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Medi-Cal investigation includes Burbank

Robert Shaffer and Leslie Simmons

BURBANK -- A broad investigation into Medi--Cal fraud in the Los

Angeles area has led to the arrest of at least one Glendale man who ran a

Burbank medical supply store, a spokeswoman for the U.S. attorney’s


office in Sacramento said.

Charges have been filed against 64 business, most in the San Fernando

Valley, accusing them of defrauding California’s health-care system for

the poor.


Martiros Agazarian of Glendale was charged June 17 with defrauding

Medi-Cal of $125,000 and pleaded guilty Aug. 9, said Patty Pontello, a

spokeswoman for the U.S. attorney’s office. He is scheduled to be

sentenced Dec. 20.

According to a complaint filed against Agazarian in U.S. District

Court in Sacramento, the medical supply business falsely billed the

state’s Medi-Cal program $125,000 between September 1997 and March 1998.

The complaint said the wholesale distributor agreed to provide


invoices for merchandise not delivered to the business in exchange for

between 25% to 50 % of the take.

Agazarian enticed Medi-Cal customers to bring their prescriptions to

his business by giving them gifts, the complaint alleges. He would then

fill only half of the items listed on the prescription and bill the the

Medi-Cal program for the whole prescription.

Agazarian’s business, Magnolia Medical Supply at 2911 W. Magnolia

Blvd., was closed Tuesday.


Pontello said while many of those involved in the fraud are Armenian,

the charges are not racially motivated.

Vicken Papazian, executive director of the western region of the

Armenian National Committee, said he hopes investigators didn’t look for

Armenian surnames when choosing who to investigate.

“Everyone is accountable to the law, but I am concerned,” he said.

“Hopefully, they are just concerns and nothing else.”

Pontello said the law has been colorblind.

“The first person charged was named Vuong. The second was Atkinson,”

she said.

In total, the government has accused 78 companies of stealing more

than $35 million through false claims.

Assemblyman Scott Wildman (D-Burbank), who has made a name for himself

fighting government waste on a state government committee, said the

amount of fraud could be unprecedented. Wildman said he has not seen the

details of the investigation.

“But frankly, if someone is guilty of fraud, they need to be

prosecuted, whoever they are,” he said.

Wildman said the state needs stricter enforcement and prosecution of

existing laws. “This money should be going to take care of people,” he


State Sen. Adam Schiff (D-Burbank), whose office sparked the

investigation after a complaint of too many medical supply companies in

Eagle Rock, said lawmakers will likely work to tighten regulations on

medical supply providers next year. Schiff once prosecuted fraud cases

when he was an assistant U.S. attorney.

“My experience there demonstrated whenever there is a significant

amount of money spent without oversight, the potential for theft is

there,” he said.

Tom Tamm, an employee at Be Well Medical Supplies on North Hollywood

Way, said he’s noticed an increasing number of medical supply companies

opening in Burbank.

“In the past year, I’ve seen three or four along Magnolia Boulevard

but they are always closed,” Tamm said. “I thought they were dealing with

nursing homes because no one was ever in there.”

Tamm said his employer, who has not been charged in the investigation,

has been in Burbank since 1995.

“It affects legitimate businesses as well, which is horrible,” he said

of the fraud charges.