Dr. K KOd

OC Weekly series leads to federal indictment of celebrated AIDS doctor

Illustration by Matt BorsFollowing an OCWeeklyinvestigation that spanned six stories and two years, the U.S. Attorney indicted a Laguna Beach physician on charges he injected AIDS patients with bogus drugs.

Dr. George Steven Kooshian and his nurse, Virgil Opinion, committed "conspiracy, 25 counts of health-care fraud and three counts of making false statements relating to health-care matters," said Cindy Lozano, a spokesperson for the U.S. Attorney's office.

According to Lozano, an FBI investigation began shortly after OCWeeklypublished the July 2001 article "My Conscience is Killing Me", R. Scott Moxley's first story in the series. That article relied in part on Opinion's 13-page wrongful-termination lawsuit. In the suit, Opinion alleged that Kooshian fired him for complaining about workplace illegalities.

Opinion had agreed to speak with Moxley because, he said, "My conscience has been killing me."

Moxley began his research in May 2001, when Irvine attorney Eric Lampel said he had a client, Virgil Opinion, with a dramatic story. For the next four months, Moxley pored over documents; spoke with legal, accounting and medical experts; and talked at length with federal health officials, as well as current and former Kooshian clients.

But Moxley's greatest challenge was the gay community itself. Beyond the most general denial, Kooshian refused to speak on the record. And others told Moxley, whose investigative work also led to the 2004 arrest of ex-Assistant Sheriff George Jaramillo on public-corruption charges, to back off.
Dr. K. ducks out.
Photo by Jack Gould

 

"You have to understand that Kooshian was—still is, to some extent—huge in the gay community," Moxley says now. "He's warm, rich and bright. He was a fun guy, too, athletic, good-humored and generous. He seemed legitimately to have the trust of the community. He had a good bond. And back then, on AIDS, Kooshian had marketed himself as the AIDS expert, not just in Orange County, but in Southern California. He was like a god.

"So when my first story hit, there were two reactions in the gay community," Moxley recalls. "One was, 'Oh, my God, this is terrible.' And the other was, 'This can't be true.' That latter crowd said I was embarrassing the gay community. My response was that Kooshian was embarrassing himself."

That first story opened with Opinion's account of what the federal indictment calls "'subdosing' patients, that is administering to a patient a dose of medicine that contained less than the prescribed amount of medication that the patient was supposed to receive."

Opinion recalled a gravely ill Costa Mesa man who had come to Kooshian in February 2001, seeking help in his battle with AIDS and anemia from hepatitis C treatments. The patient was in line for a liver transplant; badly fatigued, he hoped to make office visits temporarily unnecessary. He wanted a month's supply of Epogen, an expensive drug that helps replenish critical red blood cells. Kooshian assured the patient he would fill the request, according to Opinion.

But there was a problem.

"We don't have a month's supply of Epogen," Opinion remembers reminding the doctor in front of the patient.

"Yes, we do," Kooshian allegedly replied.

The nurse says he protested again but was ordered to "go prepare the shots."

Opinion, a soft-spoken Filipino immigrant who arrived in the U.S. in the late 1980s after graduating from a Manila medical school, says he reluctantly went to the office's laboratory and prepared 28 syringes.

"Only a few of the shots had a little bit of Epogen. Most of them had none. The patient basically just got saline or water," Opinion told Moxley. "Kooshian knew the patient was getting suboptimal doses, but he didn't care. The bottom line for him was the money. Those shots made him a lot of money. I became even more depressed when that patient told me how appreciative he was of what we were doing for him."

Opinion says he confronted the doctor once more. He claims Kooshian promised to "destroy me and make sure I'd never work in the medical field again" if the nurse revealed the fake injections to the patient or authorities. A few days later, Opinion—suffering stomach cramps, headaches, depression and the early stages of insomnia—quit.

"I couldn't take it anymore," he said. "I didn't like what was happening."

That Epogen episode was merely one in a series of alleged frauds Opinion claims drove him to psychiatric care and the unemployment line. When he spoke with the Weekly,he was on state disability. He alleged Kooshian cheated patients—gave them useless shots of water but billed them for costly drugs—for much of the 11 years they worked together. He said the doctor made "many millions of dollars this way."

"Those shots made him a lot of money," Opinion told the Weekly.

The federal indictment alleges "Kooshian bilked health insurance companies, including Medicare, out of approximately $1.2 million in fraudulent claims relating to these medications."

"Dr. Kooshian told me, 'Never, never, never give the proper dose,'" recalled Opinion. "He always wanted the patient shortchanged, especially HIV and hepatitis patients with good insurance. It happened all the time. 'Virgil,' Kooshian said to me, 'you know I have a business to run.'"

Key sources familiar with Dr. Kooshian's office confirmed Opinion had repeatedly protested the doctor's practices. "You can bank on what Virgil has told you," said one source who spoke on condition of anonymity. "He just didn't concoct these things."

* * *

Kooshian was a popular figure in the local gay community—popular and powerful. A Virginia native, he launched his medical practice in 1981 after his residency at UC Irvine. He has been hailed for his community service, Southern charm and warm bedside manner.

But the AIDS controversy wasn't his first legal brawl. In 1991, Moxley discovered, state police raided two of his Orange County medical offices after an undercover narcotics sting. According to law-enforcement files, authorities confiscated various drugs related to illegal steroids production and arrested Kooshian. He eventually was charged with 14 felony counts, including prescribing drugs without a legitimate purpose and prescribing drugs to individuals who were not his patients. The doctor blamed his crimes on emotional distress in his personal life and received a reduced sentence of three years' probation and a $20,000 fine.

Board records obtained by the Weeklyshowed that Kooshian completed the probation in 2000. In the same documents, the doctor admitted his conduct in the steroid case "constituted an extreme departure from standards of care and represents a lack of knowledge or ability in the practice of medicine." He said he was "ashamed and humiliated by the realization of his unprofessional conduct."

But by that time, the public focus on AIDS helped Kooshian create a new business model and a new reputation. Boosted by his AIDS specialization, Kooshian moved into a $5 million, five-bedroom mansion on 17,300 square feet in exclusive Newport Coast. The press began to take notice. In a 1997 article, TheOrangeCountyRegistercongratulated the wealthy doctor for his charitable impulse: on his 40th birthday, a reporter said, Kooshian held a party for himself. In lieu of gifts, he asked friends to donate money to children with AIDS. The event generated almost $17,000. That same year, the Registernoted that Kooshian had "become well-known" in the AIDS community.

"In the early days" of AIDS medicine, Kooshian told the paper, "we offered a comforting hand, an understanding ear—someone to make you comfortable when that day came. Now, my spiel is: hope and hard work."

His spiel also included a kind of crusading spirituality. He told the Registerthat dealing with AIDS was "a responsibility that God has given us to carry into the 21st century." And, in an observation that looks chilling in retrospect, the doctor told the Registerthat new drugs called protease inhibitors are "a glorious surprise."

When the Weeklyseries revealed that Kooshian may have been injecting water, saline solution and multivitamins into critically ill AIDS patients and depriving them of such drugs as protease inhibitors, Kooshian first denied it.

"I am truly upset, saddened and disturbed [by the allegations]," Kooshian told Moxley in July 2001. At the same time, Kooshian attorney Eric E. Davis added that Kooshian's critics "really don't have any evidence. . . . It looks to me like they are just trying to blackmail somebody out of money. I don't think [Kooshian] has done anything wrong."

The allegations seemed too much for the celebrated doctor's supporters. "At this point," one wrote to the Weekly,"I am more concerned about the writer's interests than any possible wrongdoing by the doctor!" Another concluded, "Moxley is not so much interested in presenting news as in the adrenalin kick he gets while poring over his list of expletives and verbs while producing fantastic paranoia that went out of style back in the '60s with the closure of the LAFreePress."

Except for metroG.com, a gay Orange County website, which republished Moxley's articles, the local press was almost silent. The LATimeswrote nothing. Two weeks after Moxley's first story, the Registerwrote its first and only article on the subject, which included a statement from Kooshian: "I think there are other motives behind this. I don't believe that we did anything I think is wrong."

From April 2002:
Gay magazine blasts
reporting that helped
indict its advertiser

It was a curiously worded denial, and one might have expected local reporters to jump on it. Instead, The Orange County & Long Beach Blade,the Laguna Beach-based monthly gay magazine in which Kooshian regularly advertised his medical practice, ran a July 2002 ad with Kooshian attacking the Weeklyas a paper "lacking in journalistic integrity and objectivity." He described himself as "a concerned and caring physician" who had been victimized by "unethical and inappropriate" reporting.


 

"You guys have a lot more flexibility and freedom than we do," said Bladepublisher Bill LaPointe, explaining his magazine's continuing support of Kooshian on the day the indictments came down. "I can't just go out and publish rumor and innuendo."

"Kooshian endangered the lives of his HIV/AIDS patients for several years while the local GLBT [gay, lesbian, bisexual and transgendered] print media failed to report this important story," said Bill Brown, publisher of metroG.com. "If it weren't for the Weeklycovering the Kooshian story—while allowing metroG to use their coverage—many affected people would be unaware of a possible problem concerning their health and even their lives."

But Kooshian had real leverage with TheBlade;the magazine still carries prominent ads for his partnership, Valley View & Ocean View Internal Medicine. So at the moment when the gay community needed accurate information most, it's possible TheBladefound its hands tied: investigate a story of real import or bow to advertiser pressure. Months after Moxley's first stories ran in the Weekly,LaPointe wrote that TheBladewould have nothing to say about Kooshian until actual verdicts were rendered.

"I think it's important, even imperative, for the news media to publish all stories, such as the Kooshian story, so their readers can decide for themselves if they want to continue their health care with a doctor whose only obvious interest is money and not the well-being of his patients," said metroG's Brown. "As a publisher, I feel like it's my responsibility to publish all the news, not just the good news."

* * *

The controversy heated up that summer, when Moxley revealed Kooshian had confessed in an April 25, 2002, deposition that he had secretly ordered Opinion to inject an AIDS patient with liquid vitamins rather than an expensive and medically critical drug.

Kooshian made the admission in a deposition during a multimillion-dollar malpractice lawsuit filed against him by Bryan Noble, a past patient and prominent AIDS activist. Noble suffered from severe peripheral neuropathy, a condition that hampers vital nerve functions. In hopes of relieving pain that made work nearly impossible, Noble went to Kooshian from December 1999 until July 2001, expecting regular doses of intravenous immunoglobulin (IVIG). Shortly after the Weekly'sfirst story on Kooshian, Noble asserted the doctor committed assault and battery as well as fraud by repeatedly lying about the contents of intravenous injections. His lawsuit alleged he never received a single dose.

Kooshian finally relented. Following a grueling, sometimes-testy three-and-a-half-hour examination conducted by Lampel, Opinion and Noble's attorney, the doctor acknowledged the injection subterfuge and confirmed that Noble's IVIG had never even been ordered from a pharmacy.

"I told him [Opinion] to go ahead and give, you know, the vitamin infusion," Kooshian testified, according to documents obtained by the Weekly."And, you know, I, you know, chose to give him the vitamin packs because it actually was, you know, it wasn't something I planned. It's just sort of by the spur of the moment."

During each of his four two-hour appointments, Noble sat in the doctor's exam room believing the IV hooked to his arm was delivering powerful, expensive lifesaving drugs. But he was increasingly suspicious, puzzled by the lack of progress in his health. And he knew from experience that something wasn't quite right with Kooshian's IVIG treatments. IVIG has a short shelf life once mixed. Noble's previous doctor had always prepared the costly drug in his presence. But according to Noble, Kooshian always claimed he had mixed the IVIG before his patient's arrival.

When Lampel asked him why he had erroneously recorded in a medical file that Noble had received IVIG, Kooshian explained he was "swamped" with work and was "very embarrassed" the drug had not been administered.

According to Lampel, the fake IVIG treatments caused Noble additional pain that was not relieved until another doctor, Jorge Rodriguez of Newport Beach, administered real doses. Under Rodriguez's care, Noble told the Weeklyin July 2002, he no longer suffered the severe effects of peripheral neuropathy.

"When you go to a doctor, you put your life in his hands. You would hope he's not playing God," Noble said in Moxley's June 2002 story, "Dr. Kooshian, Mr. Hide".

In that same article, Moxley also revealed that Kooshian intended to build his trial defense on his assertion that he didn't orchestrate the fake injections but ultimately approved them because, though medically insignificant, they might produce a placebo effect. In the deposition, he seemed to downplay the medical ramifications of the faked injections. "I was not, you know, completely convinced the IVIG would help Bryan," he told Lampel. Though he doubted the drug's benefits, he said under oath, he deceived Noble in the hopes of producing a placebo effect. "I thought that there might be a psychological aspect," he said.

Candis Cohen, spokeswoman for the Medical Board of California—a state agency that took no action against Kooshian despite receiving copies of the Weeklyarticles as well as independent tips—said doctors are required to act ethically. "I can't think of a single situation where it would be legally appropriate to deliberately lie to a patient," she said.

Despite the admission, Kooshian promised that juries would never find him guilty. And in early 2003, it seemed he was right. In January of that year, each of the civil cases was dismissed from Orange County Superior Court, but not necessarily for the reason Kooshian had suggested. Both Virgil Opinion, his former nurse, and Bryan Noble, his former patient, agreed to drop their lawsuits after the millionaire HIV specialist paid them undisclosed amounts.

That much seemed hopeful. Then justice went weird. Thanks to legal motions by the doctor, the judges sealed settlement terms in both cases; all parties to the litigation are prohibited from discussing the matter. In the Noble suit, Kooshian won even greater secrecy: without offering even a hint of rationale, Judge William M. Monroe ordered the entire case file removed from public view.

Judge Michael Naughton, who handled the Opinion case, asserted that secrecy will protect the public and Kooshian's profitable medical business at Valley View Internal Medicine in Garden Grove and at his Ocean View Internal Medicine in Laguna Beach and Long Beach. Disclosure of the facts of the settlement would "materially interfere" with Kooshian's "reputation," Naughton said.

"The plain and simple truth is that [Kooshian] is a criminal," Lampel said before the settlement. "He has been engaged in crimes, and we intend to hold him responsible for his despicable conduct."

* * *

In the midst of the legal proceedings, Moxley revealed that Kooshian had quietly attempted the takeover of the county's HIV programs. In June 2002, Moxley unearthed county records that showed the doctor applied early that year to win an unpublicized $2.8 million annual contract to run the county's AIDS care facilities in Santa Ana and Laguna Beach. The two facilities served more than 1,200 patients.

Even there, Kooshian could not avoid notoriety.

In his article "Kooshian Coup?" Moxley reported the controversial doctor had inside help in his effort to win the contract.

The chairman of the county's powerful HIV Planning Council—which officially tells the county how to spend $6 million in federal AIDS grants each year—was Ron Viramontes. At the same time, Viramontes served as financial administrator for Kooshian's four medical offices. He was also Kooshian's lover. The two men shared Kooshian's massive Newport Coast estate as well as a taste for top-of-the-line Mercedes-Benzes and Porsches, which filled their 1,000-square-foot garage.

Records showed Viramontes lobbied several times on Kooshian's behalf with TIPPS Consulting Services, the county's private consultant on the feasibility and impact of privatizing AIDS services. On March 28, 2002, for example, he sent to TIPPS's Scott Helberg a two-page letter describing Kooshian's interest. The letter espoused Kooshian's qualifications but failed to mention the doctor's criminal history or current legal woes.

"I represent the physicians and staff of Valley View Internal Medicine and Ocean View Internal Medicine and wish to express our interest in the possibility of being a contractor for the County of Orange to provide HIV primary and specialty care services to persons eligible to receive Ryan White [federal AIDS grants] for services in the County of Orange," Viramontes wrote. "We look forward to working with you and the county on developing an outsource model for the provision of primary and specialty HIV medical care."

One observer had a two-word explanation for Kooshian's peculiar insider access: "Ron Viramontes."

"It doesn't take a genius to figure out that something stinks here," said one HIV expert. "Most everything is being done behind-the-scenes with very little public disclosure or debate. It's like they don't want anyone to know what is going on."

By using his insider position to lobby for what would be a highly lucrative contract for his lover, Viramontes may have run afoul of his organization's ethics guidelines. According to the HIV Planning Council's policies, "as a rule, members should not involve themselves in any council action that could materially benefit them personally, their business interests, or the interests of organizations they represent."

The county's Health Care Agency (HCA) also has guidelines for contract proposals, one of which requires its officials to assess "the availability or willingness of potential bidders to provide services." But according to the agency's own documents, the search for HIV specialists apparently began and ended with Kooshian.

In June 2002, Moxley called Bonnie Birnbaum, HCA's manager of HIV Programs, to find out why Kooshian was the only HIV specialist contacted in advance. Birnbaum declined to take the call; her assistant, Chris Prevatt, also declined to answer any questions on the record.

Sources said potential conflicts of interest don't end there. In addition to his business and personal ties to Kooshian as well as his key role at the HIV council, Viramontes also may have aided Helberg win county consulting contracts.

County officials refused to provide the Weeklywith a copy of Helberg's deal. But this much was clear: Helberg had an interesting business background for someone in the public-policy consulting game. He was co-owner of the Las Vegas-based TIPPS Consulting and something called Open Door to the Soul. In addition to the county of Orange, his other clients included Soul Astrologer; AndThey'reOff,a horseracing tip sheet; and Witchstar.com's Lady Brenda, an online "High Priestess," founder of the Grove of the Green Cobra and author of TheWayoftheWitch.

Helberg's May 1 "Final Report" on the clinic deal was available online—but not through the county. The Weeklyfound it first through Helberg's OpenDoortotheSoul.com. Helberg refused to be interviewed and, within hours, blocked public access to his Orange County HIV study by adding a password protection. Ironically, he described his website as "a place where people come together in spiritual community to share information, ideas, philosophies and to find acceptance and tolerance."

Pat Markley, an HCA spokeswoman, could not explain why the document was available through OpenDoortotheSoul.com. She told Moxley the county had not released the two-month-old report because it is "still under review."

"It is my understanding that we are tweaking the document now," she said.

Despite the bizarre secrecy surrounding the critical public-policy issue, the link between Helberg and Kooshian's office was indisputable. The consultant gave special thanks in his report to Viramontes for his "key" assistance in developing the privatization plan. However, the report's appendices showed Kooshian received relatively low scores in a confidential survey of county HIV patients. In his conclusion, Helberg made a non-binding recommendation that favored UC Irvine over Kooshian.

"Multiple providers with equal or greater experience and capacity have been identified," wrote Helberg. "Consequently, this excludes Dr. Kooshian's medical practice from consideration."

In a July 2002 letter to the paper, Kooshian attorney Terence J. Schafer said a Weeklyarticle on Kooshian's attempt to take over a county AIDS program contained "numerous libelous misstatements of fact and asserts libelous allegations of wrongdoing . . . which are plainly false." The lawyer demanded the Weeklyrespond with a published "retraction and correction immediately." The Weeklyreplied instead with a letter telling Kooshian that any legal challenge on his part would be met with a countersuit. Weeklyattorney Alonzo V. Wickers added that the Weekly'ssuit would likely make matters worse for Kooshian: it would be supported, he promised, "by numerous exhibits and declarations corroborating the published information, all of which would become part of the public court file."

No more was heard from Schafer.

* * *

Controversy followed Kooshian. Within months, he found himself in Long Beach Superior Court, in a case that seemed ready for TV. It pitted Kooshian, the celebrated AIDS doctor, against Charles "Karel" Bouley, a onetime KFI radio talk-show host whose domestic partner, Andrew Howard, had died at the age of 34 while under Kooshian's care [see "Dr. Kooshian vs. the Gay Community", March 19, 2003]. Bouley charged that Kooshian should have diagnosed the heart disease that killed Howard in May 2001, and he further alleged that Kooshian prescribed drugs that exacerbated the problem.

Kooshian called Howard's death "a tragedy" and responded in two ways. First, he said, "the nature and degree of coronary artery disease suggested by the autopsy report for this patient was truly extraordinary and unexpected."

Then he offered this interesting defense: as a gay man, Bouley had no legal standing, even under California's liberal domestic-partnership law, to sue Kooshian. Indeed, Kooshian said, Bouley's suit was an attempt to undermine the rights of the real victims in the case: Howard's parents.

"Let me be clear that I fully support the right of a domestic partner to pursue a wrongful-death lawsuit, and I was extremely pleased by Governor [Gray] Davis' decision to sign that bill into law," the doctor said. "My attorneys assured me that we would not be taking any position contrary to the validity of that law."

Bouley scoffed at the doctor's explanation.

"As a gay man, he ought to be embarrassed," he told Moxley. "It's all about the money with him."

But Kooshian won the fight—for the moment. In February 2003, Judge Margaret Hay booted Bouley from the case. Howard's parents remain as plaintiffs but were not entitled to the same level of financial damages if negligence was found.

In a terse opinion, Hay accepted Kooshian's argument that Assembly Bill 25 did not give Bouley the right to sue as Howard's domestic partner because Howard had died five months before the law was enacted. She stated unequivocally that the law "is not retroactive."

Oddly, the judge did not explain how her ruling jibes with the section of AB 25 that declares domestic-partner rights in wrongful-death cases apply "to any cause of action arising after Jan. 1, 1993."

"We expected the judge to rule against us," Bouley said at the time. "She's a very conservative judge. But it was the legislature's intent to make the law retroactive. I couldn't have been more married to Andrew. He would be so mad about what has happened. I definitely plan to appeal."

He did appeal. And he won. The state appeals court threw out Judge Hay's decision, concluding the law was indeed meant to cover events retroactively.

* * *

The U.S. Attorney's office said Kooshian and Opinion will be arraigned Aug. 1 in the Ronald Reagan Federal Courthouse in Santa Ana. At the hearing, the doctor—who could not be reached for comment—is expected to announce whether he'll plead innocent. If convicted, they face up to 10 years in prison for each of the 25 health-care fraud counts, as well as five years of incarceration for conspiracy and false statements.

"The indictment is exactly what Dr. Kooshian deserves, but my heart goes out to Virgil [Opinion]," Lampel told Moxley after hearing of the indictment. Though he no longer represents Opinion, Lampel said he's hopeful "federal prosecutors consider [Virgil's] instrumental whistle-blower role in exposing the doctor's unethical conduct that put so many unsuspecting patients at risk."


OriginalreportingbyR.ScottMoxley,whocanbereachedatRSCOTTMOXLEY@OCWEEKLY.COM.


Editor's note: Despite Moxley's well-established record of hard work—and, now, success—in pursuing the Kooshian story, The Orange County Register was strangely discursive in reporting the July 20 indictments. Reading the paper the next day, you might have concluded that Virgil Opinion walked into a public square—the Spectrum, maybe, or the Orange Circle—and yelled his story through a megaphone. Opinion, the Reg reported, simply "went public with accusations against Kooshian." But if that were true, the story might have ended then and there, in 2001, with one man's word against his former employer's in a typically contentious wrongful-termination suit. But the U.S. Attorney is clear about the genesis of the indictment, and so was the Los Angeles Times, which graciously credited Moxley's Weekly series.

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