Southern California Surgeons Charged in Pacific Hospital Kickback Scheme

Dr. Jeffrey Gross of Newport Beach and Dr. David Payne of Santa Ana have been federally charged with conspiracy and fraud for receiving over $1 million in kickbacks for surgeries and referrals at Pacific Hospital. The indictment alleges that Gross and Payne conspired with marketer Paul Randall, former Pacific Hospital owner Michael Drobot, and Dr. Lokesh Tantuwaya in the kickback scheme. Tantuwaya allegedly received over $3 million in kickbacks for his role. Meanwhile, Randall was already being prosecuted for involvement in another kickback scheme at Tri-City Regional Medical Center.

Payne and Gross are free on $50,000 bail, while Tantuwaya is free on $200,000 bail. Other defendants will appear in court later this month to determine the status of restitution payment. Affected carriers and patients have demanded $181 million in restitutions from the accused, although prosecutors can only currently prove about $12 million in losses.