Prosecutors refile charges in $150-million fraud case
It was touted as a mega-bust: the successful end to a five-year investigation aimed at dismantling one of the largest insurance fraud schemes in California history.
More than a dozen people associated with Frontline Medical Associates were accused in 2015 of taking part in a $150-million scam that involved unnecessary surgeries by non-surgeons, doling out kickbacks for illegal patient referrals and fraudulently billing insurance companies.
But over the 18 months that followed, a judge dismissed most of the 132 counts laid out in two indictments. The most serious charges — for aggravated mayhem, carrying a potential life sentence — were dropped for a lack of evidence.
Now, prosecutors are taking a second stab at the case after acknowledging flaws in how they presented it to a grand jury. At their request, Los Angeles County Superior Court Judge Kathleen Kennedy Thursday threw out pending charges in the two indictments against 13 defendants, except for two suspects who are fugitives.
Prosecutors immediately brought new charges against a dozen people, filing three separate criminal complaints listing 194 counts, including aggravated mayhem, money laundering, insurance fraud and unlawful patient referrals. An 82-year-old physician who was accused of overbilling insurance companies was not charged in the new complaint; prosecutors noted that he is suffering serious health issues.
Prosecutors allege that Dr. Munir Uwaydah, the certified orthopedic surgeon patients believed would conduct procedures, instead let a physician’s assistant perform surgeries. The scheme left nearly two dozen patients with lasting scars.
“People were harmed, physically harmed, by the conduct of the conspirators,” said Los Angeles County Deputy Dist. Atty. Dayan Mathai. “They were invasively cut, scarred and suffered emotional damage.”
Uwaydah, the accused ringleader who prosecutors initially said had been captured in Germany, remains at large. They believe he is living in Lebanon.
Defense attorneys called the move to drop and then refile charges a transparent stunt to dodge an evidentiary hearing scheduled for next week. They claim that prosecutors and investigators improperly reviewed thousands of records, including communications between defendants and their attorneys, protected by attorney-client privilege.
More than 50 prosecutors – including Mathai – and district attorney’s investigators had been subpoenaed to testify, defense attorneys said.
Defense attorneys alleged in a court filing that some documents that prosecutors and others reviewed were used to bolster the criminal case.
In one example, an investigator developed leads based on correspondence between Uwaydah and one of his attorneys, leading to an undercover operation a year later, according to the filing. The investigator’s testimony before a grand jury led to three of the original counts.
The violation of the privilege could justify throwing county prosecutors off the case, defense attorneys said.
“They want to basically say, ‘We don’t like the way this game is going so we’re turning the board over,’” said Benjamin Gluck, an attorney representing Uwaydah’s business partner, Paul Turley. “These people are going to be under the spotlight. That’s not a comfortable place to be. But you know what? The case has been going along — they made their bed, they’re going to have to sleep in it.”
It’s unclear if and when the evidentiary hearing will move forward — and in front of which judge.
Kennedy, who ordered the hearing last month, said that the allegations the defense raised aren’t going away.
“All those issues are still going to be there,” she said.
Follow me on Twitter @AleneTchek
Start your day right
Sign up for Essential California for news, features and recommendations from the L.A. Times and beyond in your inbox six days a week.
You may occasionally receive promotional content from the Los Angeles Times.