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Search warrants issued for billing companies

April 10, 2003

Six Tijuana doctors and two San Diego County medical billing companies were snared yesterday in an FBI sting investigation of alleged cross-border insurance fraud.

All six of the doctors were arrested, and search warrants were issued for the billing operations, Med-Bill Services of Chula Vista and My-MD Coding of San Ysidro.

The 31/2-year undercover investigation, dubbed Operation Golden Tooth, is part of an ongoing probe into fraudulent health insurance claims filed with U.S. insurance companies by doctors who practice in Mexico.

Insurance fraud has long flourished along the border, a magnet for Americans who cross into Tijuana in search of cheaper medical care or medical services – such as cosmetic surgery or "alternative" cancer treatments – that aren't usually covered by U.S. insurance plans.

Since most U.S. insurance companies don't reimburse for non-emergency medical care outside the country, some Mexican doctors file false claims through third-party insurance billing firms that they hire or set up in San Diego County.

Bradlee Godshall, acting supervisory special agent for the Federal Bureau of Investigation, said the fraudulent claims cost the U.S. insurance industry millions of dollars each year and contribute to the rising premiums paid by U.S. companies and employees.

"It's a tremendous scam," said Godshall.

For the most part, the doctors arrested in the sting were involved in cosmetic surgery and are accused of either fraudulently billing their services as emergency care or filing claims on "phantom" patients.

Godshall estimated that collectively the doctors made at least $500,000 through fraudulent billing during the course of the investigation, which was aided by several participating U.S. regulatory agencies and Mexico's Agencia Federal de Investigacion.

Those arrested in the sting operation include Dr. Carlos Alessandrini, Dr. Carlos Jaime Herrera and Dr. Severo Rios Ornelas, all Mexican citizens who also have U.S. legal permanent resident status. Alessandrini and Herrera both live in Chula Vista, while Ornelas lives in Tijuana.

Also arrested were Dr. Elia Judith Cerecer, Dr. Ricardo Vega Montiel and Dr. José Sergio Verboonen Sotelo, all Mexican citizens living in Tijuana.

Verboonen advertises a weight-loss surgical procedure known as gastric banding over the Internet. The English-language Web site, apparently aimed at U.S. patients, notes that his Tijuana medical office is near San Diego, making it "convenient for American patients."

In February, the newspaper Frontera identified Verboonen as president of Tijuana's College of General Surgeons.

Another of the doctors, Carlos Alessandrini, operates a Tijuana facility called Hospital Bajanor near the border in Colonia Libertad.

Dr. Juan José Camacho Romo, head of the 1,000-member Tijuana Medical College, said insurance fraud is not a common practice in the Baja California medical community.

"I don't doubt that there could be people here without scruples, but frankly they can be found anywhere," said Camacho. "The truth is that most of the time doctors act honestly."

Search warrants were also issued yesterday for the two San Diego County medical billing companies. Med-Bill Services is owned by Obdulia Soto, and My-MD Coding is owned by Marina Castanon; both live in San Diego County, and neither could be reached for comment.

During the FBI investigation, an undercover agent posed as a private investigator hired by U.S. insurance companies to investigate claims filed on behalf of Mexican doctors.

The undercover agent was given copies of suspected fraudulent claims by five insurance companies that agreed to take part in the investigation, including Aetna U.S. HealthCare, Blue Cross of California and Blue Shield of California.

After interviewing patients *****ceived care in Mexico and verifying that the medical claims were fraudulent, the agent approached the doctors, pretending to be a corrupt investigator. The agent offered to take a financial kickback in return for recommending to the insurance companies that the claims be paid.

Doctors who agreed to go along with the scheme were also given the opportunity to submit claims for fictitious or "phantom" patients, using patient identification and insurance policy information that the undercover agent claimed to have obtained during other foreign insurance claim investigations.

The sting follows on the success of a similar FBI investigation in 1997. It resulted in the arrest of 21 people – 13 of them doctors practicing in Mexico – who were accused of submitting false claims to U.S. insurance companies for medical services and equipment they did not provide.

During that investigation, two FBI agents posed as independent insurance brokers and met in the United States with doctors who practiced in Mexico. The doctors were given patient health insurance identification cards and other billing information in exchange for a percentage of the claims paid by the insurance companies.