A Rancho Mirage woman who served as executive director of a cosmetic surgery center has been indicted on fraud and identity theft charges, adding to allegations that she and her husband billed insurance companies for more than $50 million in cosmetic surgeries they claimed were medically necessary, prosecutors said Tuesday.
Linda Morrow, 64, was named in a 31-count superseding indictment that added three mail fraud charges, three counts of identity theft and three counts of aggravated identity theft. If convicted, she could be ordered to forfeit more than $20 million gained in the alleged scheme, according to prosecutors.
The indictment includes 24 mail fraud counts, each of which carries a statutory maximum penalty of 20 years in federal prison. The six identity theft charges and a separate count of failure to report a felony would add more than 50 years to the sentence, should she be convicted, prosecutors said.
She is scheduled for arraignment in U.S. District Court in Santa Ana on Monday.
Her husband, Dr. David Morrow, 71, pleaded guilty in March to conspiracy to commit mail fraud and filing a false tax return. He is scheduled for sentencing Dec. 2, and could face as much as 23 years in federal prison.
The Morrows are accused of submitting bills for more than $50 million for surgeries performed at their clinic, The Morrow Institute, according to the U.S. Attorney’s Office.
Patients were told that the surgeries would be paid through their union or PPO health insurance plans, while insurance companies were told that the procedures were medically necessary, prosecutors said.
The indictment alleges that test results and medical records were fabricated so that “tummy tucks” were billed as hernia repair or abdominal reconstruction surgeries, rhinoplasties were billed as deviated septum repair surgeries, and breast lifts and augments were billed as tuberous breast deformity.
Companies were billed for as much as $100,000 for a single procedure, and as much as $700,000 for multiple procedures, according to prosecutors.
In addition, some patients who underwent multiple surgeries “suffered severe medical complications,” according to the indictment.
“As part of the scheme charged in this indictment, the defendant allegedly used the names and signatures of patients without their knowledge to obtain payments for procedures that were not covered by insurance,” said United States Attorney Eileen M. Decker. “Health care fraud schemes that defraud insurance companies in this manner victimize both the insurers and the insured who are forced to pay higher premiums. This case seeks to punish the defendants and to deprive them of their illegal profits.”
Among the insurance companies that were allegedly fraudulently billed were Anthem Blue Cross, Blue Cross/Blue Shield of California, Blue Cross/Blue Shield of Massachusetts and Regional Employer/Employee Partnership for Benefits.
Some of the insurance companies refused to pay for patients who were employed by public entities. According to prosecutors, the Morrows then made claims against those entities, demanding more than $15 million from the California Highway Patrol, Desert Sands Unified School District, Palm Springs Unified School District and the city of Palm Springs.
“Linda Morrow’s crimes not only victimized insurance companies, but the public entities that ultimately had to foot the bill to pay the outrageous billings, which include the California Highway Patrol and multiple public school districts,” said Deirdre Fike, assistant director in charge of the FBI’s Los Angeles Field Office.