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Former hospital owner sentenced in multimillion-dollar kickback scheme

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A federal judge on Friday sentenced the former owner of a California hospital to 63 months in prison for leading a 15-year fraud scheme involving millions in illegal kickbacks paid to medical professionals in exchange for referring thousands of workers compensation patients for spinal surgeries.

Investigators found that from at least 1997 through 2013, Michael Drobot, who owned Pacific Hospital in Long Beach, California, ran a scheme in which he billed more than $500 million in fraudulent surgeries, much of which was paid by the California workers compensation system, according to a statement released Friday by the U.S. attorney’s office for the Central District of California in Los Angeles.

Mr. Drobot, 73, of Corona Del Mar, California, pleaded guilty in 2014 to charges of conspiracy and paying illegal kickbacks, admitting that he orchestrated a wide-ranging fraud scheme in which “(t)housands of patients received surgeries at Pacific Hospital not knowing that (Mr. Drobot) bribed their physician to perform their surgery at Pacific Hospital,” prosecutors wrote in a sentencing memorandum filed with the court, which was included in the statement. It said Mr. Drobot “was motivated by greed and ultimately profited millions of dollars through the scheme.”

The scheme involved dozens of doctors, chiropractors and others who were paid illegal kickbacks, according to the statement.

“The patients believed that they were receiving conflict-free medical advice when, in fact, (Mr. Drobot) illegally incentivized their physician to perform the surgery at Pacific Hospital,” the statement said.