Allied Management Group Special Investigation Unit of Santa Ana Accused of Being Sham Health Care Fraud Finders

Allied Management Group Special Investigation Unit (AMG-SIU) bills itself as "The Total Health Care Fraud, Waste and Abuse Solution." But the Santa Ana fraud finders find themselves at the center of a lawsuit that accuses AMG-SIU of being a "shell company" for corporate greed.

It was the Bakersfield Californian that first revealed Kern Health Systems (KHS), a taxpayer-funded agency that serves as a public HMO for Medi-Cal and other low-income patients in Kern County, had been bleeding money to AMG-SIU since spring 2008. The agency is now suing AMG-SIU over an $8 million audit of medical records.

The suit was first filed in Kern County Superior Court, but AMG-SIU filed a motion to move the case to Orange County. Among the grounds Allied cited was the inconvenience of lawyers and company officials having to schelp to Kern County and Bakersfield news media coverage "vilifying AMG" that "poisons the slim chances that AMG and other defendants can receive an impartial trial."

Judge William Palmer in Kern County earlier this month approved a change of venue to Los Angeles County's North Valley District in Chatsworth after both parties agreed that venue represents an appropriate compromise.

The KHS lawsuit does not specify a specific damage amount being sought, other than indicating the agency seeks the return of the millions it paid to AMG-SIU and potentially millions more in interest, legal costs and any other expenses.

The questionable billing occurred before AMG-SIU was acquired by HMS Holdings of New York in June 2010. Dennis Demetre, the Allied CEO before that acquisition, is accused in the suit of joining Chief Operations Officer Lori Lewis--thought to be his wife--in running a "mere shell" corporation that "used assets of the corporation for their personal uses." It's further alleged AMG-SIU's auditors were not properly educated or licensed.

Allied counters that KHS officials at the time signed off on all the anti-fraud work AMG-SIU did for Kern County.


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