A Los Angeles businessman has agreed to serve six years in state
prison after pleading no contest to five felony counts in a scheme
that involved Medi-Cal fraud, identity theft, money laundering and
conspiracy, according to the Franchise Tax Board (FTB).
In a plea arrangement with state prosecutors on Monday, Benjamin
E. Provo, 44, owner of Esquire Auto, a Los Angeles-based car dealership,
pleaded no contest to three counts of filing false health care claims,
one count of grand theft and one count of filing a false state income
tax return.
At the time of his arraignment last July, Provo pleaded not guilty
to 21 counts in connection with the theft of more than $1.3 million
from Medi-Cal. Provo was identified by state investigators as the
ringleader of the scheme. Nine co-defendants previously pled guilty
pursuant to cooperation agreements with the prosecution.
The complaint charged that physicians' names, medical licenses and
patients' information were illegally purchased by Provo from Los
Angeles area hospital employees.
The complaint also said that Provo submitted phony applications
for Medi-Cal provider numbers under the doctors' names, and subsequently
submitted bogus claims to Medi-Cal stating that doctors had treated
the patients. After Medi-Cal paid the claims and mailed payments
to storefront addresses, Provo cashed the checks with the help of
co-conspirators at local banks. Money from the checks was then laundered
at an unlicensed check cashier and convenience store in Los Angeles.
The Medi-Cal payments were not reported on Provo's 1998 or 1999
tax returns. All income is taxable, including income from illegal
activities.
The fraud was detected by the Department of Health Services, which
took notice when three different doctors had provider numbers with
the same address and unusually high claim amounts.
Los Angeles County Superior Court Judge Tomson T. Ong presided over
the plea arrangement. Formal sentencing is set for July 23 at 8:30
a.m. in Department 1 at the long Beach Courthouse.
This was a joint investigation with the Department of Justice, Department
of Health Services and the FTB.
