Investigation into COVID-19 Contracts in Orange County

News Summary

Orange County is facing a serious investigation regarding financial misconduct linked to COVID-19 business contracts awarded under former Supervisor Andrew Do. The scrutiny centers around contracts with companies including 360 Clinic, which was awarded a multimillion-dollar agreement without competitive bidding. Internal communications reveal concerns about transparency and the legitimacy of the contracting process, along with allegations of executive billing fraud. The ongoing investigation raises significant questions about the integrity of public contracts and taxpayer accountability amidst a public health crisis.

Orange County is currently the focus of an investigation into financial misconduct linked to COVID-19 business contracts involving several companies owned by brothers Larry and Gary Nguyen. The scrutiny has arisen due to allegations surrounding the legitimacy and processes of contracts awarded under the direction of former Supervisor Andrew Do.

Among the contracts scrutinized is a multimillion-dollar agreement with 360 Clinic. This clinic was established just days before being awarded the contract to conduct COVID-19 testing for Orange County. The contract was executed without competitive bidding or approval from the Board of Supervisors, and it was rushed through using pandemic-era emergency rules, raising serious concerns about transparency and fairness in the contracting process.

Initially, the contract with 360 Clinic was projected to cost the county nothing; however, Orange County taxpayers ended up paying over $3.4 million for claims that 360 Clinic could not collect. This increased financial liability stemmed from problematic interactions between 360 Clinic and the insurance provider Blue Shield of California, prompting a heightened investigation into the clinic’s billing methods.

Internal communications from the county’s Health Care Agency reveal that personnel expressed worries over payments made to 360 Clinic. There were indications that contracts were being awarded based on personal networks rather than through due diligence, which prompted additional scrutiny into the selection process.

Additionally, a whistleblower lawsuit filed by a former employee of 360 Clinic details allegations of executive billing fraud. This legal action also includes claims of retaliation faced by the whistleblower for advocating for accountability regarding the clinic’s financial practices.

Concerns extend beyond 360 Clinic, as a separate property acquisition deal involving CalOptima has also drawn attention. CalOptima planned to purchase a property in Tustin for $29.5 million, which was 60% higher than what Larry Nguyen’s company had paid for the site less than a year prior. Although the deal ultimately did not close, CalOptima’s decision to forfeit $450,000 in escrow funds related to the transaction adds another layer of complexity to the investigation.

Compounding these issues, Supervisor Andrew Do has pled guilty to federal bribery charges linked to the contracts awarded during his tenure and is currently awaiting sentencing. His involvement raises further questions about the integrity of the contracting processes within Orange County.

Further investigation has revealed that 360 Clinic failed to utilize a federal program designed to reimburse healthcare providers for uninsured COVID testing, which raises unsettling questions regarding operational practices and the management of COVID-19 funds. In light of these findings, CalOptima and other county agencies are conducting probes into the numerous contracts awarded by Do, which number in the thousands.

This investigation highlights significant procedural flaws in the awarding of pandemic-related contracts. It suggests there may have been improper influence and a troubling lack of transparency within county agencies responsible for managing public health and financial integrity during a crisis.

The ongoing scrutiny of these business dealings underscores the importance of accountability in public contracts, particularly those involving considerable sums of taxpayer dollars during a public health emergency. As the investigation unfolds, further details may emerge regarding the full extent of the alleged financial misconduct in Orange County.

Deeper Dive: News & Info About This Topic

HERE Resources

Orange County Investigates Health Contract Fraud Allegations
California Cancels Leave Buy-Back Program for State Workers

Additional Resources

• LAist: Orange County Investigation into COVID-19 Contracts
• MSN: Orange County Supervisors Approve Contracts for Seniors Meals Programs
• ABC7: Orange County Sues Nonprofit Linked to Supervisor’s Daughter
• OC Register: Steps to Strengthen County Contract Oversight
• Los Angeles Times: Orange County Demands Return of Millions from Nonprofit
• Wikipedia: Orange County, California
• Google Search: Orange County COVID-19 Contracts
• Google Scholar: Orange County Financial Misconduct
• Encyclopedia Britannica: Orange County
• Google News: Orange County Investigation