Ex-O.C. Hospital Executive Indicted on Fraud Charges

A former Orange County hospital operator who fled to China as creditors accused him of skimming $4 million from his failed company was indicted Friday on charges of bankruptcy fraud and money laundering.

Dan S. Young, who built Affiliated Medical Enterprises Ltd. in Orange into a five-hospital operation, and his live-in companion are charged with stealing about $1.2 million from the estate of the bankrupt company in 1991 and 1992.

The indictment is part of a push by the U.S. attorney’s office in Los Angeles to stem the burgeoning amount of bankruptcy fraud in Southern California, the nation’s leading center for bankruptcy filings.

Young, his companion, Chau Yung, and his daughter, Rebecca Hume, fled in November 1992, just as creditors filed suit alleging that he had embezzled $4 million.

The Chinese-born executive reportedly flew to Beijing, leaving one leased Mercedes-Benz at his home and another at Los Angeles International Airport.

“He is believed to be in the Far East, but we don’t know if he’s in Beijing anymore,” Assistant U.S. Atty. Angela J. Davis said. Authorities also have not been able to locate Hume or Yung, who also is known as Cindy Yung and T.G. Pham.

“He just disappeared,” said Cynthia M. Cohen, a lawyer for creditors and others who sued Young and a group of defendants. “There have been all sorts of stories, including rumors that he had been killed.”

Cohen said she had enough defendants in the case to satisfy her clients. The civil case was settled two years ago against the other defendants under agreements that are confidential.

Young had started Affiliated in 1986 and built it into a network that owned Pacifica Hospital in Huntington Beach and hospitals in Sun Valley, Ojai, Palmdale and Portales, N.M.

He was a well-regarded hospital operator. But in January 1991, his company was $88 million in debt, and he didn’t have the cash flow to pay the debts. The Chapter 11 bankruptcy petition Affiliated filed allowed Young to remain in control while he worked with creditors to reorganize his debts.

But the civil lawsuit and the indictment charge that Young began skimming money from the bankrupt estate, funneling much of it through a company he controlled. He gave associates part of the money and pocketed the rest, according to the court charges.

Chau Yung is accused in the indictment of money laundering for allegedly using $110,635 of the stolen funds to purchase gold bars from a jewelry store.