County Hires Law Firm for FBI Probe

Ventura County has retained a top Los Angeles law firm to represent county leaders in an FBI criminal investigation into whether the county defrauded the government by submitting improper Medicare claims for nearly a decade, officials said Wednesday.

The $100,000 expense would be on top of the $25.5 million that the county has incurred in legal fees, accounting costs and other penalties associated with improper Medicare billing and the failed 1998 merger of the county’s mental health and social services agency.

A spokeswoman at O’Melveny & Myers confirmed Wednesday that the international law firm has agreed to represent the county in the investigation being conducted by the FBI on behalf of the U.S. attorney’s office.

But the law firm has not signed a contract with the county and has yet to be paid, county Auditor-Controller Tom Mahon said.

“The [$100,000] transfer went to county counsel’s budget unit and no money has been expended against it yet,” Mahon said. “We have no record of a contract yet.”

David Nesbitt, FBI agent in charge of the Ventura office, said the investigation is continuing. He declined to identify the county officials who have been questioned in the probe.

In an internal memo dated May 3, Chief Assistant County Counsel Frank Sieh requested Mahon transfer the money from a $500,000 county legal fund to the county counsel’s budget.

The memo states that Hooper and Lundy, the firm that represented the county in the federal government’s civil lawsuit, “have been replaced by O’Melveny & Myers for the criminal matter.”

Sieh said the Board of Supervisors and the county Health Care Agency requested hiring the new law firm because “a different legal issue was being dealt with.”

O’Melveny & Myers is “well-respected. They’re well-known and they’re competent counsel,” Sieh said.

County officials declined to say why a private law firm had to be retained when no charges are pending.

The criminal investigation began last fall after the county settled the civil lawsuit by agreeing to repay $15.3 million over five years for improper Medicare billing practices since 1990. Investigators contended that bills were submitted under doctors’ names for services conducted by lower-paid health-care workers.

Since general fund money is set aside each year by the board to pay attorneys’ fees, the recent expense doesn’t require board approval, officials said.

“The county is always being sued, or suing,” Mahon said. “So when these things come along that are not covered in departmental budgets then these [funds] can be used.”