2 Held in Alleged Surgery Fraud

A brother and sister living in Houston were arrested Thursday on suspicion of recruiting healthy patients from around the country for an Orange County medical clinic that allegedly performed $90 million in unneeded surgeries.

Johnny Ngoc Trang Huynh, 46, and Thuy Huynh, 47, who moved from Huntington Beach six months ago, were arrested at their homes.

The brother-and-sister team, authorities allege, acted as recruiters -- called “cappers” -- who drummed up $9 million in business for the now-defunct Unity Outpatient Surgery Center in Buena Park.

Johnny Huynh is being held on $900,000 bail; his sister on $1-million bail. The pair will be extradited to Orange County to face charges of insurance fraud, grand theft, capping and tax evasion, said Deputy Dist. Atty. Rick Welsh.

The arrests marked the latest development in the “rent-a-patient” case in which people were solicited to have unneeded surgeries for such conditions as sweaty palms and hemorrhoids.

In exchange, authorities contend, the patients were rewarded with cash, vacations and cosmetic surgeries.

Three people who operated the clinic were arrested in July 2004. They have since pleaded guilty. Five others arrested on suspicion of recruiting patients have pleaded not guilty.

Authorities say the brother and sister arrested Thursday had profited handsomely by locating willing patients. They said Johnny Huynh made $450,000 in eight months by finding 80 patients in seven states. His sister did even better, they said, locating 120 patients in 18 states and earning $650,000.

Combined, the siblings billed nearly $9 million to insurers, which paid out $2 million before investigators broke up the operation, officials said.

“These two arrests show that we are closing in on the people involved in this sick scheme,” said Orange County Dist. Atty. Tony Rackauckas.

The arrests come three years into an ongoing investigation by the district attorney’s office in conjunction with state insurance and tax officials. Investigators were tipped off by insurance companies and employers who received unusually large medical bills.

The so-called cappers arranged transportation, scheduled surgeries and coached the “patients” on what to say to their doctors, authorities said.

Officials said the scam targeted people nationwide whose employers provided insurance that does not require surgeries to be pre-approved.

The patients, nearly all Asian, would be flown to Orange County to undergo surgeries, sometimes several procedures in one day, officials said.

If convicted, Johnny Huynh and his sister could face prison terms of up to 28 and 30 years respectively. Officials said more arrests are expected.