In one of the biggest insurance fraud investigations ever in California, authorities said Wednesday that they have served search warrants over the last two days at more than 150 locations statewide that are linked to a network of workers' compensation medical clinics.
One of the main targets of the investigation is a Los Angeles area doctor, James W. Eisenberg, who heads a medical chain known alternately as Amerimed Medical Corp. and Ameri-medical Corp. The other chief target is a longtime Eisenberg associate named Michael J. Lightman, a Rancho Palos Verdes businessman who is listed as president of another medical firm, Accurate Imaging.
Both Eisenberg and Lightman came under state scrutiny in the 1970s when authorities shut down a chain of weight-loss clinics they helped operate.
To seize records for their current investigation, state, federal and local authorities on Tuesday and Wednesday raided the offices of lawyers, doctors, psychologists and other health care specialists believed to be tied to Amerimed and Accurate Imaging. On Tuesday alone, investigators said, they carted off three 18-foot-long truckloads of documents. No arrests were made, however, and authorities said the investigation could continue for more than a year due to its complexity.
The Amerimed under investigation is not related to AmeriMed Health Plan, a Pasadena-based health maintenance organization run by AmeriMed Medical Corp. that recently was acquired and absorbed by Foundation Health of Sacramento.
At a news conference Wednesday in Los Angeles, officials provided only scant details, saying they were barred from commenting further because the probe is continuing and the affidavit for the search warrants was sealed by a Superior Court judge. Still, law enforcement authorities--who have been criticized by some business interests for moving too slowly to curb workers' compensation fraud--characterized their investigation as a major assault on the problem.
"We're going after major players here, among the biggest," said Gil Garcetti, Los Angeles County district attorney.
In addition, sources confirmed that the investigation parallels a federal racketeering lawsuit filed last year by Zenith Insurance Co. against Eisenberg, Lightman, Amerimed, lawyer Robert Yale Libott of Rolling Hills Estates and related business entities.
The suit, still pending, alleges that Amerimed and other medical practices run jointly by Eisenberg and Lightman fraudulently inflated their bills to insurers by well over $10 million a year.
It accuses the medical practices, which are concentrated in Southern California, of committing fraud by, among other things, charging for procedures that never were provided to patients and by double-billing and triple-billing for a single medical service.
Zenith charged that Libott contributed to the alleged racketeering scheme by setting up law offices near the Eisenberg-Lightman clinics to recruit people to file fraudulent workers' compensation claims and to help prepare the bogus claims.
Lawyers for Eisenberg and Lightman either could not be reached or declined to comment. According to the California Medical Board, Eisenberg was licensed to practice in California in 1972.
Libott's lawyer, William Fahey, said Wednesday that he has been led to believe that his client is only a witness in the fraud investigation.
Fahey said Libott is cooperating with authorities, who took computer records and files from Libott's offices as part of the raid.
One of Libott's offices, the Civic Law Center in Santa Ana, operates out of the same building on North Broadway as the Eisenberg-owned Anchor Medical Center. Fahey said he did not know of any connection between the operations, but a Medical Board investigator said agents were trying to determine whether there was any evidence of illegal fee splitting between the offices. State law bars doctors and lawyers from paying each other for referring patients or clients.
Only limited records were available late Wednesday concerning the weight-loss clinics that Eisenberg and Lightman were involved in during the 1970s. However, documents show that the state medical board won an injunction to halt the operations of the chain, which went under the name American Weight Control Clinics. The board said clinics lacked required licenses.
Authorities said the more than 150 locations they raided this week include 63 sites in Los Angeles County, along with 15 in Riverside County, 12 in Orange County and nine in San Diego County.
Other counties with five or more locations raided were Ventura, Fresno, Santa Barbara, San Bernardino and Alameda.
The investigation was launched 16 months ago by the state Insurance Department. Other agencies heavily involved are the Los Angeles County district attorney's office and the FBI, which alone assigned 22 agents to the case.
Authorities said the Eisenberg-Lightman investigation is unrelated to another major workers' compensation probe they launched last year into Primedex Corp., a Culver City-based company that also runs a chain of medical clinics.
According to Zenith's lawsuit, Eisenberg and Lightman's medical enterprise also operated under such names as the Eleventh Ave. Medical Group in Inglewood, East L.A. County Medical Group in Los Angeles, Valley Ridge Medical Group in Van Nuys, Sand Point Medical Group in Santa Ana and the Bay Medical Group in San Diego.
The searches were conducted by more than 150 state, federal and local officials under the supervision of 36 special masters from the California Bar Assn., who were assigned to ensure that confidential medical records were not disclosed.