Doctor Pleads Guilty to Tax Fraud in Skid Row Scheme

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Doctor Pleads Guilty to Tax Fraud in Skid Row Scheme

A La Mirada doctor has pleaded guilty to federal tax charges and admitted participating in a large-scale scheme to defraud Medicare and Medi-Cal. Dr. Ovid Mercene, 61, of La Mirada, pled guilty to subscribing to a false tax return.

Mercene pleaded guilty before United States District Judge R. Gary Klausner, who is scheduled to sentence the defendant on July 21. The case against Mercene is part of an ongoing investigation into the recruitment of Skid Row patients being conducted by the U.S. Department of Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation; IRS-Criminal Investigation; and the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse.

From 2008 and 2012, while Mercene worked at a Los Angeles-area hospital, he admitted patients, the vast majority of whom were homeless, who had been referred from a purported “care consortium.” The patients, many of whom did not require hospitalization, were admitted for the purpose of defrauding taxpayer-funded health programs such as Medicare, Mercene admitted in court today.

Mercene admitted the “patients” after watching them being transported by van from Skid Row to the hospital, where they were often kept on a special floor away from the hospital’s “regular” patients. These “patients” also were given smoking breaks while in the hospital, even though many of them supposedly suffered from respiratory diseases. After a short hospital stay where numerous unnecessary tests were typically performed, Mercene discharged the “patients” to skilled nursing facilities, even though they did not require such care.

Mercene billed Medicare and Medi-Cal more than $1.8 million for medically unnecessary services provided to the Skid Row patients while in the hospital or at a skilled nursing facility. Mercene received nearly $700,000 in cash kickbacks for admitting “patients” to skilled nursing facilities — income he did not report on his tax returns.

The U.S. Attorney’s Office says the case is a significant step in uncovering the scope of the Skid Row recruitment scheme and bringing those responsible to justice. The investigation into the scheme is ongoing, and more arrests are expected in the coming weeks and months.

Dr. Mercene is scheduled to be sentenced on July 21 and faces up to 3 years in prison and a fine of up to $250,000 for his role in the scheme.

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