ORANGE COUNTY, CA -- Four people were sentenced to between two and six years behind bars Thursday for tax fraud in connection with a $154-million insurance fraud scheme in which the defendants allegedly recruited thousands of people for unnecessary and dangerous surgeries to bilk insurance companies.
It is the largest medical fraud case the nation has ever seen, involving thousands of patients and dozens of insurance companies that were allegedly defrauded.
Dee Francis, 62, was sentenced to six years in prison, while Rosalinda Landon, 67, and Andrew Harnen, 58, each received terms of five years and four months, and 64-year-old Roy Dixon was sentenced to two years and eight months.
Their sentences will likely be served in county jail because of a statewide prison realignment brought about by overcrowding, officials said.
Orange County Superior Court Judge Thomas Goethals gave the defendants credit for time served, which amounts to about four years for Harnen, almost three years for Landon and Francis, and 206 days for Dickson, officials said. Goethals also ordered stiff financial restitution. Landon was ordered to pay back more than $1.1 million, Francis and Harnen both more than $900,000.
Some of those charged created shell corporations, cheated on their taxes or both, according to prosecutors.
Jurors last month convicted the four on a combined 24 tax-fraud counts -- primarily focused on tax evasion and failing to report taxable income. They still face a second trial on allegations of defrauding more than 30 insurance firms across the country with claims for unnecessary medical procedures.
Joining them as a defendant in the secondary phase will be Dr. Mario Rosenberg, 65.
Proceedings on the second phase were scheduled to begin Jan. 3.
According to prosecutors, the ploy involved the recruitment of 2,841 patients from across the country for unnecessary medical tests to defraud insurance companies. The ruse revolved around the Unity Outpatient Surgery Center in Buena Park, but also included two other surgery centers, prosecutors said.
Of the 19 people charged in the case, 14 have pleaded guilty.
The alleged scheme -- which prosecutors claim ran for a number of years and ended in 2003 -- was the brainchild of Tam Vu Pham, one of the owners of Unity.
Pham pleaded guilty in December 2005, was sentenced to 12 years in prison and has since been released.
Goethals chided the defendants for what he construed as a lack of remorse about avoiding taxes at a time when the state is crushed by a lack of revenue.
``You took advantage of the services of the great state of California and you wanted it free,'' Goethals said. ``We all have to pay our fair share.
``I have tried to figure out a reason for your actions, and the only thing I can think of it was a classic case of good, old-fashioned greed,'' the judge said.
- City News Service