The unsealed indictment lays out 883 counts of insurance fraud against Dr. Sim Hoffman. The radiologist owns a nerve-testing center called Advanced Professional Imaging and Better Sleeping Medical Center in Buena Park.
"It's a scheme involving over $17 million in overbilling for unnecessary and never-performed procedures," said Orange County District Attorney Tony Rackauckas.
Also facing charges is Dr. Thomas Heric, a neurologist who wrote sleep study reports for Hoffman.
"Heric's so-called 'studying' of the patients involved using a made-up formula entirely of his own creation is not recognized in any medical community," said Rackauckas.
Authorities say Heric's license was suspended for 60 days in 2008 for a Medicare and Medi-Cal fraud conviction. During that time, Hoffman hired Beverly Mitchell. She's accused of submitting fraudulent billings.
Also allegedly involved in the scheme is Louis Santillan, hired as a bill-payment collector.
Authorities started investigating in 2008 after receiving evidence from Zenith Insurance alleging that Better Sleeping Medical Center was overbilling for procedures that weren't needed.
Investigators suspect more than 1,200 patients, mostly blue-collar and Spanish-speaking, were referred to the defendants through workers-compensation claims. They never received proper treatment while the defendants were billed for procedures.
The state insurance commissioner says the alleged scheme not only cost patients, but also employers.
"Medical provider fraud against insurance company results in higher premiums for legitimate employers throughout the state of California," said California Insurance Commissioner Dave Jones.
Hoffman and Mitchell each face a maximum of more than 800 years in prison if convicted.
