Southern California Surgeon Sentenced to 30 Months For Kickbacks Scheme

Dr. Daniel Capen, a spinal surgeon in Huntington Beach, CA, was sentenced on Friday to 30 months in federal prison for conspiring to commit honest services fraud. He had received at least $5 million in kickbacks for performing surgeries at Pacific Hospital of Long Beach in a scheme coordinated by former Pacific Hospital owner Michael Drobot, and for referring patients for other medical services. Over the course of 15 years, Dr. Capen accounted for over $140 million of claims from Pacific Hospital to insurers, earning the hospital payments of over $50 million. According to the U.S. Attorney’s Office, the scheme involved over $580 million in fraudulent billings to carriers.

Dr. Capen pleaded guilty in 2018, revealing a structure of arrangements that hid payments through management contracts, consulting fees, dividends, and bonuses. He has been ordered to forfeit $5 million of proceeds from his criminal activities, and pay a fine of $500,000. He is one of 17 defendants charged as a result of the kickback scheme, of whom prosecutors say 10 have been convicted.