2 hospital executives indicted in alleged fraud scheme

Two hospital executives have been indicted for allegedly paying homeless people for unnecessary medical treatment as part of an ongoing investigation into a scheme to bilk government health programs out of millions of dollars.

Robert Bourseau, 74, who was chairman of City of Angels Medical Center, was arrested at his Los Angeles home Friday by federal investigators. Dante Nicholson, the hospital’s former senior vice president, is scheduled to appear before a federal judge next month.

Among other things, the men are accused of conspiring to commit healthcare fraud and taking illegal kickbacks as part of a scheme to defraud Medicare and Medi-Cal, said Vince Farhat, assistant U.S. attorney.

Dr. Rudra Sabaratnam, who also ran City of Angels, was arrested last year and pleaded guilty to paying a recruiter $500,000 to find people on skid row with Medicare or Medi-Cal cards and take them to the hospital. As part of his plea, Sabaratnam agreed to pay $4.1 million in restitution to Medicare and Medi-Cal. He is scheduled to be sentenced later this year and could face 10 years in prison.

Intercare Health Systems, the company through which Sabaratnam and Bourseau ran City of Angels, was also named in the 12-count indictment unsealed Friday. Authorities allege that Bourseau, Nicholson and others cheated the government out of millions of dollars from August 2004 to October 2007 as homeless patients -- often drug-addicted or mentally ill -- were brought to City of Angels and two other local hospitals and given unnecessary treatment in exchange for small amounts of money.