Rudra Sabaratnam loses bid to recover $400,000 bail money
July 10 - California (Brentwood) resident Dr. Rudra Sabaratnam, currently serving a jail term for defrauding the US federal government in an elaborate healthcare scheme involving Medicare and Medical lost his bid on July 5 to prevent the government from acquiring the $400000 bail money paid in cash to secure his release in August 2008.
In August 2010, Sabaratnam (67), the former chief executive officer of City of Angels Medical Center, was sentenced to two years in federal prison and three years supervised release for paying illegal kickbacks for referrals of patients who were recruited from among the homeless in downtown’s “Skid Row” district. In addition, Judge George H. King ordered Sabaratnam to pay more than $4.1 million in restitution to the Medicare and Medi-Cal programs. At the sentencing hearing, Judge King said the scheme that Sabaratnam participated in was a “very serious crime” and that Sabaratnam had shown a “longstanding disrespect for the law.”
In addition to the criminal case, the US government also secured a $15,688,585 False Claims Act (‘FCA’) judgment against Sabaratnam and his business partner Robert Bourseau, and their single employee corporations, Navatkuda, Inc. and RIB Medical Management, Inc. The FCA judgment followed a bench trial in which the Southern District Court found that Sabaratnam and his co-defendants had repeatedly violated the FCA by causing false statements to be submitted to the Federal Medicare Program through their ownership and operation of a hospital in Chula Vista, California.
According to court documents, the United States Attorney’s Office for the Southern District of California in trying to find and secure monies Sabaratnam was ordered to pay have had to deal with ‘a constantly shifting maze of over 20 entities’ he and his partner Bourseau may have been affiliated with.
Sabaratnam’s bail in the criminal case, originally set at $700,000, was eventually paid with a $400,000 cashier’s check remitted by “an entity known as ‘Hellman Hospital, LLC’ and and an appearance bond in the amount of $300,000 backed by an affidavit of surety with full justification and deeding of property. It was subsequently discovered that Sabaratnam had made ‘multiple misrepresentations’ to the court regarding his relationship with Hellman where he actually had a 50% ownership interest.
At the time of the bail payment, the $15.8 m judgment was already outstanding but Sabaratnam made representations to the Court that he had more than adequate assets to satisfy that FCA judgment. However, US authorities say that Sabaratnam has failed to pay back the monies ‘fraudulently taken from taxpayers’ and that despite the government’s continuing collection efforts, the current outstanding balance on the FCA judgment, including interest, is in excess of $18,770,000.
On July 1, 2009, Sabaratnam filed with the Court a notice of assignment of the $400,000 cash bail deposit, seeking to assign it to his attorneys, Crowell & Moring, LLP. When the government filed a motion, in January of this year, to deny the assignment, Sabaratnam advanced a new position that he had no personal ownership interest in the cash bail deposit, but that Secured Equity Investment Partners, L.P (SEIP) which had a 50% interest in Hellman was the owner of the cash bail.
On July 5, 2011, the US District Court Central District overruled Sabaratnam’s request and granted the government’s motion to have the $400,000 cash bail applied to the payment of the restitution.
Until the time of his arrest, Sabaratnam and his wife Mufthiha lived in a $5 million mansion in the exclusive Brentwood neighborhood (where Governor Arnold Schwarzenneger and wife Maria Schriver also owned a home).
Sabaratnam started serving his two-year prison term on January 6, 2011.
This article may be reprinted only with full credit to: Sri Lanka-USA Update
Sri Lankan doctor exploited Skidrow
Dr. Rudra Sabaratnam and his partner Bourseau pleaded guilty in 2010 to accusations that they recruited homeless individuals in the Skid Row district of Downtown Los Angeles for unnecessary medical treatments, then fraudulently billed the Medicare and Medi-Cal systems. Estill Mitts was the third partner in the scam. He was the owner of a skid row-based recruiting storefront facility that picked up and dropped the homeless men.
The elaborate scheme came to light in 2006 when LAPD officers witnessed the unusual sight of an ambulance dropping homeless people off in Skid row. An investigation would reveal that the homeless people were being exploited to defraud Medicare and Medi-Cal.
Dr. Rudra Sabaratnam was an owner and the chief executive of City of Angels Medical Center, where homeless patients recruited from Skidrow were brought for sham treatments for which the US government was billed millions.