Lab Operator Accused in $3-Million Insurance Scam

The owner of two Los Angeles medical laboratories was arrested Thursday after being indicted for allegedly using green food coloring to bilk insurance companies of more than $3 million for phony allergy tests, authorities said.

Alberto F. Lopapa, 52, was charged with 18 counts of mail and bankruptcy fraud for allegedly devising a scheme to bill more than 380 insurance companies for thousands of fraudulent allergy tests, said Assistant U.S. Atty. Sharon R. Ellingsen, who is prosecuting the case.

Lopapa operates the Lopapa Institute Inc. at 3435 Wilshire Blvd. and Novo Immune Inc. at 3727 W. 6th St., federal prosecutors said. He and unlicensed employees at Novo Immune used green food coloring to generate test results reported to the insurance companies, the indictment said.

The last step of a legitimate allergy test involves a chemical reaction that produces a color, Ellingsen said. The density of the color is tied to any allergic reaction.

“Instead of getting a color through a chemical reaction, he would put green dye on a plate to get a response,” Ellingsen said. “A spectrometer would then be tricked into reading the green food coloring as an allergy.”

In addition, the testing equipment was electronically tied to the company’s computer in such a way as to generate two billings for each blood sample submitted for testing, the indictment said.

Between May and October, 1987, Lopapa billed insurance companies for $3,272,275, prosecutors said.

The indictment also alleges that Lopapa transferred and concealed more than $249,000 in assets of the Lopapa Institute while the company was in or near bankruptcy.

Each of the counts in the indictment carries a maximum penalty of five years in prison and a $250,000 fine. Lopapa is being held at the Metropolitan Detention Center pending arraignment today. No bail has been set.