Staff Reports

Orange – A federal jury has convicted two local women in connection with a scheme to defraud union and private health insurance programs by submitting bills for more than $71 million – and receiving over $50 million in payments – for medically unnecessary procedures on patients who received free or discounted cosmetic surgeries.

According to the Assistant United States Attorney’s Office, on Thurs., Mar. 5, Theresa Fisher, 45, of Tustin, was found guilty on five counts of mail fraud; and Lindsay Hardgraves, 30, of San Pedro, was found guilty on two counts of mail fraud.

The evidence presented during a six-day trial showed that members of the scheme lured insured “patients” to a surgery center in Orange, with promises that they could use their union or PPO health insurance plans to pay for cosmetic surgeries, which are generally not covered by insurance. The surgery center was known at various times as Princess Cosmetic Surgery, Vista Surgical Center, and Empire Surgical Center.

Marketers such as Hardgraves referred “patients” to the surgery center, where they were told they could receive free or discounted cosmetic surgeries if they underwent multiple, medically unnecessary procedures that would be billed to their union or PPO health care benefit program. Fisher was a consultant at the surgery center who scheduled procedures after telling the “patients” about the free cosmetic procedures they could receive, and coaching them to fabricate or exaggerate symptoms so that their medical procedures would be covered by their insurance.

The unnecessary procedures typically performed on the “patients” were endoscopies, colonoscopies and cystoscopies. Once the health care benefit program paid the claims, the patients were given free or discounted cosmetic surgeries, including “tummy tucks,” breast augmentations and liposuction. In some cases, the surgery center simply billed cosmetic procedures (such as tummy tucks) as if they were medically necessary procedures (such as hernia surgeries).

A large number of the fraudulent claims were submitted to the International Longshore and Warehouse Union and Operating Engineers Union health insurance plans. Other victim insurers included Aetna and Anthem.

Fisher and Hardgraves are scheduled to be sentenced by United States District Judge, Josephine L. Staton, on May 29. At sentencing, each defendant faces a statutory maximum sentence of 20 years in federal prison for each count of mail fraud.