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Casino Said To Defraud Insurance Co.

May 4, 2000

LAS VEGAS (AP) _ For two years, several Las Vegas casino waitresses and dealers gave themselves the VIP treatment, getting breast implants and tummy tucks by defrauding their insurance company, investigators say.

Investigators uncovered a scheme in which workers at the MGM Grand and other Las Vegas casinos were recruited to have cosmetic surgery that was billed to their insurance as medically necessary.

``One might say that it’s sort of a slice of Las Vegas Americana,″ federal prosecutor Marc Garber said. ``It’s seems apropos to this city.″

On Wednesday, Sophia Dao Stack, 51, of Anaheim, Calif., became the fourth person to plead guilty in the scheme, admitting to conspiracy. The FBI said she recruited the employees for cosmetic surgery.

Also pleading guilty were a Beverly Hills, Calif., surgeon, the owner of the California clinic where the surgery was done and an MGM worker who was a patient in 1997.

Altogether, the investigation has identified 12 to 16 waitresses, dealers and other employees of the MGM and other casinos as being involved in the scam, said FBI agent Joseph Dickey.

The FBI said the fraud worked like this: Beginning in 1996, Stack and an MGM employee recruited MGM workers to have breast implants, liposuction and tummy tucks at the Moreno Valley Ambulatory Surgical Center in Moreno Valley, Calif.

The cosmetic surgery was not covered by the casino’s health insurance with Mutual of Omaha, but the procedures were fraudulently documented and billed as medically necessary, investigators said.

Stack and the unidentified MGM employee received kickbacks of about $500 per patient from the clinic and referral fees of $750 to $2,500 from each patient.

The FBI said the scam continued until 1998, when either the MGM or Mutual of Omaha began questioning some of the insurance claims.

Dr. Lee Newman, 60, the surgeon who performed some of the operations, pleaded guilty to conspiracy and obstruction and faces up to five years in prison. Clinic owner Suzi Alter, 44, and MGM employee Joan Heubsch, 46, also pleaded guilty and could get six to 14 months in prison.

``It’s perfect for this place,″ Garber said. ``It is a cosmetic city to begin with.″

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