Man Admits Recruiting Homeless for Medical Fraud

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A man pleaded guilty to recruiting and paying homeless people to pose as phony hospital patients in a scheme that billed government programs millions of dollars in unnecessary health services.

Estill Mitts, 64, admitted Thursday in U.S. District Court to running an assessment center called the 7th Street Christian Day Center in the gritty Skid Row area of Los Angeles. There, homeless people were recruited and paid for undergoing medical care at the City of Angels hospital.

The hospital then charged millions of dollars to federally subsidized health care benefit programs for unnecessary treatments or procedures that were not performed, prosecutors said. It also allegedly paid referral fees to Mitts through two shell companies.

The hospital was run by Mitts' co-defendant, Dr. Rudra Sabaratnam, whose trial begins Sept. 30.

Charges were filed against both after police spotted five patients being dumped on Skid Row in October 2006 and determined they were recruited for the scheme.

Mitts pleaded guilty to conspiracy to commit health care fraud, money laundering and tax evasion and faces up to 25 years in prison. He also could be fined $600,000 and asked to pay more than $11 million in restitution.

Mitts is scheduled to be sentenced Dec. 15.