A grand jury investigation into allegations of Medicaid fraud involving Prince George's Doctors Hospital and Dr. Leon R. Levitsky, its chief administrator and principal owner, has grown to encompass charges of obstruction of justice by several hospital employes.
The new allegations stem from efforts by state investigators to seize records they believe show the illegal use of funds from the hospital and adjoining Magnolia Gardens Nursing Home "for the personal benefit" of Levitsky and Dr. William Greco, his partner. The funds were allegedly used, according to court records, to "improve their personal residences" and to "maintain an aircraft" owned by Levitsky.
According to court papers filed by prosecutors, notification that a search warrant was about to be executed at the hospital Feb. 4 triggered the frantic removal in a red-and-white pickup truck and a blue Cadillac of dozens of boxes of files from the nursing home basement, which also serves as the hospital administrative office. Most of the files, the papers say, were taken from the hospital in Lanham to a nearby barn.
Thirty-five boxes were seized the next day at the barn. But subpoenas to 19 hospital employes, most of whom allegedly participated in or witnessed the records removal, were quashed by a circuit judge in Baltimore, where the grand jury investigation is being directed by the Medicaid fraud unit of the Maryland attorney general's office.
The state has appealed the suppression of subpoenas to the Maryland Court of Special Appeals and asked for a speedy review, since, according to Assistant Attorney General Stefan D. Cassella, the grand jury probe that began last summer has all but been brought to a standstill by the judge's action.
Neither Levitsky, who is regarded as politically influential in Democratic party circles in the county, nor Greco, his partner, returned a reporter's phone calls yesterday.
The search for the boxes was prompted by information from three employes cooperating with the probe, the court records said. Allegations include the possibility that personal expenses were hidden in the accounting records of the hospital and nursing home and false invoices made up.
A state accountant said in an affidavit that an examination of records already obtained uncovered attempted erasures "indicating that materials purchased by Magnolia Gardens had been delivered in fact" to Levitsky and Greco, who own the nursing home. Also allegedly installed in the doctors' homes were unspecified "equipment and merchandise" charged to the hospital.
Invoices from contractors who worked on Levitsky's home in College Park, the accountant said, "include notations indicating that agents of Doctors' Hospital had instructed the contractor to submit bills for the personal work to the hospital's building contractor and to disguise the true nature of the work performed." On other occasions, the accountant said, hospital employes performed personal services for "hospital owners and others" on hospital time.
The scope of the state investigation, which began in 1980 with allegations of Medicaid fraud, expanded last summer when Gov. Harry Hughes granted the attorney general's request to look for other crimes, including theft, larceny, embezzlement, bribery, conflict of interest, misfeasance, malfeasance, obstruction of justice and tax law violations.
Believing that relevant records were stored in the hospital's boiler room, state investigators secured search warrants from a Prince George's County judge in February. A lawyer representing a large number of hospital employes under subpoena received a courtesy call from the state 45 minutes before agents arrived on the scene. He was not told what building would be searched, the prosecutor said.
In a hearing held March 2 in the chambers of Baltimore Judge Milton B. Allen, Cassella, the prosecutor described what, according to his sources, happened next:
"At different times trucks pull up to the place where records are stored and five people are running back and forth, throwing cardboard boxes, and announcements are being made on loudspeakers and the truck disappears and drives down the road to a barn and the records are unloaded.
"It turns out that the search warrant was not for the place where the records were stored, but for another location. Nonetheless, the behavior was sufficiently unusual and peculiar to give us reason to believe that something was being committed in perpetration of a crime."
The barn where the records were taken belongs to Dorothy Houchens, Levitsky's executive assistant, and her husband, who did substantial air-conditioning work for the hospital and for Levitsky and Greco. The Cadillac said to contain other records, informants told investigators, also belongs to Mrs. Houchens.