at other Defendant clinics. For example: -- Defendants Alamy and Rayyes, who performed fraudulent procedures at Pacific, also performed fraudulent procedures at other Defendant clinics -- Alamy at Millennium, Anaheim West and Newport Superior, and Rayyes at Newport Superior. -- Defendants Hampton and Chun, who performed fraudulent procedures at Premium, also performed procedures at other Defendant clinics -- Hampton at Unity and St. Paul and Chun at Millennium and Anaheim West. -- Defendant Govindarajan, who performed fraudulent procedures at Harbor, also performed procedures at Anaheim West and Newport Superior. 135. Harbor, Pacific and Premium also used the same patient recruiters as the other clinics. For example, as detailed above, all of the Vu Enterprise clinics, as well as Millennium, made substantial payments to a Texas-based patient recruiter named Thuy Huynh. Pacific's management company, Defendant Pacific Outpatient Medical Marketing Group, Inc. ("POMMGI"), also made payments to Thuy Huynh. In particular, between August and November 2001, POMMGI issued at least 8 checks totaling more than $100,000 in illegal recruiter payments to one of Thuy Huynh s recruiting companies, T & T Medical Solutions. Those checks were signed by an individual identified in public records as POMMG17s 50 7 registered agent, Andy Andalibian. A chart of those checks is attached as Appendix J. 136. One of the patient "clusters" in this fraud involved a large group of workers from an environmental services company in Phoenix, Arizona called Onyx, that received health benefits administered by Plaintiff Highmark. As detailed below, the patient recruiter who brought those patients to Southern California was an Onyx employee named Qui Pham. Though most of the patients in that cluster had fraudulent procedures at the Unity clinic, Qui Pham also brought several of the patients to have fraudulent procedures at Premium. 137. The Onyx cluster is only one of several examples detailed later in this Complaint in which particular patients had some fraudulent procedures at one of the Vu Enterprise clinics or Millennium, and also had one or more fraudulent procedures at Harbor, Pacific or Premium. &, u, Patient Examples HI-2, HI-5, HI-40, EX- 16, MA-4, RE-4, W,-5 and CF-1, infka. That sharing of patients between the Vu Enterprise clinics, Millennium, and Harbor, Pacific and Premium is proof positive that they were all engaged in the same coordinated fraud. D. Case-Wide Conspiracy 138. Those commonalities between the Vu Enterprise clinics, Millennium, Harbor, Pacific and Premium establish the existence of a case-wide conspiracy involving all of the fraud Defendants and the network of patient recruiters that 51 supplied patients to all of them. 139. The cornmon modus operandi, cornmon surgeons, comrnon recruiters and common patients within the scheme, as illustrated in the patient examples and patient clusters detailed below, establish the elements of a case-wide conspiracy to which all the fraud Defendants agreed and in which all of them participated. Each of those Defendants was aware of the existence of the overall scheme and of the participation of others in it, and that the benefits of each were dependent on the success of the broader fraudulent venture. 140. As a result, in addition to the joint and several liability within each RICO Enterprise alleged below, all the fraud Defendants are jointly and severally liable as co-conspirators for all of Plaintiffs' fraud damages caused by any of the Defendants. V. PARTICULARIZED FRAUDULENT ACTS AND ILLUSTRATIVE PATIENT EXAMPLES 141. Because of the magnitude of the fraud, and the deceptive tactics that Defendants employed, it is not feasible to provide detailed descriptions of all of Defendants' fraudulent claims in this Complaint. The following pages therefore describe a series of illustrative fraudulent claims, organized according to the Plaintiff involved. Many of these illustrative claims involve "clusters" of employees from the same workplace, which is one of the red flags of the fraud in 52 this case. 142. For many of the patient examples detailed below, it is believed that Defendants actually performed the procedures that they fraudulently billed, knowing that the procedures were completely unnecessary, and performing them solely as a pretext for fraudulent billing. In some cases, however, Defendants did not actually perform the procedure that was billed, and the billings were completely fictitious. Ultimately, it makes no difference whether, in a particular case, the procedures were performed but completely unnecessary or not performed at all, because either way the claims were fraudulent. 143. Because some surgeons were part of corporate practice groups, in some instances a procedure performed by one surgeon was billed under the name of another surgeon. In the examples below, an allegation that a particular Defendant surgeon was the surgeon on a particular fraudulent procedure means that the Defendant either performed, or claimed to perform, the procedure himself, knowing that it was fraudulent, or billed for it under the name of his corporate practice group, knowing that it was fraudulent. Again, it makes no difference whether the surgeon performed and billed for the procedure or only billed for the procedure, because both the performing and billing of the procedure were essential aspects of the fraud. A. Plaintiff Highmark 1. The Onyx Employee Cluster From Phoenix, Arizona 144. As part of the fraud targeted in this Complaint, approximately 40 employees of Onyx Environmental Services ("Onyx") and their dependents, all of whom live in the vicinity of Phoenix, Arizona, were transported to California to undergo out-patient surgical procedures, usually on a Saturday or Sunday, at Unity, St. Francis, Premium and other clinics during a one-year period from May 2002 through April 2003. Highmark received bills for more than 100 diagnostic and surgical procedures that Defendants ostensibly performed on the Onyx employees or family members during that year. Those bills were fraudulent. 145. Defendants billed for at least 33 endoscopies, 28 colonoscopies, and 6 four laparoscopies on those Onyx beneficiaries -- a total of 5 diagnostic procedures that diagnosed no actual conditions and led to no actual treatment. 146. Defendants also billed for performing "sweaty palm" surgery on at least 17 of the Onyx employees and family members. Five of those patients supposedly underwent this procedure twice, bringing the total to 22 sweaty palm surgeries. Moreover, at least 19 of those sweaty palms surgeries were ostensibly performed following colonoscopies and/or endoscopies, frequently performed in rapid succession. 147. In seven instances, Onyx patients who had endoscopies and colonoscopies returned for nasal surgeries referred to as septoplasties. In two cases, patients who had upper and lower GI procedures returned for both nasal surgery and supposed circumcisions. 148. Six of the Onyx patients who underwent procedures as part of this scam have admitted that the procedures were wholly unnecessary, and that a recruiter at their workplace paid them to undergo procedures at Unity and other clinics. The individuals who made those admissions are identified in this Complaint as patients HI-01, HI-02, HI-03,?-04, HI-05 and HI-06. To protect patient confidentiality, patients are identified throughout this Complaint by numerical code rather than by name. 149. In each case, money, transportation and motel rooms were provided by the recruiter, who drove them to and from the surgical center. 150. In addition, the patients were told to lie to Highmark about symptoms that they did not actually experience, and to lie about how they chose the Defendant doctors and surgical centers, if they were contacted about their claims. The patients were also instructed, in the event Highmark forwarded the benefit checks to them rather than to the doctor or surgical center, to deposit the check in ' a bank and then withdraw the same amount in cash and pay it to the recruiter. The employees were also told to keep each cash withdrawal below $10,000, the 55 threshold at which banks report cash transactions to the federal government. 151. The procedures that those 6 Onyx patients were paid to undergo are set forth in the following table. The amounts paid to the patients to induce them to participate in the scheme are set forth to the extent that information is presently available. ("N/A" in this and other charts in this Complaint denotes information not presently available.) ONYX PATIENTS WHO ADMITTED ACCEPTING PAYMENTS FOR UNNECESSARY PROCEDURES Patient Date of Code Procedure Clinic Surgeon Fraudulently Amount Paid to Billed Procedure Patient Endoscopy $400+ . Colonoscopy 1 $400+ Sweaty Palm 1 $4004- 1 HI-4 HI-4 5/19/02 N/A 6/1/02 N/A Kim Non-Defendant l HI-4 HI-4 HI-4 HI-4 M-5 I Surgery 7119/02 INon-~e fendant l ~ o n - ~ e f e n d a ncolonosco y t 811 7/02 Non-Defendant Non-Defendant Circumcision 9/8/02 Unity Non-Defendant Sweaty Palm Surgery 10125102 Unity White Septoplasty Endoscopy 9/14/02 Unitv N/A Colonoscopy Sweaty Palm Surgery Circumcision I $1,000 $900 $400+ $400+ $400+ Ht-3 ffl-1 Ht-1 Ht-2 HI-2 Ht-2 HI-2 10/4/02 Unitv Iwhite 71 9/02 Non-Defendant IN/A 1 8/3/02 5/25/02 5/26/02 8/24/02 Premium 10/4/02 152. Each of the Onyx patients who Defendants used to generate fraudulent claims was recruited and paid by a recruiter named Qui Pham, who Defendants paid to bring in patients. Qui Pham, a former Onyx supervisor who was fired by Onyx when his role in this scheme was exposed, also drove HI-1, HI- 2, HI-4,HI-6 and other participants to and from the surgical centers, shuttling them between Phoenix and Los Angeles in a rented van. 153. In order to lay the groundwork for the fraudulent claims, Qui Pham first collected health benefit identification cards and driver's licenses from the participants in Arizona, and faxed them to the clinics in California. 154. Qui Pham also acted as a collector and enforcer, making sure that, if the persons he recruited for surgeries received any benefit payments directly, they turned those payments over to the doctors or clinics. In at least one instance, Qui Pham threatened to harm a patient, the patient's wife and their daughter, if the patient did not hand over the proceeds of a $35,000 check that the patient had received from Highmark. 155. In addition to recruiting others, Qui Pham and his wife were themselves patients at Unity and St. Francis. Indeed, the fraudulent billing of procedures on both husbands and wives is a prominent and incriminating feature of the fraud scheme. The billing histories of Onyx husband and wife pairs who were transported from Arizona to California to generate fraudulent medical bills are summarized in the table below. CLAIMS FOR ONYX HUSBAND AND WIFE PAIRS 1 Date of Fraudulently Billed Patient Code Clinic Surgeon Procedure Procedure Rosenberg Endoscopy 5/4/02 St. Francis lHI-7 (wife) Rosenberg Colonoscopy HI-7 (wife) 5/5/02 St. Francis Eugene Sweaty Palm Surgery HI-7 (wife) - 5/27/02 St. Francis IHI-7(wife) , 7/20/02 !N O~-Defendant ,N/A N/A -Rosenberg Endoscopy 5/4/02 St. Francis ?-8 (husband) Rosenberg Colonoscopy .HI-8 (husband) - 5/5/02 St. Francis HI-8 (husband) 10/04/02 Unity Non-Defendant Sweaty Palm Surgery HI-8 (husband) 11/22/02 Unity N/A Sweaty Palm Surgery HI-15 (wife) 5/30/02 Anaheim West Non-Defendant Endoscopy H -5 (wife) I1 5/31/02 N/A Rosenberg Colonoscopy HI-16 (husband)] 5130102 1Anaheim West l ~ o n - ~ e f e n d a n t l ~ n d o s c o ~ ~ HI-16 (husband)! 5131/02 Anaheim West Rosenberg Colonoscopy .HI-1 (wife) 7119/02 Non-Defendant N/A Endoscopy HI-1 (wife) 7/20/02 Non-Defendant Chan L,aparoscopy HI-1 (wife) 8/3/02 Non-Defendant Rosenberg Colonoscopy HI-4 (husband) 5119/02 N/A Kim Endoscopy HI-4 (husband) 6/1/02 N/A Non-Defendant Sweaty Palm Surgery HI-4 (husband) 7119/02 Non-Defendant Non-Defendant Colonoscopy HI-4 (husband) 8117/02 Non-Defendant Non-Defendant Circumcision ffl-4 (husband) 9/8/02 Unity Non-Defendant Sweaty Palm Surgery HI-4 (husband) 10/25/02 Unity White Septoplasty II - 1 - - - - - Date of Patient Code Procedure HI-9 (husband) 8/2/02 HI-9 (husband) 8/3/02 HI-9 (husband) 1 1/30/02 HI-9 (husband) 1/5/03 -HI-10 (wife) 1/4/03 HI-10 (wife) 1/5/03 HI- 10 (wife) 1/11/03 HI-11 (wife) 6/1/02 HI-11 (wife) 6/2/02 r HI- 1 (wife) 1 8/3/02 HI-11 (wife) 8/5/02 HI-12 (husband) 6/2/02 HI-12 (husband) 8/2/02 HI-13 (husband) 5118/02 HI-13 (husband) 5/19/02 HI-14 (wife) 5/25/02 HI-14 (wife) 5/26/02 HI-14 (wife) 7120102 HI-19 (husband) 5/4/02 HI-19 (husband) 5/5/02 HI-19 (husband) 1 0/25/02 HI-19 (husband) 12/20/02 HI-38 (wife) 5/4/02 5/27/02 ffl-38 (wife) HI-38 (wife) 10/25/02 HI-29 (husband) 1114/03 HI-39 (wife) 1/11/03 HI-32 (wife) 4/12/03 HI-32 (wife) 4/13/03 HI-33 (husband) 4/1 2/03 IHI-33 (husbar1d)I 4/ 13103 - Clinic Surgeon Non-Defendant Rosenberg Non-Defendant Rosenberg McKenna Unity N/A Unity Rosenberg N/A Rosenberg Unity McKenna N/A Anaheim West Rosenberg -y Anaheim Colonoscopy - West Rosenberg N/A N/A N/A Laparoscopy N/A Chan Endoscopy Anaheim West Rosenberg Colonoscopy Non-Defendant Rosenberg Endoscopy N/A Colonoscopy N/A Rosenberg Endoscopy Kim N/A Non-Defendant Colonoscopy N/A , Non-Defendant 1~ h a n [Laparoscopy St. Francis [Rosenberg , ~~ndosco~~ Colonoscopy Rosenberg St. Francis Non-Defendant Sweaty Palm Surgery N/A Sweaty Palm S u r g g McKema Unity Upper GI Endoscopy Rosenberg N/A Sweaty Palm Surgery N/A N/A Sweaty Palm Surgery NIA Unity Endoscopy Rosenberg Unity Sweaty Palm Surgery McKema N/A Endoscopy Rosenberg Unity Colonoscopy Rosenberg Unity Endoscopy Unity Rosenberg Iunity Rosenberg colonoscopY I Fraudulently Billed Procedure Endoscopy Colonoscopy Sweaty Palm Surgery N/A Endoscopy Colonoscopy Sweaty Palm Surgery 1 156. The billing of procedures on these husband and wife teams further reveals the fraud. For example, the possibility that a husband and wife would both require sweaty palms surgery is virtually nil, yet Defendants purported to have performed that rare procedure on the couples designated as patients HI-7 and HI-8, HI-9 and HI-10, and HI-19 and HI-38. 157. Other Onyx employees were shuttled from Arizona to the Defendant clinics for the same or similar combinations of procedures. A chart of the fraudulent procedures that Defendants supposedly performed on these additional Onyx employees is attached as Appendix K. 158. Sweaty palm surgery can produce a variety of complications, including bleeding in the chest cavity, pneumothorax (air in the chest cavity that impedes breathing), infection, intercostal neuralgia (rib pain), and, most frequently, increased sweating in other parts of the body. Several of the sweaty palm surgeries that Defendants fraudulently performed on Onyx employees injured the patients. For example, patients HI-4 and HI-5 both suffered severe pain and breathing difficulties following their sweaty palm surgeries. Defendants further endangered both patients by discharging them while their breathing problems persisted. Patient HI-5 suffers other ongoing injuries, including a need to wear gloves because his hands are now too sensitive to be exposed. 159. Two patients who admit being paid to undergo nasal surgery (HI-2 and HI-3) have breathing problems caused by the surgery. Neither had any breathing problem before the surgery. 160. Patient HI-1 was paid to undergo a laparoscopy -- a procedure in whicl a scope is inserted through an incision in the patient's abdomen. Patient HI-1 had no symptoms prior to the procedure, but now suffers pelvic pain as a result of the laparoscopy. 1 61. Highmark paid over $1.5 million on bills in connection with the Onyx cluster. 2. Other Highmark Patients 162. Individual Highmark patient histories confirm the fraud that is expose< in employee clusters such as the Onyx cluster. For example, patient HI-40 was fraudulently billed as having had 8 separate procedures in two short bursts at Defendants Harbor, Premium and St. Paul in 2003. Harbor fraudulently billed the first 3 of those procedures, claiming that HI-40 underwent an endoscopy, a colonoscopy and a hemorrhoid procedure in a mere 5 days (January 1 1-15) at that clinic. Defendant Govindarajan was the surgeon on at least 1 of those procedures. The venue then shifted to Defendant Premium, where Defendant Hampton fraudulently claimed that he performed a sweaty palms surgery on HI-40 about two weeks later, on January 28,2003. 61 163. After a hiatus of several months, Defendants Premium and Chun fraudulently billed Highmark for a gynecological procedure on HI-40 on August 29. 2003. A week after that, on September 6,2003, Defendants St. Paul and Rosenberg claimed to have performed a second endoscopy on HI-40, followed by a second colonoscopy the next day, September 7. Finally, Defendant Rosenberg fraudulently claimed to have performed a second hemorrhoid procedure on HI-40 on September 24,2003. 164. Highmark was defrauded into paying more than $72,000 for HI-40's procedures. B. Plaintiff Tennessee BIue Cross Maynetek Patient CIuster) 165. Tennessee Blue Cross was defrauded into paying about $400,000 for approximately 100 procedures that Defendants and their co-conspirators claimed to have performed on employees of Magnetek, Inc. and their dependents. 166. The bills submitted for the Magnetek patients reflect the same fraudulent practices that are reflected in the Onyx examples described above. For example: a. Numerous employees and their dependents (at least 30) were recruited from the same workplace. b. Numerous employees underwent the same sequence of diagnostic procedures and unrelated surgeries. 62 1I c. The number and frequency of diagnostic and surgical procedures billed 1I can only be explained by fraud, as demonstrated by the billing histories of two families in the Magnetek cluster. One family of four (designated Family 1 in the following chart) underwent 14 diagnostic and surgical procedures in less than six weeks, while another family (designated Family 2) underwent 15 diagnostic and surgical procedures in less than eight weeks. The surgeries -- including two carpal tunnel surgeries and two tonsillectomies -- were unrelated to the diagnostic procedures that Defendants previously performed on the same patients. MAGNETEK PATIENT FAMILIES Procedure TN-01 (Mother) TN-01 (Mother) 1 09121101 TN-02 (Daughter 19) 09121 /01 Familv 1 Anaheim West NonDefendant 1 Anaheim West Anaheim West K i z Anaheim West Kim Procedure 1Upper GI 1Endoscopy I 1 ~olonosco~~ Upper GI Upper GI TN-03 (Daughter 15) 09121101 TN-01 (Mother) TN-02 (Daughter 19) TN-03 (Daughter 15) TN-04 (Father) TN-04 (Father) TN-01 (Mother) TN-04 (Father) TN-05 (Son) - - I 09123101 Anaheim West 09/23/01 Anaheim West 09123101 Anaheim West Kim 09128101 Anaheim West Kim I Colonoscopy Colonoscopy 1 1 10105101 10/19/01 10/ 19101 1 10/01/01 1 Anaheim West emEndoscopy colonoscopy Colporrhaphy Septoplasty Tongue tie repaii Iupper GI Anaheim West Chun Anaheim West White Anaheim West Kim I 63 rN-04 (Father) FN-0 1 (Mother) "'N-06 (Father) FN-07 (Mother) FN-06 (Father) FN-08 (Son 17) I??-09 (Daughter 12) I'N-06 (Father) I'N-07 (Mother) I'N-06 (Father) TN-07 (Mother) TN-06 (Father) FN-06 (Father) IN-08 (Son 17) FN-09 (Daughter 12) I'N-06 (Father) 10/26/01 10/30/01 Anaheim West White Anaheim West Chun Family 2 N/A Rosenberg Rosenberg Newport Superior R o n - ~fendant None Defendant Non-Defendant NonDefendant Non-Defendant N/A Tonsillectomy Hysterectomy Upper GI ~ndosco~~ Upper GI Endoscopy Upper GI ~ndosco~~ Upper GI Endoscopy Upper GI ~ n d o s c o ~--.~ Colonoscopy Colonoscopy Carpal tunnel surgery Sinus Exploration Carpal funnel surgery Tonsillectomy Tonsillectomy Tongue tie repair Anal fistula removal Anal fistula removal - on-~efendant Rosenberg Newport Superior Newport Superior N/A Rosenberg NonDefendant NonDefendant NonDefendant Newport Sunerior Anaheim West Anaheim West White Anaheim West Kirn Anaheim West Kim Anaheim West Kim I'N-08 (Son 17) IT 167. These claims for procedures allegedly performed on Family 1 and Family 2 are particularly revealing. Among other things: a. All four members of each family were first subjected to explorations o their GI systems. The daughters in Family 1, aged 15 and 19, each had 64 colonoscopies and endoscopies, as did their parents. The son and daughter in Family 2, aged 17 and 12, each had endoscopies, and their parents had both endoscopies and colonoscopies. The mother in Family 1 supposedly underwent three such procedures in a span of five days: on September 19, September 21, and September 23,2001. b. After supposedly performing 17 GI diagnostic procedures on the members of these two families, Defendants supposedly performed at least 11 surgeries that were completely unrelated to any of the diagnostic procedures. Thus: -- Defendant Kim at Anaheim West submitted claims for "tongue tie" operations on the first family's 13 year-old son and on the second family's 12 yearold daughter. -- Defendant White at Anaheim West submitted claims for tonsillectomies on both fathers, as well as on the second family's 17 year-old son. --- The colonoscopies and endoscopies performed on the two families were followed by carpal tunnel (wrist) surgery, nasal surgery, a hysterectomy, and "anal fistula removals." c. Defendants performed these diagnostic and unrelated surgical procedures on the same patients in rapid-fire succession, bringing some patients back every other day. Defendants performed 14 exploratory and surgical procedures on Family 1 during the period September 19 to October 30, 2001 and 1I performed 15 exploratory and surgical procedures on Family 2 during the period October 5 to December 2,2001. On five occasions, Defendants Kim and White billed for allegedly performing procedures on three members of each family on the same day. 168. The multitude of surgeries that Defendants performed on other person from the same workforce further reveals the fraud. Illustrative examples of the fraudulent benefit claims that Defendants generated for other Magnetek employees including several sweaty palms surgeries by Defendant Eugene, are set forth in a chart annexed as Appendix L. 1I C. Plaintiff Michipan Blue Cross (Textron Patient Cluster) 169. Defendants submitted fraudulent bills in connection with a cluster of employees of Textron Fastening Systems and their dependents that is even larger than the Onyx and Magnetek clusters. The Textron group actually included 2 separate clusters, one from a facility in Costa Mesa, California, and the other from facility in the Phoenix, Arizona area. The Textron employees received health benefits from Michigan Blue Cross, which paid more than $800,000 as a result of fraudulent claims that Defendants and their co-conspirators submitted for I procedures allegedly performed on this group. I 170. Between the two Textron groups, Defendants and their co--conspirat01 submitted more than 130 fraudulent claims for diagnostic and surgical procedures 66 that they claimed to have performed on some 45 Textron employees and dependents at Millennium, Anaheim West, Unity and related facilities. Those patients included 7 husband and wife pairs and a mother-daughter pair. All of those patients were billed as having had endoscopies and colonoscopies. Some were also the subjects of fraudulent claims for sweaty palms surgeries, laparoscopies, septoplasties, and foot and eye procedures. 171. About three dozen of those patients were employed at a facility in Costa Mesa operated by Intesys, a Textron affiliate. Examples of case histories from that group are as follows: 172. One patient, MI-38, was billed as having 8 separate procedures between October 2001 and December 2002. The first two of those procedures were at Millennium, and were billed as an endoscopy and a colonoscopy by Defendant Halac on October 28 and November 9,2001. MI-38 did not need either of those procedures, and did not have the serious abdominal pain and rectal hemorrhaging that Millennium and Dr. Halac claimed she had. Rather, MI-38 needed money and was told by Maria Rosales, a patient recruiter who is a criminal defendant named in both the State Felony Complaint and the Federal Indictment, that she would be paid if she had an endoscopy and a colonsocopy. MI-38 had the endoscopy and the colonoscopy, and Rosales paid her $300 after the procedures. 173. MI-38 then decided that she wanted a tummy tuck. Rosales told MI-3S that, because she had already had some procedures at Millennium, she could have the tummy tuck at a discount. MI-38 did not have the money for even a discounted tummy tuck, so she decided to have another fraudulent procedure to help her pay fa it. On November 26,200 1, MI-38 supposedly underwent a laparoscopy and a urogenital procedure for leaking urine by Defendant Chun at Millennium. MI-38 did not have a leaking urine problem and only submitted to the procedures because Rosales paid her another $300. Later, MI-38 had the tummy tuck at Millennium. 174. MI-38 also wanted to have laser vision correction surgery. In May 2002, she received the vision correction surgery at a discount at a non-Defendant clinic, paying only $500. Michigan Blue Cross was billed for corneal transplants on MI-38 in May and July 2002, but she did not actually have corneal transplants, only the non-covered laser vision correction procedure. 175. MI-38 then started having procedures at Unity through Olga Toscano, another patient recruiter who is named in both the State and Federal criminal cases. On September 20,2002, MI-38 supposedly had a septoplasty by Defendant White i Unity, but she did not have the serious sinus problems that White and Unity claime she had. She only underwent the nasal surgery because Toscano promised to pay her another $300. Toscano also paid MI-38 another $300 to undergo a second round of endoscopies and colonoscopies, which were performed by Defendant 68 Rosenberg on December 13 and 14,2002. Again, MI-38 did not have the serious abdominal pain and hemorrhoids that Unity and Rosenberg claimed she had; she only had the procedures because Toscano promised to pay her. 176. To obtain still more payments, MI-38 arranged through Toscano for he husband, MI-26, to have an unnecessary endoscopy and a colonoscopy at Unity. MI-26 only had one of those procedures, a colonoscopy by Defendant Rosenberg at Unity on August 24,2002. Nonetheless, Unity, through its Healthstar and Universe billing aliases, fraudulently billed for both procedures. Michigan Blue Cross was defrauded into paying about $45,000 for the procedures on MI-38 and her husband. 177. Another Textronhntesys employee, MI-14, and her husband, MI-15, had 10 fraudulently-billed procedures at Millennium, St. Francis and Unity. MI-14 was told by a friend at work, MI-44, that she could get free cosmetic surgery at Millennium, and MI-44 referred MI-14 to Olga Toscano. MI-14 told Toscano that she wanted cosmetic surgery to remove the fat around her eyelids, but Toscano saic that if MI-14 wanted the surgery for free, she would first have to have an endoscop and a colonoscopy. MI-14 had the fraudulent endoscopy and colonoscopy at Millennium on March 3 and March 10,2001, by Defendant Jigjinni. MI-14's husband, MI-15, also had an unnecessary endoscopy and colonoscopy at Millennium, by Defendant Halac, so that MI- 14 could have her free cosmetic eye surgery. MI-14 eventually had her free cosmetic eye surgery, which was performed at Defendant St. Francis on May 16,2002, and was fraudulently billed as a medically necessary eye procedure. 178. Also in May 2002, MI-14 had an elective procedure to tighten her vagina to increase sexual gratification. Defendant Chun performed that procedure at Millennium on May 6,2002, billing and documenting it as a urogenital procedun for urinary incontinence. MI-14 did not have an incontinence problem, and only wanted a vaginal tightening to enhance the sexual experience. 179. On consecutive weekends in December 2002, MI-14 and her husband MI-15 each had a second round of unnecessary endoscopies and colonoscopies, this time at Unity by Defendants Rosenberg and Kim, so that MI-14 could have another free or discounted elective procedure. Again, neither MI-14 nor her husband had any of the intestinal problems that Unity and the surgeons claimed they had. MI-14 never had the second elective surgery. 180. Michigan Blue Cross was defrauded into paying more than $50,000 fo the fraudulent procedures on MI-14 and MI-15. 181. Other TextronlIntesys employees also had fraudulent procedures in order to receive free cosmetic surgery, and also had cosmetic procedures that were disguised as functional procedures. For example, MI-40, MI-41 and MI-42 had unnecessary endoscopies and colonoscopies by Defendants Alamy and Halac at Millennium so they could get free breast implants for themselves or a family 70 member. MI-40 and MI-21 each had a cosmetic eye surgery by a non-Defendant surgeon (MI-40 on April 11,2002 at Anaheim West and MI-21 on September 5, 2002 at Millennium) that the surgeon and the clinics fraudulently billed and documented as a medically necessary eye procedure. Like MI-14, MI-21 and MI-4' had vaginal tightenings for sexual gratification that were fraudulently billed by Defendant Chun and Millennium as urogenital procedures. 182. One Textronflntesys patient, MI-34, who was billed as having had multiple procedures at Millennium and Anaheim West, had 3 cosmetic procedures a tummy tuck, liposuction and a cosmetic eye surgery. Two others, MI-31 and MI44, who were billed as having had 7 and 8 procedures respectively at Millennium, Anaheim West and Unity, also had multiple cosmetic procedures. 183. Defendant Toh was the anesthesiologist on many of the fraudulent Millennium procedures in the TextronIIntesys cluster, including procedures on patients MI-14 (March 10,200 I), MI-19 (July 6,2002), MI-21 (March 23 and September 5,2002), MI-38 ((November 26,200 I), and MI-40 (June 18,2002). 184. A chart of the Textrodntesys Costa Mesa patients is annexed as Appendix M. 185. While the Textron/Intesys patients were repeatedly being run through Defendants' fraud mill, another group of Textron patients was being recruited for fraudulent procedures from a Textron facility in Phoenix, Arizona. A summary of the claims that Defendants and their co-conspirators submitted for the Arizona group of Textron employees appears in the following table: ARIZONA TEXTRON EMPLOYEES Date of Fraudulently Billed Patient Code Clinic Surgeon Procedure Procedure MI-1 9/8/2001 N/A N/A Sweaty Palm Surgery MI-1 11/21/2001 NonN/A Laparoscopy Defendant , MI-2 (wife) 16/22/2002 l ~ e w ~ o r t Ichan I I MI-2 (wife) MI-2 (wife) MI-46 (husband) MI-3 11 0/20/2002 Iunity 11 012612002 l ~ n i t y 6/22/2002 Newport Superior 3/23/2002 Anaheim 1 Iwest l ~ o s e n b e r ~~ ~ o l o n o s c o ~ y ~ o s e n b e r ~Removal of Hemorrhoids N/A Sweaty Palm Surgery 1 1 NonDefendant 1 Upper GI Endoscopy - - MI-3 I MI-4 MI-4 3/24/2002 Anaheim west 14/6/2002 Anaheim West 5/25/2002 Anaheim I N/A Colonoscopy 1White Kim NonDefendant Kim INon!~im l~on(Defendant 1septop1asty Upper GI Endoscopy Colonoscopy Upper GI Endoscopy 5/26/2002 Anaheim West MI-5 (Husband) 5/25/2002 Anaheim West MI-5 (Husband) 15/26/2002 [Anaheim M - 6 (Wife) MI-6 (Wife) 15/25/2002 !N/A 15/26/2002 N / A 1~ o l o n o s c o ~ ~ !upperGI Endoscopy ~olonosco~~ 1 1 1 1 ARIZONA TEXTROP Date of Patient Code Clinic Procedure 511812002 Anaheim West MI-7 511812002 Anaheim West -MI-7 511912002 Anaheim West I I I EMPLOYEES Fraudulently Billed Surgeon Procedure Rosenberg Upper GI Endoscopy Rosenberg Rosenberg Rosenberg Rosenberg IColonoscopy IColonoscopy Upper GI Endoscopy Colonoscopy Removal of Hemorrhoids West 512012002 Anaheim West I Rosenberg West 186. Many of those Arizona Textron patients had their fraudulent procedures on weekends. During one weekend in May 2002 (May 18 and 19, 2002), Defendants Anaheim West and Rosenberg claimed to have performed endoscopies and colonoscopies on two of those employees (MI-7 and MI-8). One of the two (MT-7) was billed as having had an endoscopy and a colonoscopy on Saturday and then another colonoscopy on Sunday. 187. The next weekend (May 25 and 26,2002), Defendants transported two Textron employees and a spouse (MI-4, MI-5 and MI-6) to undergo six endoscopies and colonoscopies at Anaheim West. Defendant Kim fraudulently billed for performing three endoscopies and a colonoscopy on those patients on 73 Saturday, May 25, and a non-Defendant surgeon claimed to have performed three colonoscopies on those patients on Sunday, May 26. 188. Less than a month later, on another weekend (June 22,2002), Defendants transported a husband and wife (MI-2 and MI-46), to undergo a gynecological procedure and sweaty palms surgery at Newport Superior. D. Plaintiff Empire (Pepsi and Fuiicare Clusters) 189. Defendants submitted fraudulent bills to Empire for unnecessary procedures on a cluster of patients who were recruited at a Pepsi facility in Texas. 190. Empire was defrauded into paying more than $200,000 for 18 procedures that Defendants allegedly performed on 7 Pepsi employees, including tell-tale combinations of endoscopies, colonoscopies, and sweaty palm surgeries. Most of the procedures were performed at St. Paul. A chart of the Pepsi cluster is attached as Appendix N. 191. Six of the seven Pepsi patients were fraudulently billed as having had sweaty palms surgery at St. Paul between July 2003 and November 2003. Dr. McKenna billed a sweaty palms surgery on two Pepsi employees, EM-2 and EM-3 on the same day (Saturday, October 4,2003). The likelihood that six people from the same Texas employer had an actual need to travel to California within several months of each other to have "sweaty palms" surgery is virtually zero. 192. Several of the Pepsi patients were unnecessarily subjected to a trio of procedures in rapid succession: an endoscopy, followed by a colonoscopy, followed by sweaty palms surgery. One patient, EM-4, had three procedures in five days at St. Paul: an endoscopy on October 27,2003 by Defendant Rosenberg, a colonoscopy on October 28, and sweaty palms surgery on November 1 by Defendant McKenna. Another patient, EM-2, had five procedures in eight days at St. Paul: an endoscopy on September 29,2003 by Defendant Rosenberg, a colonoscopy the next day by Defendant Rosenberg, another GI procedure on October 2 on which Defendant Madrid was the anesthesiologist, and sweaty palms surgeries on October 4 by Defendant McKenna and on October 6. EM-2 then traveled back to Southern California in December 2003 for another endoscopy by Defendant Rosenberg. 193. Empire also paid over $272,000 as a result of fraudulent health benefit claims that Defendants submitted for procedures allegedly performed on three employees of Fujicare, including two persons employed at an Arizona facility. A chart summarizing these claims is annexed as Appendix 0. Patient EM-9 from Mesa, Arizona and EM-10 from Phoenix, Arizona, account for $192,000 of the payments, and present the type of billing pattern that could only result from Defendants' scheme. Defendants billed for performing endoscopies on both Arizona employees on December 7,2002, and then 75 Defendants billed for performing sweaty palms surgery on both Arizona employees on December 19,2002. 195. Both of the sweaty palms surgeries were ostensibly performed by Defendant McKenna, and were billed in the name of Universal Medical Surgical Group and St. John Surgical Group, Inc., which are identified in the State Felony Complaint as among the billing aliases used by Unity. E. Plaintiff Excellus (includinp Linvatec and Welch Allvn Clusters) 196. Defendants recruited at least four employees from a Linvatec facility in Florida who had health benefits through Plaintiff Excellus. Those employees traveled from Florida to Southern California and were billed as having had 8 procedures at the Unity clinic in less than a month. 197. The first Linvatec employee to make the trip from Florida to California, patient EX-1, began by having an upper GI endoscopy on November 2, 2002, followed the next day by a colonoscopy. EX-1 returned a few weeks later, this time accompanied by 3 other Linvatec employees. EX-1 then had a sweaty palms surgery (November 29,2002), as did two of his co-workers, EX-2 and EX3, both billed by Defendant McKerma on November 30. EX-2 and EX-3 also had I upper GI endoscopies, at least one by Defendant Rosenberg. The fourth Linvatec patient, EX-4, supposedly had a septoplasty by Defendant White. 198. A chart of the Florida Linvatec procedures, for which Excellus paid about $23,000, is attached as Appendix P. 199. Another cluster of Excellus-insured patients were employees, or dependents of employees, of a medical device manufacturer, Welch Allyn, in the San Diego area. Eleven Welch Allyn employees or dependents, including two husband and wife pairs, had a total of 23 fraudulently-billed procedures, 20 of them at Defendant Pacific in the first half of 2002, and the other 3 at Defendant Harbor in March 2003. 200. The first two patients in the Welch Allyn cluster, EX-5 and EX-6, had 5 fraudulently billed procedures between them at Pacific in January 2002. Each of them was fraudulently billed as having had an endoscopy on January 13 and a colonoscopy on January 20. The endoscopy and colonoscopy on EX-6 both were performed by Defendant Rayyes. 201. At about the same time, two couples, EX-8 and EX-9, and EX-10 and EX-11, had matching pairs of endoscopies and colonoscopies at Pacific. EX-11 was the subject of fraudulent bills for an endoscopy and a colonoscopy on January 8 and 13,2002 respectively, both by Defendant Rayyes, and her husband, EX-10, was billed as having had his procedures on February 16 and 23, both by Defendant L,luncor. EX-8 and EX-9 both had endoscopies on February 10 and colonoscopies on February 24, with all 4 procedures fraudulently documented and billed by 77 Defendant Rayyes. 202. In April and May 2002, three more Welch Allyn patients, EX-7, EX12 and EX-14, had 6 more upper and lower GI procedures, 5 by Defendant Lluncor and 1 by Defendant Rayyes. In July 2002, EX- 13 was the subject of a fraudulent sweaty palms surgery at Pacific, and patient EX-12 returned in August for a sweaty palms surgery as well, her third procedure overall. 203. One Welch Allyn patient, EX-15, did not go to Pacific. Instead, her patient recruiter directed her to Defendant Harbor. Harbor fraudulently billed for 3 procedures on EX-15 within 5 days, an endoscopy on March 15, a colonoscopy on March 16, and a D & C on March 19. Defendant Govindarajan fraudulently performed, billed and documented the endoscopy and the colonoscopy. 204. Excellus was defrauded into paying more than $125,000 in connection with the Welch Allyn cluster. A chart of the cluster is attached as Appendix Q. 205. An Excellus patient who was not part of a workplace cluster, EX-16 from Texas, was used to produce 4 fraudulent insurance claims, two for procedures by Defendant Alamy at Defendant Pacific (an upper GI endoscopy on May 29,2001 and a colonoscopy on May 30,2001), and two at Anaheim West (a laparoscopy by Defendant Chan on January 5,2002 and a supposed carpal tunnel I repair on January 9,2002). EX-16 traveled from her home in Missouri City, Texas 78 It to Southern California for those supposed procedures. Subsequent medical records for EX-16 expose Defendants' fraud in her case. 206. Three months after Defendants ostensibly performed a "laparoscopy" and "carpal tunnel repair" on EX-16 at Anaheim West, she was treated near her home in Texas for keloid scars "secondary to plastic surgery." EX-1 6 filled out a New Patient Health History for her Texas dermatologist on April 17,2002. Responding to a request to list "prior surgeries," she identified "cosmetic surgery" -- never mentioning the laparoscopy or the carpal tunnel surgery that she supposedly underwent in California several months earlier. Moreover, the medical history taken by her Texas dermatologist recorded that she had "plastic surgery in California Jan. 2002 for 'face lift " and that the scars for which she sought treatment in Texas were "secondary to plastic surgery." 207. Before EX-16 had her supposed carpal tunnel surgery at Anaheim West, she filled out a Patient Registration Form indicating that she was referred by "Johnny Huynh." Johnny Huynh is the brother of Thuy Huynh, the capper discussed in detail above, and Johnny Huynh is one of the cappers identified in the State Felony Complaint. As set forth on page 14 of the State Felony Complaint, Vu and his co-defendants illegally: delivered rebates, refunds, commissions, and other consideration in the form of money and otherwise as compensation and inducement to Ngoc Huynh, a capper known to them as "Johnny", for the referral and procurement of patients. 79 7 208. Excellus was defrauded into paying $40,314 in connection with the procedures on EX-16. F. Plaintiff Alabama Blue Cross (including Teledyne and Mount Vernon Mills Clusters) 209. Defendants recruited 11 patients from a Texas facility that is operated by Teledyne with health benefits provided by Alabama Blue Cross. 210. Alabama Blue Cross paid over $268,000 for 27 procedures that Defendants allegedly performed on the 11 Teledyne employees at Newport Superior in 1999 and 2000, at Millennium in 2001, at Pacific in 2001, and at a clinic called Valley Multi-Specialty in 2003. (Valley Multi-Specialty is a clinic that Unity rented to conduct procedures that could not be performed at the Unity clinic.) 211. Two of the Teledyne patients, AL-2 and AL-7, testified about their experiences with Defendants' fraud in depositions they gave in a case entitled, Thuy Duong Nguyen et al. v. Johnny Huynh et al., Texas District Court, Harris County, Cause No. 2003-35573). Those 2 patients, whose procedures accounted for over $90,000 of the damages sustained in connection with the Teledyne cluster, testified that they went to California solely to obtain cosmetic surgery, and that they were recruited for those trips by Thuy Huynh, the patient recruiter discussed above. The bills that Defendants submitted, however, were for endoscopies, colonoscopies and other supposed medical procedures. 80 212. AL-7 first traveled from Texas to Southern California in February 2000. As a result of that visit, Alabama Blue Cross was billed for two endoscopies, on February 9 and 13,2000 at Newport Superior. 2 13. AL-7 traveled back to Southern California in June 2003, producing bills for a trio of procedures -- an endoscopy, a colonoscopy, and a gynecological procedure by non-Defendant surgeons at Valley Multi-Specialty between June 20 and 27,2003. 214. In the Texas case, AL-7 testified that her sole reason for going on both those trips was to have cosmetic surgery and that she was recruited by Thuy Huynh. AL-7 testified as follows: Q: . . In 2000 when you went to California, what procedure was performed, if any? . . . A: Yes, redone -- redid the breasts. Q: . . . Redid the breasts. What do you mean when you say that the breasts were redone? A: Yes. Just like what I said earlier, one side was higher than the other, one side is lower; so now I want to have that done to make it even. 215. AL-7 denied that she had any other procedures done when she was at Valley Multi-Specialty in June 2003: Q: [Dlid you have anything else done in California in 2003? . . . A: No, no. Q: . . . Did you have any other medical procedures done? . . . A: No. 216. With respect to the recruiter, Thuy Huynh, AL-7 testified: Q: What is your understanding of Thuy Huynh's role in your going back to Southern California in June 2003? A: The role, I think it's to do the same thing: She send the people for cosmetic surgery. 217. The other patient, AL-2, traveled with AL-7 on the trips to Newport Superior in February 2000 and to Valley Multi-Specialty in June 2003. Alabama Blue Cross was billed for an endoscopy/colonoscopy combination on AL-2 at Newport Superior on February 16 and 20,2000, respectively, and an endoscopy, a colonoscopy, and a gynecological procedure at Valley Multi-Specialty between June 10 through 14,2003 by the same surgeons who performed the same procedures on AL-7. Like AL-7, AL-2 testified that she made those trips solely to have cosmetic surgery and was recruited by Thuy Huynh. 218. Alabama Blue Cross was also defrauded in connection with bills submitted by Defendant Pacific and several surgeons for procedures on three 1 members of one family. Pacific and the surgeons claimed to have performed 10 procedures on the family between March and July of 2002. 219. Pacific and Defendant L,luncor fraudulently billed Alabama Blue Cross for a total of 5 endoscopies and colonoscopies that they claimed to have 82 performed on the father and mother (AL-12 and 13) in March 2002. On May 2 and May 5,2002, Pacific and Defendant Rayyes fraudulently claimed to have performed an endoscopy and a colonoscopy on the family's 9 year-old daughter 1 (AL-14). Defendant White also participated in the fraud involving this family, claiming to have performed a medically necessary septoplasty on the mother on May 14. The fraud in connection with this family concluded with a fraudulent bill for a hemorrhoid procedure on the father on June 3, and a fraudulent bill for a laparoscopy on the mother on July 5. 220. Alabama Blue Cross was deceived into paying more than $130,000 on those fraudulent bills. 221. Alabama Blue Cross was also victimized through a cluster of at least 7 patients from Georgia who received benefits through Mount Vernon Mills. Those patients had fraudulent procedures at Harbor, Pacific, St. Paul, Millennium and Premium. One of the Mount Vernon Mills patients, AL-15, was billed as having had a sweaty palms surgery by Defendant Harnpton at Premium on May 17,2003. 222. Alabama Blue Cross also received fraudulent bills in connection with a husband and wife who each had three procedures at Millennium. Each of them, AL-16 and AL-17, had a pair of GI procedures at Millennium (the wife on April 23 and May 1,200 1, and the husband on May 19 and June 2,200 1). At least three 83 of those four procedures were fraudulently billed by Defendant Halac. The wife's third procedure was a supposedly necessary eye procedure on August 3,2002. The husband's third procedure at Millennium was a fraudulent urinary procedure by Defendant Pate1 on March 8,2003. 223. Alabama Blue Cross was defrauded into paying more than $54,000 on the procedures for that couple. G. Plaintiff Massachusetts Blue Cross 224. Massachusetts Blue Cross was victimized through a cluster of patients employed by an employer with facilities in Minnesota, Washington, and California. 225. The cluster from Minnesota includes a core group of 4 women who had 14 procedures at Defendant clinics. The Massachusetts Plan was defrauded into paying more than $182,000 for those 4 patients alone. An additional 9 patients from the same facility also flew from Minnesota to California and had sweaty palms and other procedures at non-Defendant clinics. Those 9 additional patients resulted in another $190,000 in fraudulently procured payments. 226. The four women -- patients MA-1, MA-2, MA-3 and MA-4 --had their 14 procedures at Newport Superior, Anaheim West, Millennium and Pacific. A chart of those procedures is annexed as Appendix R. 227. MA-3 was recruited to Defendant clinics by patient recruiter Sue Nanda, who is one of the recruiters charged in the State Felony Complaint. MA-3 flew from Minnesota to California three separate times and had 6 separate procedures. The fust time was over New Years weekend in 2001, when she had an endoscopy and a colonoscopy by Defendant Babaknia at Millennium. Fourteen months later, she came back and had three procedures in three days (March 20,21 and 22 of 2002) at Anaheim West, an endoscopy by Defendant Kim, a supposed urogenital surgery by Defendant Chan, and a hemorrhoidectomy by a nonDefendant surgeon. MA-3 came back a third time a few months later, and on June 1,2002, she had a supposed septoplasty by Defendant White. The Massachusetts Plan paid more than $83,000 on fraudulent bills for MA-3's procedures. 228. Between MA-3's first and second trips to California, her co-worker MA-4 made her own trip, also facilitated by the indicted patient recruiter Sue Nanda. MA-4 stayed at Nanda7shome during a long weekend in which she had three procedures. On Friday, December 14,200 1 , MA-4 had an endoscopy by Defendant Alamy at Anaheim West, followed by a colonoscopy the next day, also by Alamy at Anaheim West. MA-4 took Sunday off, but on Monday, December 17, she had her third procedure in four days. In a clear indication of the close relationships between the Defendant clinics, however, MA-4 did not have her third procedure at Anaheim West where she had her first two procedures only days 85 before. Rather, she had her third procedure at Defendant Pacific, a supposed hemorrhoid procedure. Massachusetts Blue Cross was defrauded into paying more than $39,000 for those 3 procedures. 229. During the same period that the 4 employees from Minnesota were having their procedures at various Defendant clinics, a group of 5 employees from a sister facility in Washington also were flying to Southern California to have procedures at Millennium. Those 5 employees -- MA-5, MA-6, MA-7, MA-8 and MA-9 --had a total of 12 procedures at Millennium between August 200 1 and August 2002. A chart of those procedures is annexed as Appendix S. Massachusetts Blue Cross was defrauded into paying about $205,000 on that Washington group. 230. Predictably, the patients' Millennium procedures included endoscopies, colonoscopies and sweaty palms surgeries, as well as laparoscopies. Several of those procedures were performed by Defendants Chun and Halac. Two of the patients -- MA-5 and MA-6 -- had three procedures apiece over two separate trips to California. 231. Massachusetts Blue Cross was also defrauded into paying large sums on in-State patients from the same employer who had procedures at Defendant clinics. 232. Some patients had fraudulent procedures at both Defendant and nonDefendant clinics. For example, MA-12, after having had a fraudulently-billed endoscopy, colonoscopy, and sweaty palms surgery at a non-Defendant clinic, was fraudulently billed as having had a laparoscopy by Defendant Chun at Premium (August 23,2003). MA-13 had a fraudulent endoscopy and another procedure at a non-Defendant clinic, and also had a fraudulently billed laparoscopy by Defendant Chan at Millennium (February 18,2003). 233. Several of the California patients stand out for the extreme abuse and damage involved in their cases. One of them, MA-10, had 5 fraudulent procedures in three months, a laparoscopy at Millennium by Defendant Chan (1/17/03), a hemorrhoidectomy by Defendant Rosenberg at ValleyIUnity (3/22/03), and an endoscopy, a colonoscopy, and a hernia repair at non-Defendant clinics. Massachusetts Blue Cross was deceived into paying more than $42,000 for those fraudulent procedures. 234. Patient MA-11 had 4 procedures performed at Defendant Pacific in 2002, including two sweaty palms surgeries, and an endoscopy and colonoscopy three days apart (February 6 and 9,2002) by Defendant Lluncor. Pacific and Lluncor defrauded Massachusetts Blue Cross into paying more than $58,000 for MA-14's procedures. H. Plaintiff Premera Blue Cross 235. Premera Blue Cross patients who were drawn into the fraud included patients from Arizona, Alaska and Washington. From each of those States, there was at least one husband and wife pair who had matching surgeries. 236. The Arizona couple had the identical three procedures on the same days at Unity. On March 22,2003, both PR-1 and her husband PR-2 had endoscopies. The next day, both had colonoscopies. Six days later, on March 29, PR-1 and PR-2 both had sweaty palms surgeries at Unity by Defendant Hampton, with Defendant Madrid as the anesthesiologist on both procedures. As described earlier and illustrated in numerous patient examples from various of the Plaintiffs, that unlikely trio of procedures -- endoscopy, then colonoscopy, then sweaty palms surgery -- is one of the defining and unmistakable patterns of the fraud in this case. It is even more damning when a husband and wife from out of State both have the same sequence of fraudulent procedures on the same days. The fraud involving PR-1 and PR-2 cost Premera $42,464. 237. The Alaska couple - PR-3 and PR-4 -- had the identical procedures on the same consecutive days at St. Paul. On December 17,2003, both PR-3 and PR-4 had endoscopies by Defendant Rosenberg at St. Paul, and the next day both had colonoscopies by Defendant Rosenberg at St. Paul. They then flew back to Alaska. Premera was defrauded into paying $64,157.47. 88 238. PR-5 and PR-6 are from Washington. Both PR-5, the husband, and PR-6, the wife, were billed as having had three fraudulent procedures at St. Paul. PR-5 was the subject of fraudulent bills for an endoscopy by Defendant Rosenberg on July 31,2003 and a sweaty palms surgery on August 2,2003. The sweaty palms surgery was supposedly performed by a non-Defendant surgeon and was billed by Defendant McKerma. PR-5 was paid about $400 for those two procedures. 239. On September 13,2003, PR-5 had a fraudulent bladder procedure at St. Paul by Defendant Patel, for which he was paid an additional $600. PR-5 returned to Washington after the bladder procedure, but soon developed a severe infection as a result of the procedure, went into septic shock, passed out while he was on the phone calling 911, and had to be rushed to a local hospital where he was hospitalized for four days. 240. Though St. Paul and its surgeons also billed for three procedures on the wife, PR-6, the wife in fact never had any procedures. In fact, the wife had not left the State of Washington for about 10 years because of illness. PR-6 never went to St. Paul, but that did not stop the clinic and its surgeons from billing for an endoscopy and a colonoscopy on September 12 and 13 and a bladder procedure by Defendant Pate1 on September 17. Defendant Martha Madrid billed for nonexistent anesthesia services on the bladder procedure. Premera was defrauded 89 into paying $85,334 in connection with PR-5 and PR-6. 241. A chart of the procedures on the Arizona, Alaska and Washington couples is annexed as Appendix T. 242. Another pair of Premera patients, fellow Alaskans with benefits provided by the Association of General Contractors, are notable both for the number of fraudulent procedures they had in a short period of time, and for the huge bills that were submitted in connection with those procedures. 243. One of them, PR-7, had four procedures at St. Paul. Three of those procedures were performed within 5 days in August 2003, an endoscopy and a colonoscopy by Defendant Rosenberg on August 23 and 24, and a sweaty palms surgery by Defendant McKenna on August 28. The fourth procedure, a bladder procedure, was supposedly performed by Defendant Pate1 two months later, on October 22,2003, with Defendant Madrid as the anesthesiologist. 244. The total bills submitted to Premera in connection with PR-7's four St. Paul procedures topped $183,000. Those fraudulent bills included a bill from St. Paul for the sweaty palms surgery for $63,558, and another bill from St. Paul for the supposed bladder procedure for $45,025. Premera paid $37,375.73 on those fraudulent bills. 245. The other Alaska patient from the Contractors' Association, PR-8, had 5 procedures at St. Paul in less than a month, from November 22 to December 90 17,2003. Those procedures included an endoscopy, two colonoscopies, a sweaty palms procedure by Defendant Hampton, and, like his fellow contractor, a supposed bladder procedure by Defendant Patel. The charges for PR-8 were more than $1 78,000, including a $58,640 bill from St. Paul for the sweaty palms surgery, and a $43,207 bill from St. Paul for the supposed bladder procedure. 246. A chart of the procedures on the two Alaska patients is annexed as Appendix U. I. Plaintiff Repence (includinp Leatherman Tools and OHSU Clusters) 247. One of the most damaging husband and wife pairs in the case was a couple from Washington who were covered by the benefit plan of a furniture company, Strasser Woodenworks, administered by Regence Bluecross Blueshield of Oregon. The spouses, RE-1 and RE-2, each had 4 procedures at Unity, three of them the same procedures by the same surgeons on the same days. On October 6, 2002, both had endoscopies by Defendant Rosenberg; on October 7 they both had colonoscopies by a non-Defendant surgeon; and on November 2 they both had supposed hemorrhoidectomies by a non-Defendant surgeon. After a few weeks off, each came back to Southern California and had a fourth unnecessary surgery, first RE-2 (a sweaty palms procedure by Defendant McKenna on December 20) and then RE-1, a septoplasty by Defendant White on January 25,2003. 248. Unity and the surgeons defrauded Regence into paying about $216,000 just for the unnecessary procedures on that one couple. 249. A group of Regence patients from the Leatherrnan Tools company in Portland, Oregon, had procedures at four of the Defendant clinics in 2002 and 2003. One of the patients, RE-3, had 3 procedures at Unity in March and April 2003, an endoscopy, a colonoscopy, and a D&C. Another patient, RE-4, had 3 procedures in 5 days at 2 different Defendant clinics, a D&C at Millennium on February 19,2003, and then an endoscopy and a colonoscopy at Defendant Harbor on February 22 and 24. Because RE-4 was from Oregon and must have been shepherded by a patient recruiter, that recruiter obviously was recruiting both for Millennium and for Harbor. 250. A third Leatherman patient, RE-5, had procedures at Millennium and Premium (a D&C by Defendant Chun on September 16,2002 and a hemorrhoidectomy on November 30,2002), and a fourth Leatherrnan patient, RE6, had a laparoscopy by Defendant Chun at Millennium on January 29,2002. All told, Defendants and others caused at least $101,000 in damages in connection with the Leatherrnan group. 251. Another group of Regence patients who had fraudulent procedures at Unity worked for Oregon Health Sciences University ("OHSLT) in Portland, Oregon. The first OHSU patient to make the trip to Southern California was RE-7. 92 RE-7 first had an endoscopy and a colonoscopy by Defendant Rosenberg on December 22 and 23,2002. RE-7 came back 3 weeks later with a husband and wife from OHSU, RE-8 and RE-9. RE-8 and RE-9 proceeded to have his-and-hers endoscopies and colonoscopies at Unity on January 18 and 19,2003. While the new recruits were having their unnecessary endoscopies on January 18, RE-7 was having a third procedure at Unity, a hemorrhoidectomy. Damages on those three OSHU patients exceeded $67,000. 252. A chart of the Regence patients described above is attached as Appendix V. J. Plaintiff CareFirst (includiny Vertis Cluster) 253. CareFirst's coverage area includes the District of Columbia and portions of Maryland and Virginia. Several CareFirst insureds from those areas traveled to Southern California to have unnecessary procedures at Defendant clinics. 254. For example, a husband and wife from Centreville, Virginia -- CF-1 and CF-2 -- had multiple unnecessary procedures over a few days in late 2003. The wife was billed as having had 4 separate procedures on 4 consecutive days at St. Paul -- three GI procedures (at least 2 by Defendant Rosenberg) and one urogenital procedure, on November 23,24,25 and 26 of 2003. Over the same period, the husband had an endoscopy by Rosenberg and a supposed abdominal procedure, both also at St. Paul. 255. The run of procedures was then suspended for a few days for the long Thanksgiving weekend, but on the following Monday, December 1,2003, the husband had a third procedure, a colonoscopy. However, in another example of the interrelationship and interchangeability of the Defendant clinics, the husband's colonoscopy was performed not at St. Paul, where the couple's 6 prior procedures had been performed, but at Defendant Harbor. 256. CareFirst was defrauded into paying more than $63,000 in connection with the unnecessary procedures on CF-1 and CF-2. 257. Several other Capital-area CareFirst insureds also made the trip to Southern California and became the subject of fraudulent billings to CareFirst. April 2001, CF-3, from Silver Springs, Maryland, had an endoscopy (April 25) and two days later a colonoscopy (April 23), both by Defendant Rayyes at Defendant Newport Superior. 258. A CareFirst insured from Rockville, Maryland, CF-4, traveled to Southern California in August 2003 and within a few days had an endoscopy by Defendant Rosenberg at St. Paul (August 7,2003) and a sweaty palms surgery by Defendant McKenna at St. Paul (August 11,2003). 259. And in October 2003, a CareFirst insured from Woodbridge, Virginia, CF-5, had three procedures in 5 days at St. Paul, starting with an endoscopy and a colonoscopy by Defendant Rosenberg on consecutive days (October 18 and 19, 2003), followed by supposed gynecological procedures on October 23. 260. Some CareFirst insureds did not travel as far, but the billings for their procedures were no less fraudulent. For example, CF-6, a CareFirst insured from Las Vegas, had a fraudulent endoscopy by Defendant Kim and a fraudulent gynecological procedure by Defendant Chan on consecutive days (May 28 and 29, 2002) at Defendant Anaheim West. That was followed by a fraudulent septoplasty a few months later (October 30,2002) at a non-Defendant clinic. The anesthesiologist on both the May 28 and the October 30 procedures was Defendant Martha Madrid. Defendant Madrid was also the anesthesiologist on two procedures performed on a local patient, CF-7, at Defendant St. Francis, an endoscopy on April 11,2002 and a colonoscopy the next day by Defendant Rosenberg. 26 1. CareFirst was also victimized in connection with a cluster of local patients employed by an advertising and marketing company called Vertis. Four Vertis employees -- CF-8, CF-9, CF-10 and CF-11 -- had a total of 9 procedures at Defendant clinics, for which CareFirst was defrauded into paying more than $136,000. 262. Of the 9 procedures on the Vertis patients, six were performed at the Unity spillover clinic, Valley Multi-Specialty (5 endoscopies and colonoscopies by Defendant Rosenberg and a sweaty palms surgery by Defendant McKenna), two at Anaheim West (an endoscopy by Defendant Kirn and a colonoscopy by Defendant Rosenberg), and one at a non-Defendant clinic. 263. A chart of the CareFirst patients described above is attached as Appendix W. K. Plaintiff Nebraska Blue Cross (Swift and Millard Clusters) 264. Patients insured by Nebraska Blue Cross who were drawn into the fraud included individuals who were part of clusters of employees from two companies. One is the meat company, Swift & Company. Among the Swift employees were two from Minnesota, NE-1 and NE-2. NE-1 had three procedures in 5 days at Newport Superior, an endoscopy and a colonoscopy by Defendant Babaknia (January 9 and 12,2001) and a circumcision on January 1 3,2001. NE-2 had at least one procedure at Newport Superior, an endoscopy on May 19,2000. 265. Nebraska Blue Cross was defrauded into paying more than $41,000 for those two Swift patients. 266. Another cluster of Nebraska-insured patients were local patients who had employee health coverage through Millard Refrigerated Services. One of those patients, NE- 3, had at least 7 procedures at Newport Superior and Millennium between July 2000 and September 2002. Those 7 procedures included at least 1 endoscopy (July 6,2002 by Defendant Rosenberg at Millennium), 2 colonoscopies (July 16,2000 by Defendant Babaknia at Newport Superior and August 24,2002 by Defendant Rosenberg at Millennium), a hemorrhoidectomy (August 12,2000 at Newport Superior), a septoplasty (November 4,2000 at Newport Superior) and an apparent urological procedure (September 21,2002 at Millennium). 267. Nebraska Blue Cross was defrauded into paying more than $90,000 on patient NE-3 alone. 268. Two other Millard employees or their spouses also had unnecessary procedures at Newport Superior. Patient NE-4 had an endoscopy and a colonoscopy on April 7 and April 15,200 1, both performed by Defendant Alamy. On the same day that NE-4 had her second procedure by Alamy, April 15, patient NE-5 had her first, an endoscopy by Defendant Alamy, which was followed a few weeks later by a colonoscopy by Defendant Alamy on May 8,200 1. Nebraska Blue Cross was defrauded into paying $31,000 on those two other Millard I I patients- 97 269. A chart of the Nebraska Blue Cross patients described above is attached as Appendix X. L. Plaintiff North Carolina Blue Cross 270. In 2003,4 patients insured by North Carolina Blue Cross traveled from North Carolina to have procedures at Defendant clinics. In March 2003, the first patient, NC-1, had an endoscopy and a colonoscopy by Defendant Rosenberg on consecutive days at Unity (March 15 and 16,2003). Six months later, a second patient from North Carolina, NC-2, had the fraudulent 3-procedure sequence -endoscopy, colonoscopy, and sweaty palms surgery -- between August 29 and September 5,2003 at St. Paul. Defendant Rosenberg performed the endoscopy and the colonoscopy. 271. In November 2003, a third North Carolina patient, NC-3, had a backto-back endoscopy and colonoscopy at St. Paul (November 8 by Defendant Rosenberg and November 9 by a non-Defendant surgeon). Two weeks later, on November 23,2003, she had a third procedure, a supposed gynecological procedure, again at St. Paul. The last North Carolina patient, NC-4, had an endoscopy by Defendant Rosenberg at St. Paul on November 22,2003, followed by a sweaty palms surgery by Dr. Hampton at St. Paul on November 26,2003. 272. A husband and wife from Fontana, California, NC-5 and NC-6, had a total of 5 procedures in rapid succession at St. Paul that were fraudulently billed to 98 It North Carolina Blue Cross. On August 9,2003, both NC-5 and NC-6 had endoscopies by a non-Defendant surgeon at St. Paul. Two days later, on August 1 1, the wife had a colonoscopy by Defendant Rosenberg at St. Paul. A week after that, the husband had a colonoscopy, and then finished up a week later with a sweaty palms surgery. 273. A chart of the North Carolina Blue Cross patients described above is attached as Appendix Y. CLAIMS FOR RELIEF FIRST CLAIM FOR RELIEF Violation of 18 U.S.C. 5 1962(c) by Defendants Unity Outpatient Surgery Center, Inc.; Unity Outpatient Surgery Center LLC; St. Paul Outpatient Surgery Medical Center, Inc.; St. Paul Surgery Medical Center LLC; Anaheim West Outpatient Surgery Center Inc.; Lincoln Management Group, LLC.; St. Francis Outpatient Medical Center, Inc.; Inland Orange Medical Management, Inc.; Newport Superior Outpatient Medical Center, Inc.; Newport Superior Management Group LLC; Tam Vu Pham a/k/a Tom Vu; Huong Thien Ngo; Rosalinda Landon; Andrew Harnen; Catherine Bach; Ardalan Babaknia, M.D.; Michael Chan, M.D.; Byung Chun, M.D.; Moustafa El Alamy, M.D.; John Eugene, M.D.; William Hampton, M.D.; Lars Hanson, M.D.; Chin Kim, M.D.; Robert J. McKenna, M.D.; Martha Madrid, M.D.; Bharat Patel, M.D.; Amer Rayyes, M.D.; Mario Z. Rosenberg, M.D.; Lloyd White, M.D. (Vu Enterprise) 274. Plaintiffs repeat and reallege each and every allegation contained in paragraphs 1 through 273 above as if set forth here in its entirety. I 275. In executing their fraudulent scheme, Defendants Unity Outpatient Surgery Center, Inc.; Unity Outpatient Surgery Center LLC; St. Paul Outpatient Surgery Medical Center, Inc.; St. Paul Surgery Medical Center LLC; Anaheim West Outpatient Surgery Center Inc.; Lincoln Management Group, LLC.; St. Francis Outpatient Medical Center, Inc.; Inland Orange Medical Management, Inc.; Newport Superior Outpatient Medical Center, Inc.; Newport Superior Management Group LLC; Tarn Vu Pham a/k/a Tom Vu; Huong Thien Ngo; Rosalinda Landon; Andrew Harnen; Catherine Bach; Ardalan Babaknia, M.D.; Michael Chan, M.D.; Byung Chun, M.D.; Moustafa El Alamy, M.D.; John Eugene, M.D.; William Harnpton, M.D.; Lars Hanson, M.D.; Chin Kim, M.D.; Robert J. McKenna, M.D.; Martha Madrid, M.D.; Bharat Patel, M.D.; h e r Rayyes, M.D.; Mario Z. Rosenberg, M.D.; and Lloyd White, M.D., and their agents, made extensive use of the United States mails, including by mailing fraudulent claims, fraudulent medical records, and fraudulent correspondence to Plaintiffs and by receiving via the mails fraudulently procured benefits from ,1 Plaintiffs. Those Defendants and their agents also used interstate wires during interstate phone calls with prospective patients and recruiters as part of the patient recruitment process, and with Plaintiffs in their fraudulent attempts to obtain preauthorization for surgeries and to collect benefits after the surgeries. 100 276. Each such use of the mails and each interstate wire communication in furtherance of Defendants fraudulent scheme violated the federal mail fraud and federal wire fraud statutes, 18 U.S.C. 7 $5 1341 and 1343. 277. Each of those violations constitutes "racketeering activity" within the meaning of 1 8 U.S.C. 8 196l(1). Collectively, those violations, carried out over an extended period of time, constitute a "pattern of racketeering activity" within the meaning of 18 U.S.C. 5 l961(5). 278. The Vu clinics -- Unity, St. Paul, Anaheim West, St. Francis and Newport Superior -- constitute an enterprise within the meaning of 18 U.S.C. 1961 (4) that engages in or affects interstate commerce. 279. The Defendants named in this Claim are "persons" within the meaning of 18 U.S.C. 5 5 196 l(3) who conducted, participated in, operated, managed and/or controlled the affairs of the Vu Enterprise through a pattern of racketeering activity, in violation of 18 U.S.C. 5 1962(c). 280. Plaintiffs have been injured in their business and property as a proximate result of this violation of 18 U.S.C. 5 1962(c), in that they have paid substantial sums in health care benefits to those Defendants and others in justifiable reliance on the fraudulent bills, medical records, and other documents submitted to them by Defendants. 281. By reason of this violation of 18 U.S.C. 5 1962(c), these Defendants are jointly and severally liable to Plaintiffs for three times the damages Plaintiffs have sustained, plus Plaintiffs costs in this suit, including reasonable attorneys' fees. 7 SECOND CLAIM FOR RELIEF Violation of 18 U.S.C. 5 1962(c) by Defendants Unity Outpatient Surgery Center, Inc.; Unity Outpatient Surgery Center LLC; Tam Vu Pham a/k/a Tom Vu; Huong Thien Ngo; Rosalinda Landon; Andrew Harnen; Michael Chan, M.D.; William Hampton, M.D.; Chin Kim, M.D.; Robert J. McKenna, M.D.; Martha Madrid, M.D.; Mario Z. Rosenberg, M.D.; Lloyd White, M.D. (Unity Clinic Enterprise) 282. Plaintiffs repeat and reallege each and every allegation contained in paragraphs 1 through 273 above as if set forth here in its entirety. 283. In executing their fraudulent scheme, Defendants Unity Outpatient Surgery Center, Inc.; Unity Outpatient Surgery Center LLC; Tam Vu Pham alkla Tom Vu; Huong Thien Ngo; Rosalinda Landon; Andrew Harnen; Michael Chan, M.D.; William Harnpton, M.D.; Chin Kim, M.D.; Robert J. McKenna, M.D.; Martha Madrid, M.D.; Mario Z. Rosenberg, M.D.; and Lloyd White, M.D., and their agents, made extensive use of the United States mails, including by mailing fraudulent claims, fraudulent medical records, and fraudulent correspondence to Plaintiffs and by receiving via the mails fraudulently procured benefits from 102 Plaintiffs. Those Defendants and their agents also used interstate wires during interstate phone calls with prospective patients and recruiters as part of the patient recruitment process, and with Plaintiffs in their fraudulent attempts to obtain preauthorization for surgeries and to collect benefits after the surgeries. 284. Each such use of the mails and each interstate wire communication in furtherance of Defendants' fraudulent scheme violated the federal mail fraud and federal wire fraud statutes, 18 U.S.C. $5 1341 and 1343. 285. Each of those violations constitutes "racketeering activity" within the meaning of 18 U.S.C. $ 1961(1). Collectively, those violations, carried out over an extended period of time, constitute a "pattern of racketeering activity" within the meaning of 18 U.S.C. 5 1961(5). 286. The Unity clinic constitutes an enterprise within the meaning of 18 U.S.C. 5 196 l(4) that engages in or affects interstate commerce. 287. The Defendants named in this Claim are "persons" within the meaning of 18 U.S.C. $ 196 l(3) who conducted, participated in, operated, managed andlor controlled the affairs of the Unity Clinic Enterprise through a pattern of racketeering activity, in violation of 18 1J.S.C. tj 1962(c). 288. Plaintiffs have been injured in their business and property as a proximate result of this violation of 18 U.S.C. $ 1962(c), in that they have paid substantial sums in health care benefits to Defendants and others in justifiable 103 reliance on the fraudulent bills, medical records, and other documents submitted to them by Defendants. 289. By reason of this violation of 18 U.S.C. 5 1962(c), these Defendants are jointly and severally liable to Plaintiffs for three times the damages Plaintiffs have sustained, plus Plaintiffs' costs in this suit, including reasonable attorneys' fees. THIRD CLAIM FOR RELIEF Violation of 18 U.S.C. 5 1962(c) by Defendants St. Paul Outpatient Surgery Medical Center, Inc., St. Paul Surgery Medical Center LLC; Tam Vu Pham a/k/a Tom Vu; Huong Thien Ngo; Andrew Harnen; William Hampton, M.D.; Robert J . McKenna, M.D.; Martha Madrid, M.D.; Bharat Patel, M.D.; Mario Z. Rosenberg, M.D. (St. Paul Clinic Enterprise) 290. Plaintiffs repeat and reallege each and every allegation contained in paragraphs 1 through 273 above as if set forth here in its entirety. 291. In executing their fraudulent scheme, Defendants St. Paul Outpatient Surgery Medical Center, Inc.; St. Paul Surgery Medical Center LLC; Tam Vu Pham a/k/a Tom Vu; Huong Thien Ngo; Andrew Harnen; William Hampton, M.D.; Robert J. McKenna, M.D.; Martha Madrid, M.D.; Bharat Patel, M.D.; and Mario 2. Rosenberg, M.D.; and their agents, made extensive use of the United States mails, including by mailing fraudulent claims, fraudulent medical records, 104 and fraudulent correspondence to Plaintiffs and by receiving via the mails fraudulently procured benefits from Plaintiffs. Those Defendants and their agents also used interstate wires during interstate phone calls with prospective patients and recruiters as part of the patient recruitment process, and with Plaintiffs in their fraudulent attempts to obtain pre-authorization for surgeries and to collect benefits after the surgeries. 292. Each such use of the mails and each interstate wire communication in furtherance of Defendants' fraudulent scheme violated the federal mail fraud and federal wire fraud statutes, 18 U.S.C. $ $ 1341 and 1343. 293. Each of those violations constitutes "racketeering activity" within the meaning of 18 U.S.C. $ 196 l(1). Collectively, those violations, carried out over an extended period of time, constitute a "pattern of racketeering activity" within the meaning of 18 U.S.C. $ 1961(5). 294. The St. Paul clinic constitutes an enterprise within the meaning of 18 U.S.C. $ 196 l(4) that engages in or affects interstate commerce. 295. The Defendants named in this Claim are "persons" within the meaning of 18 U.S.C. $ 1961(3) who conducted, participated in, operated, managed andlor controlled the affairs of the St. Paul Clinic Enterprise through a pattern of racketeering activity, in violation of 18 U.S.C. $ 1962(c). 296. Plaintiffs have been injured in their business and property as a proximate result of this violation of 18 U.S.C. 5 1962(c), in that they have paid substantial sums in health care benefits to Defendants and others in justifiable reliance on the fraudulent bills, medical records, and other documents submitted to them by Defendants. 297. By reason of this violation of 18 U.S.C. 5 1962(c), these Defendants are jointly and severally liable to Plaintiffs for three times the damages Plaintiffs have sustained, plus Plaintiffs' costs in this suit, including reasonable attorneys' fees. FOURTH CLAIM FOR RELIEF Violation of 18 U.S.C. 5 l962(c) by Defendants Anaheim West Outpatient Surgery Center Inc.; Lincoln Management Group, LLC.; Tam Vu Pham a/k/a Tom Vu; Huong Thien Ngo; Rosalinda Landon; Andrew Harnen; Michael Chan, M.D.; Byung Chun, M.D.; Moustafa El Alamy, M.D.; John Eugene, M.D.; Chin Kim, M.D.; Mario 2. Rosenberg, M.D.; Lloyd White, M.D. (Anaheim West Clinic Enterprise) 298. Plaintiffs repeat and reallege each and every allegation contained in paragraphs 1 through 273 above as if set forth here in its entirety. 299. In executing their fraudulent scheme, Defendants Anaheim West Outpatient Surgery Center Inc.; Lincoln Management Group, LLC.; Tam Vu Pharn a/k/a Tom Vu; Huong Thien Ngo; Rosalinda Landon; Andrew Harnen; Michael 106 Chan, M.D.; Byung Chun, M.D.; Moustafa El Alamy, M.D.; John Eugene, M.D.; Chin Kim, M.D.; Mario Z. Rosenberg, M.D.; and Lloyd White, M.D., and their agents, made extensive use of the United States mails, including by mailing fraudulent claims, fraudulent medical records, and fraudulent correspondence to Plaintiffs and by receiving via the mails fraudulently procured benefits from Plaintiffs. Those Defendants and their agents also used interstate wires during interstate phone calls with prospective patients and recruiters as part of the patient recruitment process, and with Plaintiffs in their fraudulent attempts to obtain preauthorization for surgeries and to collect benefits after the surgeries. 300. Each such use of the mails and each interstate wire communication in furtherance of Defendants' fraudulent scheme violated the federal mail fraud and federal wire fraud statutes, 18 U.S.C. $8 1341 and 1343. 301. Each of those violations constitutes "racketeering activity" within the meaning of 18 U.S.C. $ 196 l(1). Collectively, those violations, carried out over an extended period of time, constitute a "pattern of racketeering activity" within the meaning of 1 8 U.S.C. $ 1 96 l(5). 302. The Anaheim West clinic constitutes an enterprise within the meaning of 18 U.S.C. $ 1961(4) that engages in or affects interstate commerce. 303. The Defendants on this Claim are "persons" within the meaning of 18 U.S.C. 196l(3) who conducted, participated in, operated, managed and/or 107 controlled the affairs of the Anaheim West Clinic Enterprise through a pattern of racketeering activity, in violation of 18 U.S.C. $ l962(c). 304. Plaintiffs have been injured in their business and property as a proximate result of this violation of 18 U.S.C. $ 1962(c), in that they have paid substantial sums in health care benefits to Defendants and others in justifiable reliance on the fraudulent bills, medical records, and other documents submitted to them by Defendants. 305. By reason of this violation of 18 U.S.C. 5 l962(c), these Defendants are jointly and severally liable to Plaintiffs for three times the damages Plaintiffs have sustained, plus Plaintiffs' costs in this suit, including reasonable attorneys' fees. FIFTH CLAIM FOR RELIEF St. Francis Outpatient Medical Center, Inc.; Inland Orange Medical Management, Inc.; Tam Vu Pham a/k/a Tom Vu; Huong Thien Ngo; Martha Madrid, M.D.; Mario Z. Rosenberg, M.D. (St. Francis Clinic Enterprise) 306. Plaintiffs repeat and reallege each and every allegation contained in paragraphs 1 through 273 above as if set forth here in its entirety. 307. In executing their fraudulent scheme, Defendants St. Francis Outpatient Medical Center, Inc.; Inland Orange Medical Management, Inc.; Tam Vu Pham a/k/a Tom Vu; Huong Thien Ngo; Martha Madrid, M.D.; and Mario 2. Rosenberg, M.D., and their agents, made extensive use of the United States mails, including by mailing fraudulent claims, fraudulent medical records, and fraudulent correspondence to Plaintiffs and by receiving via the mails fraudulently procured benefits from Plaintiffs. Those Defendants and their agents also used interstate wires during interstate phone calls with prospective patients and recruiters as part of the patient recruitment process, and with Plaintiffs in their fraudulent attempts to obtain pre-authorization for surgeries and to collect benefits after the surgeries. 308. Each such use of the mails and each interstate wire communication in furtherance of Defendants' fraudulent scheme violated the federal mail fraud and federal wire fraud statutes, 18 U.S.C. $5 1341 and 1343. 309. Each of those violations constitutes "racketeering activity" within the meaning of 18 U.S.C. $ 196l(1). Collectively, those violations, carried out over an extended period of time, constitute a "pattern of racketeering activity" within the meaning of 18 U.S.C. $ 1961(5). 310. The St. Francis clinic constitutes an enterprise within the meaning of 18 U.S.C. $ 196l(4) that engages in or affects interstate commerce. 311. The Defendants named in this Claim are "persons" within the meaning of 1 8 U.S.C. $ 1961 (3) who conducted, participated in, operated, managed and/or controlled the affairs of the St. Francis Clinic Enterprise through a 109 pattern of racketeering activity, in violation of 18 U.S.C. 5 1962(c). 312. Plaintiffs have been injured in their business and property as a proximate result of this violation of 18 U.S.C. 5 1962(c), in that they have paid substantial sums in health care benefits to those Defendants and others in justifiable reliance on the fraudulent bills, medical records, and other documents submitted to them by Defendants. 313. By reason of this violation of 18 U.S.C. 5 1962(c), these Defendants are jointly and severally liable to Plaintiffs for three times the damages Plaintiffs have sustained, plus Plaintiffs' costs in this suit, including reasonable attorneys' fees. SIXTH CLAIM FOR RELIEF Violation of 18 U.S.C. 5 1962(c) by Defendants Newport Superior Outpatient Medical Center, Inc.; Newport Superior Management Group LLC; Tam Vu Pham a/k/a Tom Vu; Huong Thien Ngo; Catherine Bach; Ardalan Babaknia, M.D.; Moustafa El Alamy, M.D.; Lars Hanson, M.D.; Amer Rayyes, M.D.; Mario Z. Rosenberg, M.D. (Newport Superior Clinic Enterprise) 314. Plaintiffs repeat and reallege each and every allegation contained in paragraphs 1 through 273 above as if set forth here in its entirety. 3 15. In executing their fraudulent scheme, Defendants Newport Superior Outpatient Medical Center, Inc.; Newport Superior Management Group LLC; Tam Vu Pham a/k/a Tom Vu; Huong Thien Ngo; Catherine Bach; Ardalan Babaknia, M.D.; Moustafa El Alamy, M.D.; Lars Hanson, M.D.; Arner Rayyes, M.D.; and Mario 2. Rosenberg, M.D., and their agents, made extensive use of the United States mails, including by mailing fraudulent claims, fraudulent medical records, and fraudulent correspondence to Plaintiffs and by receiving via the mails fraudulently procured benefits from Plaintiffs. Those Defendants and their agents also used interstate wires during interstate phone calls with prospective patients and recruiters as part of the patient recruitment process, and with Plaintiffs in their fraudulent attempts to obtain pre-authorization for surgeries and to collect benefits after the surgeries. 3 16. Each such use of the mails and each interstate wire communication in furtherance of Defendants' fraudulent scheme violated the federal mail fraud and federal wire fraud statutes, 18 U.S.C. $$ 1341 and 1343. 317. Each of those violations constitutes "racketeering activity" within the meaning of 18 U.S.C. $ 1961(1). Collectively, those violations, carried out over an extended period of time, constitute a "pattern of racketeering activity" within the meaning of 18 U.S.C. $ 1961(5). 318. The Newport Superior clinic constitutes an enterprise within the meaning of 18 U.S.C. $ 196 l(4) that engages in or affects interstate commerce. I 319. The Defendants named in this Claim are "persons" within the meaning of 18 U.S.C. 5 1961(3) who conducted, participated in, operated, managed andfor controlled the affairs of the Newport Superior Clinic Enterprise through a pattern of racketeering activity, in violation of 18 U.S.C. 5 1962(c). 320. Plaintiffs have been injured in their business and property as a proximate result of this violation of 18 U.S.C. 1962(c), in that they have paid substantial sums in health care benefits to Defendants and others in justifiable reliance on the fraudulent bills, medical records, and other documents submitted to them by Defendants. 321. By reason of this violation of 18 U.S.C. 5 l962(c), these Defendants are jointly and severally liable to Plaintiffs for three times the damages Plaintiffs have sustained, plus Plaintiffs' costs in this suit, including reasonable attorneys' fees. SEVENTH CLAIM FOR RELIEF I Violation of 18 U.S.C. 5 1962(c) by Defendants Millennium Outpatient Surgery Center, A Medical Corporation; Thu Ngoc Pham a/k/a Perry Pham; Ardalan Babaknia, M.D.; Michael Chan, M.D.; Byung Chun, M.D.; Moustafa El Alamy, M.D.; Leon Halac, M.D.; Madhukar Jigjinni, M.D.; Bharat Patel, M.D.; Mario 2. Rosenberg, M.D.; Youn S. Toh, M.D. (Millennium Clinic Enterprise) I 322. Plaintiffs repeat and reallege each and every allegation contained in paragraphs 1 through 273 above as if set forth here in its entirety. 1 323. In executing their fraudulent scheme, Defendants Millennium Outpatient Surgery Center, A Medical Corporation; Thu Ngoc Pham a/k/a Perry Pham; Ardalan Babaknia, M.D.; Michael Chan, M.D.; Byung Chun, M.D.; Moustafa El Alamy, M.D.; Leon Halac, M.D.; Madhukar Jigjinni, M.D.; Bharat Patel, M.D.; Mario Z. Rosenberg, M.D.; and Youn S. Toh, M.D., and their agents, made extensive use of the United States mails, including by mailing fraudulent claims, fraudulent medical records, and fraudulent correspondence to Plaintiffs and by receiving via the mails fraudulently procured benefits from Plaintiffs. Those Defendants and their agents also used interstate wires during interstate phone calls with prospective patients and recruiters as part of the patient recruitment process, and with Plaintiffs in their fraudulent attempts to obtain preauthorization for surgeries and to collect benefits after the surgeries. 324. Each such use of the mails and each interstate wire communication in furtherance of Defendants fraudulent scheme violated the federal mail fraud and federal wire fraud statutes, 18 U.S.C. 7 $5 1341 and 1 343. 7 325. Each of those violations constitutes "racketeering activity ' within the meaning of 18 U.S.C. 5 1961(1). Collectively, those violations, carried out over an extended period of time, constitute a "pattern of racketeering activity" within the meaning of 18 U.S.C. 5 196 1(5). 326. The Millennium clinic constitutes an enterprise within the meaning of 18 U.S.C. 5 196 l(4) that engages in or affects interstate commerce. 327. The Defendants named in this Claim are "persons" within the meaning of 18 U.S.C. 5 1961(3) who conducted, participated in, operated, managed and/or controlled the affairs of the Millennium Clinic Enterprise through a pattern of racketeering activity, in violation of 18 U.S.C. 5 1962(c). 328. Plaintiffs have been injured in their business and property as a proximate result of this violation of 18 U.S.C. $ 1962(c), in that they have paid substantial sums in health care benefits to Defendants and others in justifiable reliance on the fraudulent bills, medical records, and other documents submitted to them by Defendants. 329. By reason of this violation of 18 U.S.C. 5 1962(c), these Defendants are jointly and severally liable to Plaintiffs for three times the damages Plaintiffs have sustained, plus Plaintiffs' costs in this suit, including reasonable attorneys' fees. EIGHTH CLAIM FOR RELIEF Violation of 18 U.S.C.  1962(c) by Defendants Harbor Multi-Specialty Surgical Center, Inc.; Paratha Govindarajan, M.D. (Harbor Clinic Enterprise) 330. Plaintiffs repeat and reallege each and every allegation contained in paragraphs 1 through 273 above as if set forth here in its entirety. 114 33 1. In executing their fraudulent scheme, Harbor Multi-Specialty Surgical Center, Inc. and Paratha Govindarajan, M.D., and their agents, made extensive use of the United States mails, including by mailing fraudulent claims, fraudulent medical records, and fraudulent correspondence to Plaintiffs and by receiving via the mails fraudulently procured benefits from Plaintiffs. Those Defendants and their agents also used interstate wires during interstate phone calls with prospective patients and recruiters as part of the patient recruitment process, and with Plaintiffs in their fraudulent attempts to obtain pre-authorization for surgeries and to collect benefits after the surgeries. 332. Each such use of the mails and each interstate wire communication in furtherance of Defendants' fraudulent scheme violated the federal mail fraud and federal wire fraud statutes, 18 U.S.C. fj fj 1341 and 1343. 333. Each of those violations constitutes "racketeering activity" within the meaning of 18 U.S.C. $ 196 l(1). Collectively, those violations, carried out over an extended period of time, constitute a "pattern of racketeering activity" within the meaning of 18 U.S.C. $ 1961(5). 334. The Harbor clinic constitutes an enterprise within the meaning of 18 U.S.C. fj 1961(4) that engages in or affects interstate commerce. 335. The Defendants named in this Claim are "persons" within the () meaning of 18 U.S.C. fj 196 l 3 who conducted, participated in, operated, 1I 1I managed andor controlled the affairs of the Harbor Clinic Enterprise through a pattern of racketeering activity, in violation of 18 U.S.C. 5 1962(c). 336. Plaintiffs have been injured in their business and property as a proximate result of this violation of 18 U.S.C. 5 1962(c), in that they have paid substantial sums in health care benefits to Defendants and others in justifiable reliance on the fkaudulent bills, medical records, and other documents su6mitted to them by Defendants. 337. By reason of this violation of 18 U.S.C. 9 1962(c), these Defendants are jointly and severally liable to Plaintiffs for three times the damages Plaintiffs have sustained, plus Plaintiffs' costs in this suit, including reasonable attorneys' fees. IYlXTH CLAIM FOR RELIEF Violation of 18 U.S.C.  1962(c) by Defendants Pacific Outpatient Medical Center, A Medical Corporation; Pacific Outpatient Medical Management Group LLC; Moustafa El Alamy, M.D.; Edgar Lluncor, M.D.; and Amer Rayyes, M.D. (Pacific Clinic Enterprise) 338. Plaintiffs repeat and reallege each and every allegation contained in paragraphs 1 through 273 above as if set forth here in its entirety. 339. In executing their fkaudulent scheme, Defendants Pacific Outpatient Medical Center, A Medical Corporation; Pacific Outpatient Medical Management Group LLC; Moustafa El Alarny, M.D.; Edgar L,luncor, M.D.; and h e r Rayyes, 1I6 M.D., and their agents, made extensive use of the United States mails7including by mailing fiaudulent claims, fiaudulent medical records, and fiaudulent correspondence to Plaintiffs and by receiving via the mails fraudulently procured benefits fiom Plaintiffs. Those Defendants and their agents also used interstate wires during interstate phone calls with prospective patients and recruiters as part of the patient recruitment process, and with Plaintiffs in their fiaudulent attempts to obtain pre-authorization for surgeries and to collect benefits af3er the surgeries. 340. Each such use of the mails and each interstate wire communication in hrtherance ofDefendants fi-audulentscheme violated the federal mail fi-aud and federal wire fiaud statutes, 18 U.S.C. 7 $5 1341 and 1343. 341. Each of those violations constitutes "racketeering activitf7 within the meaning of 18 U.S.C. $ 1961(1). Collectively, those violations carried out over 7 an extended period of time, constitute a "pattern of racketeering activity" within the meaning of 18 1J.S.C. 5 1 %l(5). 342. The Pacific clinic constitutes an enterprise within the meaning of 18 1J.S.C. fj1961(4) that engages in or affects interstate commerce. 343. The Defendants named in this Claim are "persons ' within the meaning of 18 U.S.C. 7 5 196l(3) who conducted, participated in, operated, managed and/or controlled the affairs of the Pacific Clinic Enterprise through a pattern of racketeering activity, in violation of 18 U.S.C. $ 1962(c). 344. Plaintiffs have been injured in their business and property as a proximate result of this violation of 18 U.S.C.  1962(c), in that they have paid substantial sums in health care benefits to Defendants and others in justifiable reliance on the fiaudulent bills, medical records, and other documents submitted to them by Defendants. 345. By reason of this violation of 18 U.S.C.  1962(c), these Defendants are jointly and severally liable to Plaintiffs for three times the damages Plaintiffs have sustained, plus Plaintiffs' costs in this suit, including reasonable attorneys' fees. TENTH CLAIM FOR RELIEF Violation of 18 U.S.C. 5 1962(c) by Defendants Premium Outpatient Surgery Center9A Medical Corporation; Byung Chun, M.D.; William Hampton, M.D. (Premium Clinic Enterprise) 346. Plaintiffs repeat and reallege each and every allegation contained in paragraphs 1 through 273 above as if set forth here in its entirety. 347. In executing their fi-audulentscheme, Defendants Premium Outpatient Surgery Center, A Medical Corporation; Byung Chun, M.D.; and William Hampton, M.D., and their agents, made extensive use of the United States mails, including by mailing fiaudulent claims, fiaudulent medical records, and fiaudulent correspondence to Plaintiffs and by receiving via the mails fraudulently procured benefits from Plaintiffs. Those Defendants and their agents also used interstate wires during interstate phone calls with prospective patients and recruiters as part of the patient recruitment process, and with Plaintiffs in their fiaudulent attempts to obtain pre-authorization for surgeries and to collect benefits after the surgeries. 348. Each such use of the mails and each interstate wire communication in hrtherance of Defendants fiaudulent scheme violated the federal mail Gaud and federal wire fraud statutes?18 U.S.C. 7 $5 1341 and 1343. 7 349. Each of those violations constitutes "racketeering activity ' within the meaning of 18 U.S.C. 5 1961(1). Collectively those violations, carried out over 7 an extended period of time, constitute a "pattern of racketeering activity" within the meaning of 18 U.S.C. 5 1961(5). 350. The Premium clinic constitutes an enterprise within the meaning of 18 U.S.C. 5 1961(4) that engages in or affects interstate commerce. 351. The Defendants named in this Claim are "persons" within the meaning of 18 U.S.C. 5 1961(3) who conducted, participated in, operated 7 managed andor controlled the affairs of the Premium Clinic Enterprise through a pattern of racketeering activity, in violation of 18 U.S.C. fj 1962(c). 352. Plaintiffs have been injured in their business and property as a proximate result of this violation of 18 1J.S.C. 5 1962(c), in that they have paid substantial sums in health care benefits to Defendants and ot.hers in justifiable I 1 1I reliance on the fi-audulent bills, medical records, and other documents submitted to them by Defendants. 353. By reason of this violation of 18 U.S.C.  l962(c), these Defendants are jointly and severally liable to Plaintiffs for three times the damages Plaintiffs have sustained, plus Plaintiffs' costs in this suit, including reasonable attorneys 7 1I 1I ELEmNTH CLAIM FOR RELIEF Common Law Fraud By Defendants Unity Outpatient Surgery Center, Inc.; Unity Outpatient Surgery Center LLC; Millennium Outpatient Surgery Center, A Medical Corporation; St. Paul Outpatient Surgery Medical Center, Inc.; St. Paul Surgery Medical Center LLC; Anaheim West Outpatient Surgery Center Inc.; Lincoln Maoagement Group, LLC.; St. Francis Outpatient Medical Center, Inc.; Inland Orange Medical Management, Inc.; Newport Superior Outpatient Medical Center, Inc.; Newport Superior Management Group LLC; Harbor Multi-Specialty Surgical Center, Inc.; Pacific Outpatient Medical Center, A Medical Corporation; Pacific Outpatient Medical Management Group LLC; Premium Outpatient Surgery Center, A Medical Corporation; Tam Vu Pham a M a Tom Vu; Huong Thien Ngo; Gordon Merrick; Rosalinda Landon; Andrew Harnen; Catherine Bach; Thu Ngoc Pham aIWa Perry Pham; Ardalan Babaknia, M.D.; Michael Chan, M.D.; Byung Chun, M.D.; Moustafa El Alamy, M.D.; ,John Eugene, M.D.; Paratha Govindarajan, M.D.; Leon Halac, M.D.; William Hampton, M.D.; Lars Hanson, M.D.; Madhukar Jigjinni, M.D.; Chin Kim, M.D.; Edgar Lluncor, M.D.; Robert J. McKenna, M.D.; Martha Madrid, M.D.; Bharat Patel, M.D.; Amer Rayyes, M.D.; Daniel Rose, M.D.; Mario 2. Rosenberg, M.D.; Hamilton Sah, M.D.; Youn S. Toh, M.D.; Lloyd White, M.D. 354. Plaintiffs repeat and reallege each and every allegation contained in paragraphs 1 through 2'73 above as if set forth here in its entirety. u1' 355. Over the course of their fraudulent schemes, and in furtherance thereof, the Defendants named in this Claim knowingly made, directed others to make, aided and abetted the making of, and conspired with respect to the making of, false representations to Plaintiffs and others, and concealed material facts from Plaintiffs and others, concerning, among other subjects, patients' medical conditions, patients' symptoms, histories and diagnoses, patients' need for surgery, the surgical procedures performed on patients, the illegal recruitment of patients, and sham ownership of the clinics. Defendants made, directed others to make, aided and abetted the making of, and conspired with respect to the making of, such false representations, and concealed material facts, with the intent and effect of inducing Plaintiffs to rely thereon, and to pay health benefits to Defendants and others that Plaintiffs were not obligated to pay and that Plaintiffs would not have paid if not for the misrepresentations. Plaintiffs reasonably and justifiably relied on those knowingly false representations and omissions, and suffered damages as a result. 356. Defendants' conduct was fraudulent, oppressive, intentional, wanton, willful, malicious and in disregard of Plaintiffs' rights. 357. The fraud committed by the surgeon Defendants for which Plaintiffs seek damages includes fraud committed in connection with surgeries they performed at non-Defendant clinics, including but not limited to Pacific Wilshire Medical and Surgical Center and Camel Surgical Center. 35 8. By reason of Defendants' fiaud and their conspiracy, these Defendants are jointly and severally liable to Plaintiffs for the damages Plaintiffs have sustained, plus punitive damages in an amount to be determined at trial. TWELFTH CLAIM FOR RELDCF Unjust EnrichmentRestitution Against Defendants Unity Outpatient Surgery Center, Inc.; Unity Outpatient Surgery Center 1,LC; Millennium Outpatient Surgery Center, A Medical Corporation; St. Paul Outpatient Surgery Medical Center, Inc.; St. Paul Surgery Medical Center LLC; Anaheim West Outpatient Surgery Center Inc.; Lincoln Management Group, LLC.; St. Francis Outpatient Medical Center, Inc.; Inland Orange Medical Management, Inc.; Newport Superior Outpatient Medical Center, Inc.; Newport Superior Management Group LLC; Harbor Multi-Specialty Surgical Center, Inc.; Pacific Outpatient Medical Center, A Medical Corporation; Pacific Outpatient Medical Management Group LLC; Premium Outpatient Surgery Center, A Medical Corporation; Tam Vu Pham alkla Tom Vu; Huong Thien Ngo; Lan Thi Ngoc Nguyen; Gordon Merrick Rosalinda Landon; Dee Francis; Andrew Harnen; Daniel Romanello; Ocher County Clinics, Inc.; Mitchell Rubin; Steven Rubin; Catherine Bach; Thu Ngoc Pham alkla Perry Pham; Michael Schneider; Ardalan Babaknia, M.D.; Michael Chan, M.D.; Byung Chun, M.D.; Moustafa El Alamy, M.D.; John Eugene, M.D.; Paratha Govindarajan, M.D.; Leon Halac, M.D.; William Hampton, M.D.; Lars Hanson, M.D.; Madhukar Jigjinni, M.D.; Chin Kim, M.D.; Edgar Lluncor, M.D.; Robert J. McKenna, M.D.; Martha Madrid, M.D.; Bharat Patel, M.D.; Amer Rayyes, M.D.; Daniel Rose, M.D.; Mario Z. Rosenberg, M.D.; Hamilton Sah, M.D.; Youn S. Toh, M.D.; Lloyd White, M.D. 359. Plaintiffs repeat and reallege each and every allegation contained in paragraphs 1 through 273 above as if set forth here in its entirety. 360. By reason of their wrongdoing as alleged above, Defendants named in this Claim have been unjustly enriched?in that they have received monies in connection with illegal activities directed at Plaintiffs that in equity and good conscience they should not be permitted to keep. 361. Plaintiffs are entitled to restitution fiom Defendants under state andor federal c o r n o n law in the amount by which Defendants have been unjustly THIRTEENTH CLAIM FOR RELIEF' Negligent Misrepresentation By Defendants Unity Outpatient Surgery Center, Inc.; Millennium Outpatient Surgery Center, A Medical Corporation; St. Paul Outpatient Surgery Medical Center, Inc.; Anaheim West Outpatient Surgery Center Inc.; St. Francis Outpatient Medical Center, Inc.; Newport Superior Outpatient Medical Center, Inc.; Harbor Multi-Specialty Surgical Center, Inc.; Pacific Outpatient Medical Center, A Medical Corporation; Premium Outpatient Surgery Center, A Medical Corporation; Ardalan Babaknia, M.D.; Michael Chan, M.D.; Byung Chun, M.D.; Moustafa El Aiamy, M.D.; John Eugene, M.D.; Paratha Govindarajan, M.D.; Leon Halac, M.D.; William Hampton, M.D.; Madhukar .Jigjinni, M.D.; Chin Kim, M.D.; Edgar Lluncor, M.D.; Robert J. McKenna, M.D.; Martha Madrid, M.D.; Bharat Patel, M.D.; Amer Rayyes, M.D.; Daniel Rose, M.D.; Mario Z. Rosenberg, M.D.; Youn S. Toh, M.D.; Lloyd White, M.D362. Plaintiffs repeat and reallege each and every allegation contained in paragraphs 1 through 273 above as if set forth here in its entirety. 363. In submitting claims?medical records?and other materials to Plaintiffs?Defendants named in this Claim made?or caused to be made, materially 1I false representations to Plaintiffs with no reasonable ground for believing them to be true, and omitted, or caused to be omitted, material information that they had a duty to disclose. If any of those material misrepresentations or omissions were made without knowledge or a conscious intent to deceive, then, at a minimum, such misrepresentations or omissions were made negligently andor recklessly and without regard to their truth or falsity or their likelihood to mislead. 364. Plaintiffs justifiably relied on Defendants material misrepresentations and omissions, which proximately caused damage to Plaintiffs365. Defendants are jointly and severally liable to Plaintiffs for the damages Plaintiffs sustained as a result of those material misrepresentations and omissions. FOURTEENTH CLAIM FOR RELIEF Imposition of a Constructive Trust on Assets of Defe~dants Unity Outpatient Surgery Center, Inc.; Unity Outpatient Surgery Center LLC; Millennium Outpatient Surgery Center, A Medical Corporation; St. Paul Outpatient Surgery Medical Center, Inc.; St. Paul Surgery Medical Center LAILC; Anaheim West Outpatient Surgery Center Inc.; Lincoln Management Group, LLC.; St. Francis Outpatient Medical Center9Inc.; Inland Orange Medical Management, Inc.; Newport Superior Outpatient Medical Center, Inc.; Newport Superior Management Group LLC; Harbor Multi-Specialty Surgical Center, Inc.; Pacific Outpatient Medical Center, A Medical Corporation; Pacific Outpatient Medical Management Group LLC; Premium Outpatient Surgery Center, A Medical Corporation; Tam Vu Pham a N a Tom Vu; Huong Thien Ngo; Lan Thi Ngoc Nguyen; Gordon Merrick; Rosalinda LAandon; Dee Franci3; Andrew Harnen; Daniel Romanello; Ocher County Clinics, Inc.; Mitchell Rubin; Steven Rubin; Catherine Bach; Thu Ngoc Pham a/Wa Perry Pham; Michael Schneider; Ardalan Babaknia, M.D.; Michael Chan, M.D.; Byung Chun, M.D.; Moustafa El Alamy, M.D.; John 124 7 1 Eugene, M.D.; M.D.; Leon M.D.; William M.D.; M.D.; Chin Hampton, M.D.; Kim, M.D.; Edgar Lluncor, M.D.; Robert J. M.D.; Martha Madrid, M.D.; Amer M.D.; Mario Rosenberg, M.D.; Hamilton Sah, Daniel Rose, Youn Toh, M.D.; Lloyd White, M.D. 366. Plaintiffs repeat and each and every allegation contained in paragraphs 1 through 273 above as if set forth here in its entirety. 367. Each of the Defendants named in this Claim received monies, whether directly from Plaintiffs, as distributions from corporations, or otherwise, which were obtained through fraudulent benefit claims submitted to Plaintiffs, represented the proceeds of fraudulent benefit claims submitted to Plaintiffs, or were traceable or attributable to fraudulent benefit claims submitted to Plaintiffs. 368. Defendants named in this Claim received those monies with actual knowledge or with actual or constructive notice that the monies were obtained through fraudulent benefit claims, represented the proceeds of fraudulent benefit claims, or were traceable or attributable to fraudulent benefit claims. 369. Under the common law of California, Defendants received those monies as constructive trustees for Plaintiffs, and a constructive trust is imposed on Defendants' assets to the extent of those monies. FIFTEENTH CLAIM FOR RELIEF Violation of California Business Professions Code 17200 et Against Defendants Unity Outpatient Surgery Center, Inc.; Unity Outpatient Surgery Center Millennium Outpatient Surgery Center, A Medical Corporation; St. Paul Outpatient Surgery Medical Center, Inc.; St. Paul Surgery Medical Center LLC; Anaheim West Outpatient Surgery Center Inc.; Lincoln Management Group, LLC.; St. Francis Outpatient Medical Center, Inc.; Inland Orange Medical Management, Inc.; Superior Outpatient Medical Center, Inc.; Superior Management Group LLC; Harbor Multi-Specialty Surgical Center, Inc.; Pacific Outpatient Medical Center, A Medical Corporation; Pacific Outpatient Medical Management Group LLC; Premium Outpatient Surgery Center, A Medical Corporation; Tam Vu Pham Tom Vu; Huong Thien Ngo; Lan Thi Ngoc Nguyen; Gordon Merrick; Rosalinda Dee Francis; Andrew Daniel Romanello; Ocher County Clinics, Inc.; Mitchell Steven Catherine Thu Ngoc Pham Perry Pham; Michael Schneider; Ardalan M.D.; Michael Chan, M.D.; Moustafa El M.D.; John Eugene, M.D.; M.D.; Leon M.D.; William M.D.; Lars M.D.; Madhukar M.D.; Chin Kim, M.D.; Edgar M.D.; Robert J. M.D.; Martha Madrid, M.D.; Bharat M.D.; Amer Daniel Rose, M.D.; Mario Z. Rosenberg, Hamilton Sah, M.D.; S. Toh, M.D.; Lloyd White, M.D. 370. Plaintiffs repeat and each and every allegation contained in paragraphs 1 through 273 above as if set forth here in its entirety. Defendants named in this claim have engaged in unfair competition, within the meaning of Section 17200 of the California Business Professions Code, by committing, directing, and facilitating violations of civil and criminal statutes. 372. With respect to patient recruiting and payments to patient recruiters, California Business and Professions Code 650 makes it unlawful for any health care provider to offer or pay a commission or any other consideration "as compensation or inducement for referring patients." California Insurance Code 750 prohibits anyone who regularly presents insurance claims from paying any commission or other consideration "as compensation or inducement . . .for the referral or procurement o f . . . patients." Violations of both of these statutes are punishable by fine or imprisonment or both. 373. In addition, California Insurance Code 1 1.7 makes it "unlawful to knowingly employ runners, cappers, steerers or other persons . . . to procure clients or patients to perform or obtain services or benefits under a contract of insurance or that will be the basis for a claim against an insured individual or his or her insurer." Violations of that statute are subject to a civil penalty plus an assessment of up to three times the amount of each claim pursuant to a contract of insurance. 374. Further, 549 of the California Penal Code makes it a crime to "solicit[ accept[ or any business to or from any individual or entity with the knowledge that, or with reckless disregard for whether, the individual or entity for or from whom the solicitation or referral is made, or the individual or entity who is solicited or referred, intends to violate Section 550 of this code." California Penal Code 550, in turn, makes it a crime to, inter alia, "aid, abet, solicit, or conspire with any person to . . make or cause to be made any false or fraudulent claim for payment of a health care benefit." Violations of both of these Penal Code sections are punishable by fine or imprisonment or both. 375. Defendant clinics and their agents have made violations of these statutes a daily business practice. Defendant clinics have regularly paid bounties to numerous recruiters, both inside and outside the State of California, for delivering patients to them to have unnecessary surgeries. 376. California Penal Code 471.5 also makes it a crime to "create[] any false medical record" "with fraudulent intent." Similarly, California Business Professions Code 2262 authorizes the State Division of Medical Quality to impose a disciplinary penalty and a fine on any doctor who medical record." 377. Defendant clinics and surgeons have created false operative reports, any false and other false medical records, for hundreds of patients drawn into their scheme, and they have done so for the sole purpose of defrauding insurance companies into paying for unnecessary surgeries. 378. Numerous Defendants have also violated, or aided and abetted the violation of, California statutes requiring that medical clinics be wholly owned by licensed physicians or their professional corporations, and prohibiting the corporate practice of medicine Cal. Business Professions Code 2400 and 15). 379. As detailed above, Defendant clinics and their owners, together with Defendant doctors willing to misuse their medical licenses, participated in sham ownership arrangements to make it appear that the clinics were wholly owned by licensed physicians, when in fact the beneficial ownership of the clinics belonged to laypersons and lay corporations. 380. Defendants' statutory violations and acts of unfair competition have injured, and continue to injure, Plaintiffs in the following manner: (a) by creating a medical sub-industry that is predicated on deceiving insurers; (b) by recruiting hundreds of people into the scheme to be used as vehicles for the submission of untold numbers of fraudulent claims; (c) by completely falsifying the medical records on which insurers must rely in benefit decisions; (d) by falsifying records to create the appearance of a covered procedure when the actual procedure under the circumstances is most definitely not covered; (e) by lying in order to cause Plaintiffs to pay Defendants millions of dollars that Plaintiffs would not have paid if the truth had been told. 381. Defendants' statutory violations and unfair competition have injured, and continue to injure, Plaintiffs' insureds and Defendants' patients generally, because they have created a market in which patients are bartered and exploited for their insurance benefits; because Defendants are too busy trying to scam insurers to give patients the type of care and attention they are entitled to; because they have exposed patients to serious and unnecessary medical risks; and because they have burdened countless patients with false medical and surgical histories. 382. The aforesaid violations continue and pose a threat to the general public. 383. Pursuant to Section of the California Business Professions Code, these facts require that Defendants and their agents be: (a) enjoined from paying any monies or giving any other consideration to patient recruiters, doctors, or any other person in exchange for patient referrals; (b) enjoined from creating any false or misleading medical record or from withholding any true medical record from any insurer; (c) enjoined from submitting any bill to an insurer, or from requesting payment on any previously submitted bill, if the patient was recruited as detailed above, and unless the bill and associated medical records each and accurately reflect necessary medical procedures actually performed on the patient; and (d) enjoined from owning, operating or managing any medical clinic, directly or indirectly, and from participating in any sham or deceptive ownership arrangement. 384. Pursuant to Section 17203 of the California Business Professions Code, the foregoing facts also require that Defendants be ordered to restore to Plaintiffs, and otherwise disgorge, any money that has been acquired from Plaintiffs, or acquired as part of a scheme to defraud Plaintiffs, by means of the foregoing acts of unfair competition. WHEREFORE, Plaintiffs demand judgment against the Defendants named in each Claim for Relief, jointly and severally, as follows: 1. On the First through Tenth Claims for Relief under RICO, three times the damages Plaintiffs have sustained as a result of the fraudulent conduct complained of, such amount to be determined at trial, plus Plaintiffs' costs in this action, including reasonable attorneys' fees; , 2. On the Eleventh Claim for Relief for fraud, the damages sustained by Plaintiffs, plus punitive damages, such amounts to be determined at trial; 3. On the Twelfth Claim for Relief for unjust enrichment, the amount by which Defendants have been unjustly enriched, such amounts to be determined at the damages Plaintiffs sustained as a result of those misrepresentations and/or , omissions, such amounts to be determined at trial; 5. On the Fourteenth Claim for imposition of a constructive trust, the imposition of a trust on Defendants' assets on behalf of Plaintiffs, to the full extent of Plaintiffs' payments procured by Defendants' wrongful acts, such amounts to be determined at trial; 6. On the Fifteenth Claim for statutory unfair competition: Permanently enjoining Defendants from paying any monies or giving (a) any other consideration to patient recruiters or any other person in exchange for patient referrals; (b) Permanently enjoining Defendants from creating any false or misleading medical record or from withholding any true medical record from any insurer; (c) Permanently enjoining Defendants from submitting any bill to an insurer, or from requesting payment on any previously submitted bill, if the patient was procured by unlawful patient recruiting and unless the bill and associated medical records each fully and accurately reflect all medical procedures actually performed on the patient; (d) Permanently enjoining Defendants from owning, operating or managing any medical clinic, directly or indirectly, from participating in any sham or deceptive ownership arrangement, and otherwise from violating California law concerning the ownership, operation or management of medical clinics or any similar facility; and (e) Requiring Defendants to restore to Plaintiffs, and otherwise to disgorge, any money that has been acquired from Plaintiffs, or acquired as part of a scheme to defraud Plaintiffs, by means of Defendants' acts of unfair competition. 7. Permanently enjoining Defendants from engaging in any of the fraudulent acts or practices identified herein, and from submitting to Plaintiffs any fraudulent or otherwise improper claim or request for payment, together with any other appropriate injunctive relief; 8. Awarding Plaintiffs interest and costs, including attorneys' fees; and Awarding Plaintiffs such other and further relief as the Court deems 9. just and proper. Dated: March 10,2005 By: Marvin Wexler 757 Third Avenue New York, New York 100 1 7 (2 12) 41 8-8600 & GROSSFELD LLP 4640 Admiralty Way, Suite 850 Marina Del Rey, California (310) 305-2100 Attorneys for Plaintiffs 133 DEMAND FOR JURY TRIAL Plaintiffs Blue Cross and Blue Shield of Alabama, Blue Cross and Blue Shield of Massachusetts, Inc., Blue Cross and Blue Shield of Michigan, Blue Cross and Blue Shield of Nebraska, Blue Cross and Blue Shield of North Carolina, BlueCross BlueShield Tennessee, Inc., Empire Blue Cross and Blue Shield, Assurance, Inc. d/b/a Empire Blue Cross Blue Shield, Health Plan, Inc. d/b/a Blue Cross Blue Shield, R.M.S.C.O., Blue Cross Blue Shield and d/b/a Inc., Inc. d/b/a Blue Shield, Premera Blue Cross, Regence Blue Shield, Regence BlueCross BlueShield of Utah, Regence BlueCross BlueShield of Oregon, and Regence of Idaho, hereby demand a trial by jury. Dated: March 10,2005 ER Marvin Wexler 757 Third Avenue New York, New York 10017 (212) 418-8600 & GROSSFELD 4640 Admiralty Way, Suite 850 Marina Del Rey, California 90292-6695 (310) 305-2100 Attorneys for Plaintiffs