The California Department of Insurance is investigating the business practices of Lap-Band surgery centers affiliated with the 1-800-GET-THIN advertising campaign, according to insurer Aetna Inc.
The insurance giant said in a statement that it was cooperating with the department's law enforcement branch, which has the power to make arrests and pursue criminal charges, to "investigate alleged fraud against our members by the 1-800-GET-THIN … surgery centers."
The state probe joins local and federal agencies investigating the businesses behind the ads that have become a fixture of Southern California airwaves and roadside billboards. The U.S. Food and Drug Administration, Los Angeles County Board of Supervisors and Congress are examining alleged misleading advertising and risks of the weight-loss surgery.
Officials with 1-800-GET-THIN and affiliated surgery centers said they were unaware of the new investigation and had broken no laws.
"1-800-GET-THIN has never engaged in any type of insurance fraud and has not been contacted by the Department of Insurance," the marketing firm's president, Robert Silverman, said in an email.
Konrad Trope, an attorney who represents the surgery centers affiliated with the ad campaign, said in an email: "My clients' medical facilities have been repeatedly inspected and reviewed and no wrongdoing has ever been found."
At least five Southern California patients have died after Lap-Band procedures at clinics in Beverly Hills and West Hills that are affiliated with the 1-800-GET-THIN campaign, according to lawsuits, autopsy reports and other public records. Manufactured by Irvine-based Allergan Inc., the Lap-Band is a silicone ring that is surgically implanted around the stomach to discourage overeating.
Lap-Band surgeries typically cost $12,000 to $20,000, according to Allergan. However, a recent lawsuit said the surgery centers have inflated costs and billed insurers many times that amount. In one instance, the lawsuit said, a patient was charged $179,000.
The Los Angeles County coroner is investigating the Sept. 8 death of Orange County resident Paula Rojeski, who died after Lap-Band surgery at a clinic affiliated with 1-800-GET-THIN. Ed Winter, the county's assistant chief coroner, said he was aware of law enforcement interest in the surgery centers.
"There's a couple entities looking at different aspects," Winter said. He would not identify the agencies or what they were investigating.
David Althausen, a spokesman for the Department of Insurance, would not confirm or deny that the agency was investigating the surgery centers.
Aetna declined to discuss the investigation beyond confirming that it was cooperating with authorities.
"Since this is an ongoing investigation, there is no additional information that I can share," spokeswoman Anjie Coplin said in an email.
The Department of Insurance has a team of investigators that looks into alleged insurance fraud. If the investigation finds criminal activity, the agency asks prosecutors to consider filing criminal charges, Althausen said.
Wayne Gross, a former federal prosecutor who now defends white-collar cases for Greenberg Traurig in Irvine, said the Department of Insurance has a team of investigators who work with federal and state prosecutors to bring criminal charges.
Prosecutors, either with the county district attorney's office or U.S. attorney's office, ultimately decide whether to file charges, said Gross, who as a federal prosecutor handled a fraud case that was investigated by the Department of Insurance.
The latest investigation follows a stream of civil litigation against 1-800-GET-THIN.
The lawsuits say that brothers Michael and Julian Omidi operate the lucrative weight-loss business out of offices in Beverly Hills.
Neither of the Omidis responded to a request for comment about the Department of Insurance investigation.
Two former employees alleged in a Jan. 17 whistle-blower lawsuit that workers at the surgery centers encouraged patients to have "medically unnecessary" surgeries and billed insurers for procedures that were not performed.
Westlake Village attorney Alexander Robertson, who represents former surgery center workers Dyanne Deuel and Karla Osorio in that lawsuit, declined to say whether his clients had met with law enforcement officials.
"Our lawsuit does allege fraudulent billing practices," Robertson said. "We alleged that their actions violated the state insurance code."
The lawsuit also accused the surgery centers of operating in unsanitary conditions, using equipment that was not properly sterilized and covering up the circumstances behind Rojeski's death.
According to the lawsuit, medical staff forgot to turn on the oxygen before Rojeski's surgery and a tube that was supposed to fill her bloodstream with medication became dislodged during surgery, causing the solution to pool on the floor.
Also pending are a series of wrongful-death lawsuits that seek damages from 1-800-GET-THIN, the surgery centers and doctors involved in the surgeries.
One lawsuit faulted the work of an anesthesiologist named Daniel Shin, who was on probation with the state medical board at the time of the surgery because of a criminal conviction for assault with a deadly weapon.
In December, the FDA stepped into the matter, issuing a warning letter to 1-800-GET-THIN that accused the firm of failing to adequately disclose risks of the surgery. Meanwhile, three members of Congress are calling for hearings on the advertising campaign and the safety and effectiveness of the Lap-Band device.
Silverman, the 1-800-GET-THIN president, told the Los Angeles County Board of Supervisors that the company had modified its website to address the FDA's concerns. The website now includes a prominent disclosure that the surgery can result in death.
At that meeting, Silverman also said the company planned to address the FDA's concerns about the billboards. Many of the billboards remain unchanged.
Attorneys for 1-800-GET-THIN said in a court filing last year that the marketing firm had scheduled more than 10,000 Lap-Band surgeries in its first 15 months.
Times staff writer W.J. Hennigan contributed to this report.Copyright © 2015, Los Angeles Times