Arraignments Postponed in Insurance Fraud Case

Seventeen doctors and employees of nine area health clinics who face charges of insurance fraud and conspiracy to commit insurance fraud had their arraignments postponed Wednesday in Orange County Superior Court.

Superior Court Judge Michael Brenner rescheduled arraignment for Feb. 23 for the 17 defendants, all of whom were released on their own recognizance. Their lawyers refused to comment after the brief court appearance.

After reviewing an 18-month investigation by the Orange County district attorney’s office, a grand jury indicted 20 employees, including seven doctors, from eight clinics in Santa Ana and one clinic in Irvine for allegedly doctoring $59,583 in medical bills.

Three of those indicted have not been arrested although warrants have been issued, said Deputy Dist. Atty. Michael Lupinski.

The undercover probe, one of the longest and most unusual in the prosecuting agency’s history, involved setting up a “dummy” law firm that claimed to represent clients injured in car accidents. To attract dishonest clinics, investigators rented office space and posed as a fledgling personal injury firm, then solicited work from the clinics. The sting operation, which began in April, 1992, focused on the nine clinics.

Clinic officials sent false bills to the firm. In theory, the firm would forward payment from insurance companies back to the clinics, authorities said. No money was paid out during the operation.