Local doctor indicted in fraud case

A Corona del Mar physician is one of 18 defendants indicted by a federal grand jury in Santa Ana on Wednesday with fraudulently billing Medicare for about $12 million. Paul Arnold Lesser, 68, of Corona del Mar faces two counts of conspiracy, 10 counts of healthcare fraud and two counts of money laundering.

Lessler and other doctors hired marketers to find willing owners and administrators of board and care facilities — which look after the old, the mentally ill and the sick but do not provide medical care, according to the indictment. These marketers would allegedly give kickbacks to those in charge of the facilities, who let them recruit residents for respiratory treatments they may or may not have needed. Recruitment often involved enticing them with candy, soda and doughnuts, according to the indictment. Then doctors paid out checks to their go-betweens for 30% of the money received from Medicare, according to the indictment.

“These marketers are not doing anything, and yet they’re getting 30% of the reimbursement,” said Asst. U.S. Atty. Jeannie Joseph.

The nine doctors involved face a combined 68 counts of fraud, but Joseph said there were “hundreds of these” incidents.

Doctors fraudulently billed Medicare daily or almost daily for treatments they were not supervising and which were performed at the board and care facilities rather than their own offices, all of which is against Medicare rules, according to the indictment.

Medicare paid about $12 million to the doctors for the treatments in question, but the total amount billed works out to about $50 million, Joseph said.

Four other doctors indicted are listed as having been members of the University Pain Specialists Medical Group owned by Lessler, which appears to be defunct but was in Corona del Mar.

The cases are the product of a joint investigation by the FBI, the U.S. Postal Inspection Service and the Criminal Investigation Division of the IRS, Julian said. The investigation stemmed from the conviction of Dr. Aziz F. Awad, 43, of Pasadena, sentenced in September to 15 years in federal prison for healthcare fraud and money laundering.

When contacted by phone on Wednesday, Lessler declined comment. The defendants are scheduled for an arraignment on March 19 at the U.S. District Court in Santa Ana.