Police Say Scam Used Teen Blood

Health officials and police on Tuesday arrested four medical lab employees for allegedly paying Compton teenagers to donate blood as part of a scheme to bill the state for phony health tests.

The suspects were accused of child endangerment as authorities served search warrants at the homes and offices of lab workers suspected of participating in the scam. Officials said the investigation was continuing.

Investigators allege that the suspects persuaded high school students to sell their blood, which the labs then used to create bogus blood-test results. The labs stated that the blood came from patients participating in a state-sponsored family-planning program, then collected insurance payments from the state, authorities said.

Larry Malm, a chief investigator for the state Department of Health Services, said operators of five labs in the Compton and Los Angeles area were “manipulating kids to generate revenue.”

“Our biggest concern is the care of these kids,” Malm said. “There are several fears here: Who knows what kinds of needles were used? Were the tests done in a shabby manner? Who’s to know what happened, because their parents weren’t there.”

State health officials said they are not sure exactly how many teens gave blood or how much they were paid. Christine Sanchez, director of communications for the Compton Unified School District, said the district knew of the involvement of as many as five students. She said the district is also investigating the allegations -- specifically, how the students were recruited.

A source close to the investigation said the school district became aware of the scheme when investigating truancy problems with some of the donors. School officials then tipped off health officials, the source said.

The scheme allegedly involved a Medi-Cal program designed to improve access for low-income men and women to family-planning services and reduce unintended pregnancies, a source said.

It’s the latest in a string of law enforcement actions designed to crack down on Medi-Cal fraud.

Created in 1965, the $27-billion Medi-Cal program is being defrauded of more than $1 billion a year, by some estimates. Those losses coincide with state and federal government deficits and a proposal by Gov. Gray Davis to trim $167 million from the program.

Sharon Ryzak, a spokeswoman for the state Department of Health Services, declined to name the suspects or the labs, saying the information would jeopardize the continuing investigation.

The Los Angeles Police Department and Los Angeles County Sheriff’s Department were involved in Tuesday’s arrests, which were led by Los Angeles County’s Health Authority Law Enforcement Task Force.

A spokesman for the American Red Cross Southern California Blood Region in Los Angeles said donors must be at least 17 years old to give a standard pint of blood.

Taking donations from anyone younger than 17 “raises too many questions about responsibility,” said a Red Cross spokesman, Khalid Patterson. “By 17, the body is more stable.”