3 Plead Guilty to Billing for Bogus Surgery

Three people who ran a Buena Park medical clinic have pleaded guilty to bilking insurance companies out of millions of dollars for unnecessary surgeries performed on thousands of patients recruited nationwide.

Under an agreement with prosecutors, Tam Vu Pham, 41, of Fullerton, who operated the Unity Outpatient Surgery Center from June 2002 to October 2003, is expected to be sentenced in Orange County Superior Court to 13 years in state prison, authorities said.

His wife, Huong Thien Ngo, 39, was given a seven-year suspended prison sentence Tuesday and ordered to complete five years’ probation. Her aunt, Lan Nguyen, 49, of Huntington Beach was given a five-year suspended prison sentence and placed on five years’ probation.

Pham is expected to cooperate with authorities investigating the case, said Susan Kang Schroeder, a spokeswoman for the district attorney’s office. The scam is believed to be the biggest of its kind in Orange County history, she said.

“We expect more charges in the future,” Schroeder said, adding that five others already charged in the scheme are scheduled for a preliminary hearing Jan. 17.

Prosecutors allege that the clinic employed a number of recruiters -- called “cappers” -- who traveled to 45 states and the District of Columbia looking for “patients” whose insurance companies did not require preapproval for certain medical procedures.

About 5,000 people, all coached on what symptoms to present, were transported to Orange County and given unnecessary procedures including colonoscopies and surgeries for hemorrhoids, pain management or sweaty palms. Insurance companies were billed $96 million for the procedures and paid out about $15 million in claims, authorities said.

In exchange for cooperating, Schroeder said, these patients received cash -- $300 to $1,000 -- or credit toward inexpensive cosmetic surgeries. The cappers, she said, were paid handsome commissions and the administrators took a cut.

“Some of these medical procedures can be very dangerous,” she said. “This type of fraud is rampant and it hurts the bottom line for every single American. We’re just scratching the surface.”