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United States v. Intercare Health Systems

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION


May 7, 2010

UNITED STATES OF AMERICA AND THE STATE OF CALIFORNIA PLAINTIFFS,
v.
INTERCARE HEALTH SYSTEMS, INC, A CALIFORNIA CORPORATION, FORMERLY D.B.A. CITY OF ANGELS MEDICAL CENTER; ROBERT BOURSEAU; AND RUDRA SABARATNAM DEFENDANTS.

CONSENT JUDGMENT BETWEEN UNITED STATES OF AMERICA, THE STATE OF CALIFORNIA AND INTERCARE HEALTH SYSTEMS, INC.

EDMUND G. BROWN, JR. Attorney General of the State of California DANE GILLETTE Chief Assistant Attorney General MARK GEIGER Director BRIAN V. FRANKEL Supervising Deputy Attorney General State Bar No. 116802

Office of the Attorney General 1455 Frazee Road, Suite315 San Diego, CA 92108 Telephone: (619) 688-6065 Facsimile: (619) 688-4200 Email: brian.frankel@doj.ca.gov Attorneys for State of California

CONSENT JUDGMENT

IT IS HEREBY ORDERED, ADJUDGED and DECREED, pursuant to and in accordance with the Stipulation for Entry of Consent Judgment entered into by and between plaintiff the United States of America, acting on behalf of its agency, the United States Department of Health and Human Services, and plaintiff the State of California (collectively "plaintiffs"), and defendant Intercare Health Systems, Inc. ("Intercare" or "defendant")(plaintiffs and defendant are collectively referred to as "the parties"), as follows:

Findings

1. The Court has subject matter jurisdiction over this action pursuant to 31 U.S.C. § 3730(a) and (b) and 28 U.S.C. §§ 1331 and 1345. Jurisdiction over all state law claims alleged in this action is proper under 31 U.S.C. § 3732(b). This Court has supplemental jurisdiction over all state law claims under 28 U.S.C. § 1367.

2. Defendant has acknowledged and accepted service of the Summons and Complaint. The Court has personal jurisdiction over defendant.

3. Venue is proper in this District pursuant to 31 U.S.C. § 3732(a) and 28 U.S.C. § 1391(b), because defendant is located and transacts business in this District, and a substantial part of the events giving rise to the claims brought in this action occurred in this District.

4. Intercare is a California corporation that, from 2004 through November 18, 2008, owned and operated a for-profit acute care hospital in Los Angeles known as the City of Angels Medical Center ("City of Angels"). City of Angels was at all times relevant hereto a participating hospital in the Medicare and MediCal programs; its Medicare provider number, at all times relevant hereto, was 05-0725; its Medi-Cal provider number, at all times relevant hereto, was HSC30725F.

5. Defendant Robert Bourseau ("Bourseau") is a resident of the State of California. At all times relevant hereto, the 50% shareholder of Defendant Intercare was the G & B Trust and/or the Gladys Bourseau Living Trust ("GBLT"), and Bourseau was an officer and director of Intercare.

6. Defendant Dr. S. Rudra Sabaratnam ("Sabaratnam") is a resident of the State of California. Sabaratnam was a licensed physician and a managing officer at all times relevant hereto, and from 2004 to June 14, 2007, was the Chief Executive Officer, and one of the two owners through Secured Equity Partners, L.P., of Intercare.

7. On December 12, 2008, Sabaratnam pled guilty to two counts of Payment of Illegal Remuneration for Patient Referrals (42 U.S.C. § 1320a-7b(b)(2)(A))(the Anti-Kickback Statute) in connection with the facts alleged in the Complaint filed in this action. (U.S.D.C.-- C.D. CA Case No. CR-08-00904).

8. On June 16, 2009, Bourseau pled guilty to two counts of Payment of Illegal Remuneration for Patient Referrals (42 U.S.C. § 1320a-7b(b)(2)(A))(the Anti-Kickback Statute) in connection with the facts alleged in the Complaint filed in this action. (U.S.D.C.-- C.D. CA Case No. CR-09-00087).

9. On January 14, 2010, this Court entered Consent Judgments against Bourseau and Sabaratnam, jointly and severally for $8,457,769 in favor of the United States and $1,542,231 in favor of the State of California together with post-judgment interest for activities that occurred when they were owners and principals of Intercare and that were alleged in the Complaint.

10. On April 22, 2010, the United States Bankruptcy Court for the Central District of California, Los Angeles Division, in the case In re Intercare Health Systems, No. 2:09-bk-29121-SB, entered the Order attached hereto as Exhibit 1, allowing plaintiffs an allowed, undisputed, general, unsecured claim against Intercare for $10,000,000 in complete satisfaction of the plaintiffs claims against Intercare in the bankruptcy action.

Judgment

11. Judgment in favor of the United States against defendant Intercare, jointly and severally with defendants Bourseau and Sabaratnam, on the United States' federal False Claims Act allegations contained in the Complaint in the amount of $8,457,769, shall be and hereby is ordered and entered.

12. Judgment in favor of the State of California against defendant Intercare, jointly and severally with defendants Bourseau and Sabaratnam, on the State of California's False Claims Act allegations contained in the Complaint in the amount of $1,542,231, shall be and hereby is ordered and entered.

13. Nothing in this Consent Judgment disturbs or changes in any way the Consent Judgments entered against Robert Bourseau and Rudra Sabaratnam, or in any way exonerates or releases Robert Bourseau or Rudra Sabaratnam from their obligations to satisfy the Consent Judgments entered against them by this Court.

IT IS SO ORDERED.

20100507

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