A Los Angeles man has entered a plea deal with federal prosecutors admitting he paid homeless people to fake illnesses and be admitted to three for-profit hospitals in a conspiracy to defraud Medicare and Medicaid. The agreement calls for Estill Mitts, 64, to cooperate fully with prosecutors in their investigation, which led FBI agents to raid the implicated hospitals Aug. 6 and arrest Mitts and Rudra Sabaratnam, an owner and chief executive officer of one of the hospitals, 180-bed City of Angels Medical Center.
Mitts concedes that from 2004 to 2007 he operated the 7th Street Christian Day Center in the area known as Skid Row and handed out production money to stringers to round up homeless people, who were then given phony assessments at the center and referred to the City of Angels and two other hospitals. Meanwhile, companies owned by Mitts entered sham consulting contracts with the hospitals in order to disguise kickbacks for the recruited patients, he concedes in the agreement. Prosecutors said the fraud deprived state and federal health programs of at least $11.8 million, and Mitts is obligated to pay restitution.
Mitts is expected to formally enter the pleas in U.S. District Court in Los Angeles Sept. 10. The U.S. attorneys office promises to recommend a reduced sentence if Mitts holds up his end. Guidelines call for him to spend as long as 25 years in prison. Sabaratnam, also 64, has denied involvement in the alleged scheme and is set to stand trial Sept. 30. -- by Gregg Blesch