Before landing in the Orange County Jail, they were remodeling a $3.2 million mansion — with “jetliner” views of the Pacific Ocean, Santa Monica mountains and downtown Los Angeles; complete with lap pool and wine cellar — high in the hills of Brentwood.
They had high-priced cars. Expensive purses and jewelry. Eclectic art. Bars of silver and gold.
But the lifestyle enjoyed by Dr. Randy Rosen, girlfriend Liza Vismanos and their two children was built on the backs of often-desperate drug users eager to make a buck however they could — even if it meant enduring unnecessary surgeries, getting unnecessary lab tests and receiving unnecessary injections for inflated prices, according to Orange County prosecutors.
Rosen ran Wellness Wave, a surgical center in Beverly Hills, and Vismanos owned Lotus Laboratories, a toxicology lab in Los Alamitos. Over the course of just a few years, they billed health insurance companies $676 million for medical procedures and tests and collected $52 million in reimbursements, according to court documents that paint a picture of unrepentant greed and callous disregard for human suffering.
A slice of the money they brought was used to pay so-called “body brokers,” also known in the rehab industry as “junkie hunters” — usually recovering users who recruited other addicts for unneeded medical procedures. Those recruiters got kickbacks of some $12 million for their troubles, according to prosecutors.
And a smaller slice of the money went to the users themselves, as recompense for the use of their insurance cards and their bodies. Some got just a few hundred dollars, often withdrawn from ATMs after the procedures were complete. Others got $2,500 or more.
“The procedure takes me less than 5 minutes. So on an hourly that would be about 120k. Lol,” Rosen wrote a text message to one of his body brokers, according to court records.
In another exchange, Rosen wrote of billing $18,400 for a single injection on a single patient, and how he’d get another $10,000 for an MRI that was never performed. “I guess I did an MRI but he didn’t really have any findings.-Lol”
Rosen and Vismanos have been charged with dozens of felony counts of insurance fraud and related crimes. They have pleaded not guilty. Vismanos posted a $100,000 bail bond on July 15 and was released; Rosen remains in the Orange County Jail.
A disheveled Rosen sat in the jury box at his preliminary hearing of Monday, July 20, black glasses perched crookedly atop his white face mask, unruly salt-and-pepper stubble blanketing his cheeks. Beneath his orange jail uniform, a chain snaked around his waist. His handcuffs were attached.
That image of the mighty doctor brought low is small comfort to parents like Debbie Berry of Ashland, Missouri, who wants to make sure Rosen never practices medicine again.
“My first question was, ‘Is he going to be charged with manslaughter?’ ” asked Berry, whose son Brennen died with a naltrexone implant inside him in February 2018. Two months earlier, Rosen billed $59,000 to Berry’s insurance for the procedure.
Naltrexone binds to the brain’s opioid receptors, blunting an opioid high. It’s designed to be part of a comprehensive program to address addiction, not as a cure in and of itself. But prosecutors say that’s not how Rosen used it. Instead, they say, he performed as many as 72 procedures in a single day, with the quickest surgery lasting just one minute.
“Paying for patients turns the patients into a commodity and treats them as ATM machines. The doctor ends up treating the patient as a way to make money instead of treating the patients’ best interests,” prosecutors said.
Berry learned that her son was paid $1,000 to get the implant.
“To me, if you give an addict something like that, they’re just going to do more to get the buzz,” Berry said. “My son thought he had that security blanket in him, that it would save him. And it didn’t.”
Brennen Berry died after using heroin laced with fentanyl in 2018. He was 22.
Rosen’s attorneys declined comment on the case, and did not respond to requests for comment on assertions he should face more serious charges.
In the wake of the Southern California News Group’s disturbing probe of fraud and death on the “Rehab Riviera,” Orange County District Attorney insurance fraud investigators Todd Franssen and Domingo Cabrera began probing addiction recovery schemes in 2018. It didn’t take long to find a group of body brokers trolling Orange County sober living homes, offering cold, hard cash to recovering addicts with good insurance.
Jeffrey Koelsch of Oklahoma City was one of those lured in. He came to California for treatment and moved into a sober living home, where the house manager hooked him up with “Lizardo,” one of Rosen’s brokers. Koelsch soon went to Beverly Hills for the surgery and was paid $400, prosecutors said.
Kari Sollenberger was lured in as well. She was paid $1,200 for getting the implant and agreeing to complain of back pain to justify a cortisone injection. Her insurance company was billed about $87,000, prosecutors said.
A big break for investigators apparently came when Josiah Shafer, one of Rosen’s body brokers, was granted immunity in exchange for his cooperation. Investigators downloaded Shafer’s cell phone, providing a trove of detail that included surreptitious audio recordings and thousands of text messages, prosecutors said.
Shafer worked with Rosen from April 2017 through October 2018. He said Rosen knew patients were paid and actually encouraged brokers to pay even more because another facility — SoberLife, where similar charges were soon levied — was outbidding them.
The workflow was pretty simple, according to court documents. Shafer and other brokers took photos of a prospective patient’s ID and insurance card. Wellness Wave staff determined if insurance was likely to pay. If so, surgery was scheduled. Though the naltrexone implant could be done as a simple outpatient procedure — costing as little as $4,000, including pre-care and followup care — Rosen required them to undergo riskier general anesthesia, and billed for tens of thousands of dollars.
“The purpose of this scheme was to collect as much money as possible, not to care for the patient,” prosecutors said. “As is clear, there are no medical personnel or doctors involved in this process; it almost entirely consists of recovering addicts recruiting other addicts to undergo this procedure for money.”
To avoid the appearance of a doctor paying large amounts of money directly to recovering addicts, the brokers formed various businesses. Rosen paid those entities based on the number of patients referred and the cut of insurance proceeds everyone had agreed to on the “back end,” which could be as high as 25%.
“We have a great thing going and we don’t want to mess things up with something stupid. We are flying nicely under the radar,” Rosen said in a text on Aug. 20, 2017, according to court documents.
But by the end of 2018, word had gotten out that Shafer was talking to authorities. “Rosen will literally have him killed,” a broker texted. In later exchanges, prosecutors say Rosen wrote: “better he dies than gets arrested,” “why won’t he just die” and “hopefully he will go on a bender and that will be it.”
Addiction medicine specialists say that the risk of a patient overdosing after a naltrexone implant is real.
Users seeking a high may take opiates despite the implant, and won’t feel the euphoria because naltrexone is already bound to the brain’s opioid receptors. So they do more and more, unable to gauge how much is in their system, until there’s so much in the system they stop breathing.
Opioid users suddenly cut off from the drug of choice might also start experimenting with new drugs, which carries other risks. That’s one reason why comprehensive follow-up care — medical and behavioral — is so vital in managing addiction, experts said.
DA Investigator Franssen will testify that Rosen’s patients never received follow-up care, prosecutors said. And Berry, Brennen’s mother, feels certain that lack of follow-up played a role in her son’s overdose death, and in the deaths of many others.
“We thought we were doing the right thing by sending our child to another state for treatment,” Berry said. “Then you have these people who don’t care about any part of another human; this person who spent years going to school, taking an oath to heal and protect people….” her voice trailed off.
“He helped bury children. He should be held accountable.”
Hard to prove
From the prosecution standpoint, insurance fraud offers the cleanest path to conviction on a case like this, legal experts said. Trying to forge a causal link between implants and later overdoses could be difficult: Patients typically sign consent forms, whether they understand them or not.
“Historically in the United States, we’ve been very slow to use criminal law tools in order to pursue justice involving doctors who have harmed people,” said Michele Bratcher Goodwin, Chancellor’s Professor of Law at UC Irvine and founding director of the Center for Biotechnology and Global Health Policy.
Doctors and even drug companies also tend to be lionized: “They’d never do anything to intentionally harm patients” was a refrain she heard often back in 2010, as opioid prescriptions, and abuse, were raging.
And when the people harmed are at the bottom rungs of society — drug users, as here, or poor Black men with syphilis, as in the infamous Tuskegee experiment — the law doesn’t seem able to keep up, Goodwin said.
“We have not been engaging in that space of human exploitation, that Frankensteinian, profit-driven trafficking of people’s bodies,” she said.
“If a pimp or a john was doing it, we’d know how to prosecute.”
But sometimes such prosecutions happen. Michael Mastromarino, a former dental surgeon nicknamed “the Body Snatcher,” built a multi-million dollar business buying dead bodies from funeral homes and selling bones, organs and tissue to medical companies without the families’ consent. Some of the dead had cancer or HIV — diseases that would prohibit such donations — but Mastromarino forged paperwork so he could profit nonetheless.
“It’s not exactly obvious what to charge someone with in a case like that,” said Goodwin. “But a plucky DA was able to find a way.”
Mastromarino pleaded guilty in 2008 to numerous charges of enterprise corruption, reckless endangerment and body stealing. He was sentenced to 15 to 30 years in prison.
“A crusading, courageous DA could take that on,” Goodwin said. “It could be now.”
Source: Orange County Register