California U.S. Attorney: Fugitive Returned to U.S. to Face Federal Charges in $50M Health Care Fraud Scam Run Out of Coachella Valley Surgery Center

SANTA ANA, California, July 2 -- The office of the U.S. Attorney for Central District of California issued the following news release:

A Rancho Mirage woman who faces federal charges related to a scheme that fraudulently billed insurance companies $50 million for "medically necessary" cosmetic surgeries has been returned the United States after fleeing to Israel two years ago.

Linda Morrow, 67, who fled the United States after being named in a 31-count federal grand jury indictment, arrived in Southern California on Monday morning after being deported by Israel, which had determined that she had entered that nation on a fraudulent Mexican passport.

Linda Morrow appeared in United States District Court in Santa Ana on Tuesday afternoon and entered a not guilty plea to a separate grand jury indictment that charges her with contempt of court for fleeing while free on bond. During that hearing, she was ordered detained and a trial date in the contempt case was scheduled for August 27. She will make another court appearance later this month to discuss the status of the pending health care fraud case.

Linda Morrow and her husband, David Morrow, 74, were arrested in Israel on June 16. David Morrow, who pleaded guilty in 2016 in the health care fraud case and was sentenced in absentia to 20 years in federal prison, is pending extradition proceedings in Israel. David Morrow also faces contempt of court charges for fleeing while he was pending sentencing.

Linda Morrow, who was the executive director of The Morrow Institute (TMI) in Rancho Mirage, is charged with participating in a scheme to defraud health insurance companies by submitting bills for more than $50 million for procedures that were claimed as "medically necessary" - but in fact were cosmetic procedures such as "tummy tucks," "nose jobs," breast augmentations and vaginal rejuvenation. The indictment outlines a scheme in which patients were lured to TMI with promises that cosmetic procedures would be paid for by their union or PPO health insurance plans. The indictment further alleges that some patients who underwent multiple surgeries at TMI suffered severe medical complications from the procedures.

The victim health insurance companies included Anthem Blue Cross, Blue Cross/Blue Shield of California, Blue Cross/Blue Shield of Massachusetts, Regional Employer/Employee Partnership for Benefits, formerly known as Riverside Employer/Employee Partnership (REEP) and Cigna. When insurance companies refused to pay for the cosmetic procedures for patients who happened to be employed by public entities such as school districts, TMI made formal claims against those public entities, demanding payments totaling more than $15 million from the California Highway Patrol, the Desert Sands Unified School District, the Palm Springs Unified School District and the City of Palm Springs.

The indictment naming Linda Morrow with conspiracy, 23 counts of mail fraud, six identity theft charges, and one count of misprision of a felony for allegedly failing to report the health care fraud scheme to authorities. If she were to be convicted, Linda Morrow would face a potential sentence of more than 500 years in federal prison.

An indictment contains allegations that a defendant has committed a crime. A defendant is presumed to be innocent until and unless proven guilty in court.

The investigation into the Morrows and TMI was conducted by the FBI, IRS Criminal Investigation and the California Department of Insurance. The FBI's Legal Attache in Tel Aviv and the Israeli National Police provided considerable assistance relative to the capture of Linda and David Morrow. The United States Marshals Service handled the transportation of Linda Morrow from Israel.

The case is being prosecuted by Assistant United States Attorney Charles Pell of the Santa Ana Branch Office.