Four face prison in med fraud

Greg Tuttle

Wednesday, May 3, 2000 | 11 a.m.

A Beverly Hills doctor and an employee of MGM Grand hotel-casino in Las Vegas are among four people now facing time in a federal prison for filing false medical insurance claims for breast implant and other cosmetic surgeries.

Sophia Dao Stack, 51, of Las Vegas, pleaded guilty Wednesday morning in U.S. District Court to conspiracy to commit health insurance fraud. She faces up to 14 months in prison and is scheduled to be sentenced Sept. 11.

On Tuesday Suzi Alter, 44 of Moreno Valley, Calif., pleaded guilty in federal court to obstructing an investigation. She is scheduled to be sentenced Dec. 4 and faces up to a year in prison.

Federal prosecutors said Alter told a MGM Grand employee to lie to the FBI about her involvement in the scheme to illegally bill the casino's insurance company for cosmetic surgery.

Joan Heubsch, 46, also pleaded guilty Tuesday in federal court. She is scheduled to be sentenced Sept. 11 and faces up to six months in prison on a charge of conspiracy to commit health insurance fraud.

Heubsch is the only MGM Grand employee to be charged in the case, but FBI spokesman Joseph Dickey said more charges could be filed against others involved in the scheme.

Prosecutors said Heubsch knew her cosmetic surgery was falsely billed as a medical necessity when she paid $3,000 to Stack to arrange the procedure in 1997. MGM's insurance company, Mutual of Omaha, later paid $6,377 to the medical center operated by Alter for Heubsch's surgery.

Dr. Lee Newman, 60, of Beverly Hills, Calif., pleaded guilty in federal court last month to obstruction and conspiracy in connection with the case. He is scheduled to be sentenced in August.

Newman performed the cosmetic surgeries at Alter's medical center, prosecutors said. According to court records, Mutual of Omaha paid Newman more than $21,500 for cosmetic surgeries falsely billed as other medical procedures between February 1996 and March 1998.

All four agreed to waive their right to a grand jury indictment and plead guilty in exchange for the dismissal of several charges. They are also cooperating with the FBI as it continues to investigate the case, Dickey said, and have been released on their own recognizance until sentencing.

Assistant United States Attorney Marc Garber declined to detail how the scheme was carried out. Insurance companies only cover the cost of "medically necessary" procedures, and cosmetic or elective surgeries such as breast implants are not covered, he said.

Dickey said the MGM Grand is not involved in the scheme and alerted the FBI to the case. The MGM provides its employees a health insurance plan through Mutual of Omaha.

An MGM official did not return calls seeking comment.

According to court records, MGM employees paid Stack and other surgery brokers between $750 and $2,500 to arrange the cosmetic surgeries in California. Alter then paid Stack and others a kickback of about $500 for each patient.