California surgical center classified plastic surgery as ‘medically necessary’ in fraud scheme

A California woman pleaded guilty to running a California surgical center that billed plastic surgery procedures like nose jobs and tummy tucks as “medically necessary” — swindling insurance companies and others out of millions of dollars in the process.

Linda Morrow, 69, pleaded guilty to one count of conspiracy to commit health care fraud and one count of contempt of court, the U.S. Attorney’s Office for the Central District of California announced on Friday.

Prosecutors said Morrow intended to defraud insurance companies and others out of millions of dollars as the executive director for The Morrow Institute, where plastic surgery procedures were classified as “medically necessary,” despite the fact that they were not.

Morrow, whose husband, David Morrow, allegedly also participated in the business, had declarations and “testimonial letters” that included inaccurate statements signed by clients in an effort to demonstrate to insurance companies that procedures had been necessary for their patients, court documents said, according to the U.S. Attorney’s Office.

The insurance companies impacted by the scheme included Cigna Health Insurance, Anthem Blue Cross, Aetna and Blue Shield of California. Court documents note that claims were also filed against the California Highway Patrol, two school districts and the city of Palm Springs.

“Morrow admitted that the scheme attempted to bilk insurance companies out of between $25 million and $65 million,” according to the U.S. Attorney’s Office.

“Morrow also admitted in court today that she fled the United States to avoid prosecution and failed to appear in court as ordered. In addition to helping move $4 million from domestic bank accounts to accounts in Israel, Morrow used a fraudulent Mexican passport to enter Israel and a fraudulent Guatemalan passport while living there,” the U.S. Attorney’s Office add. “Morrow also admitted that while she was living as a fugitive, she applied for Israeli citizenship using a fraudulent identity.”

Morrow faces a statutory 20-year maximum sentence with sentencing set for July 1.

“This will close out a chapter in her life,” Kate Corrigan, Morrow’s lawyer, said in a statement regarding her client pleading guilty. “She looks forward to completing her case and is hopeful to receive a reasonable sentence.”

— Updated Feb. 5 at 10:18 p.m.