Some Representative Press Reports
Charged in $7-Million Medi-Cal Fraud
04, 1991|STEVE PADILLA, TIMES STAFF
The owner of a
pharmaceutical supply company in Valencia has been charged with
defrauding Medi-Cal out of $7.2 million through phony billings, one of
the largest such cases in the agency's history, the state attorney
general's office said Thursday.
Charges of grand theft and
filing false claims were brought in Los Angeles Superior Court against
Roy Pacia, owner of Bruce Pharmacal Inc., on Dec. 28, the day that
agents of the state Department of Justice raided the company and three
houses owned by Pacia in Valencia, authorities said.
Pacia, however, may have
fled the country.
Cowan, an investigator with the attorney general's Los Angeles office,
said it was one of the largest cases of Medi-Cal fraud encountered by
the agency. No other people were named in the criminal complaint, but
the investigation is continuing, Cowan
Authorities had hoped to
continue their investigation into the new year but hurriedly sought
arrest warrants on Dec. 28 when they learned Pacia might be preparing to
flee, Cowan said.
But by the time
investigators and Los Angeles County sheriff's deputies arrived, Pacia
had disappeared, Cowan said.
Investigators suspect he may have gone to the Philippines, he said.
Cowan said an informant
told officials of billing irregularities at the pharmacy, which was
licensed to distribute pharmaceuticals.
Between January, 1987, and
November, 1990, Cowan said, the
company defrauded the state through overbilling, billing the state for
products not prescribed by physicians and charging Medi-Cal for products
not covered by the state health program.
Meanwhile, the U.S.
attorney general's office on Dec. 19 filed four civil lawsuits to force
Pacia to forfeit the company's office and the three houses, valued at
$3.4 million, which the lawsuits allege were purchased with funds
obtained through the fraud. Half of Medi-Cal funds come from the federal
On Dec. 30, 1988, Pacia
purchased the company's headquarters at 25356 Rye Canyon Road for $2.5
million. According to the lawsuits, Pacia paid part of the amount with
$897,369 in checks drawn on company accounts containing funds derived
almost entirely from Medi-Cal payments.
The government also has
seized houses purchased by Pacia at 24001 Sag Harbor Court, 26038
Tourelle Place and 25582 Novela Way, according to the lawsuits.
Charged With Bilking Medi-Cal Can't Be Prosecuted
Investigation: A businessman accused of stealing $22 million returns to
Spain, which does not extradite its citizens to the U.S.
1990|JACK CHEEVERS, TIMES STAFF WRITER
A Spanish businessman
accused of stealing $22 million from the state's Medi-Cal program cannot
be prosecuted here because he fled to his country before authorities
raided his Diamond Bar home, government fraud investigators said
Faustino Pascual Crespo
flew to Spain, which does not extradite its citizens to the United
States, after fraudulently billing Medi-Cal for hundreds of thousands of
medical items for incontinent patients, authorities said. The state
attorney general charged him with grand theft last week in Los Angeles.
Investigators said the
money represents the biggest theft by an individual in the history of
Medi-Cal, which pays for medical care for poor Californians.
Crespo, 47, was
investigated as part of a statewide probe of unscrupulous medical
suppliers suspected of stealing at least $200 million from Medi-Cal
through fraudulent bills for adult diapers, rubber bedsheets and similar
Authorities have filed
charges against about 100 people and closed 60 medical supply firms in
an effort to stop the practice, which is concentrated in the Los Angeles
Authorities charge that
Crespo, using a series of temporary business visas, flew to California
from Spain at least six times during three years to commit the fraud.
During his visits, Crespo allegedly filed fraudulent claims and returned
later to cash the state checks he received, officials said.
According to Medi-Cal
investigators, Crespo set up four medical supply companies in Los
Angeles and Orange counties from 1987 to 1989. The firms billed Medi-Cal
a total of $24.4 million, virtually all of it for incontinence supplies,
investigators said. The firms were identified as Neighborhood Medical
Supply in Cypress; Argus Enterprises in Santa Fe Springs; Lahke Home
Care Inc. in Pomona and Meditech Technology Corp. in Sun Valley.
The vast majority of the
supplies never were delivered, said
Dennis Cowan, the state's chief Medi-Cal fraud investigator in Los
Crespo's attorney, Dennis
Warren, said state authorities "exaggerated the $22-million figure" for
the purposes of getting a higher bail on Crespo.
"They have substantial
evidence of deliveries of millions of dollars of products to individual
beneficiaries," he said.
Crespo purchased Medi-Cal
stickers from independent "sticker bandits" who get them from Medi-Cal
recipients at nursing homes, mobile home parks and government-subsidized
housing projects, Cowan said.
Medi-Cal recipients are
issued five stickers a month, which they exchange for doctor's visits
and other medical services. The stickers must be attached to bills sent
to Medi-Cal for payment.
In some cases, bandits give
Medi-Cal recipients small bags of toiletries in exchange for the
stickers, which cannot legally be sold or traded. In other instances,
bandits impersonate Medi-Cal officials and steal stickers,
Crespo's businesses and Diamond Bar townhouse March 2 but were told by
his 21-year-old son that Crespo had left for the airport the night
before, court papers said. Crespo lives in Marbella, on the Spanish
As long as Crespo remains
in Spain, U.S. authorities cannot seize him and bring him to trial, said
Assistant Atty. Gen. Steven V. Adler, who heads state investigations of
Crespo may have decided to
flee after he was notified that Medi-Cal was auditing him, said M.
Teresa Franco, a supervising Medi-Cal fraud investigator in Los Angeles.
But Warren said Crespo left
the United States not to escape authorities but to take a "pre-planned
business trip" to Europe, where he owns several companies that
manufacture or sell medical supplies.
Since Crespo's departure,
authorities have seized $2.7 million in cash and property belonging to
him in California, including an 11-unit condominium complex under
construction in Pomona. But Crespo managed to transfer more than $6.6
million to Spain from bank accounts in California, court documents said.
Crespo also is the target
of a $250,000 fraud investigation by officials of the federal Medicare
health program for the elderly, according to court records.
- Eroding Justice: Psychiatry's Corruption of
Law (page 27)