Orange County Investigates Possible Fraud and Mismanagement in Health Contracts

Santa Ana, CA – CalOptima, the Medi-Cal system for Orange County, is currently probing contracts related to businesses owned by brothers Larry and Gary Nguyen, following concerns raised by public and private entities. This investigation is part of a larger scrutiny over potential fraud and mismanagement in health-related contracts during the COVID-19 pandemic.

An employee from 360 Clinic, a company engaged in COVID-19 testing, has filed a whistleblower lawsuit claiming she was terminated for opposing what she described as fraudulent billing practices. This lawsuit alleges that the company was involved in improper billing during its testing operations, hinting at possible significant fraud that could affect taxpayer interests.

Documents obtained through the Public Records Act have revealed troubling details about how taxpayer money was managed during the tenure of former Orange County Supervisor Andrew Do. Do, who recently pleaded guilty to a federal bribery charge, accepted over $500,000 intended for senior feeding programs and is now facing a maximum of five years in prison. His actions have instigated calls among several members of the Board of Supervisors for stricter penalties against him.

The Nguyen brothers’ businesses profited from millions in no-bid contracts with government agencies while Do was in office, with many contracts not subjected to competitive bidding processes that are typically mandated for public funds. One notable contract involved a property deal in Tustin, where Yorba Myrtle LLC, a business owned by the Nguyens, raised alarms due to a significant increase in the sale price in a short timespan. This deal is currently under scrutiny as part of the investigation.

Despite initial assurances that costs for COVID-19 testing would be covered by insurance, Orange County taxpayers ended up footing a bill of $3.4 million to 360 Clinic. As a result of the ongoing investigation into these contracts, important plans by CalOptima to support a healthcare center for Vietnamese-speaking seniors in Little Saigon have been halted. These plans fell through shortly after the whistleblower allegations surfaced, raising questions about transparency and integrity in the management of public health care resources.

Additionally, Hang Nguyen, a state regulator, has been identified as attempting to influence CalOptima board members concerning the aforementioned healthcare center. This has raised further concerns over potential impropriety and led to a referral to law enforcement for examination. Emails reviewed by CalOptima officials suggested inappropriate connections between Hang Nguyen and significant players in healthcare and political spheres, including the Nguyen brothers.

Since Do’s resignation and guilty plea, CalOptima has initiated a reevaluation of all contracts executed during his administration to ensure compliance and accountability. The investigation continues to uncover any additional implications stemming from the dealings of the Nguyen brothers with taxpayer funds amidst allegations of fraud.

A second deal involving a property in Irvine has also attracted attention, as it ultimately collapsed and resulted in Yorba Myrtle LLC collecting a forfeited $450,000 from the county. These unfolding events highlight ongoing concerns regarding the management of taxpayer dollars and the potential for corrupt practices within local government contracts.

As more details emerge from the investigations, the implications for both the county’s oversight of health contracts and the accountability of public officials like Andrew Do and the Nguyen brothers remain critical issues under consideration for Orange County taxpayers.