Attorneys for doctors Chae Hyun Moon and Fidel Realyvasquez Jr., primary focuses of the criminal probe, hailed Scott's decision as vindication of their clients.

Scott acknowledged that FBI investigators would like to have seen the criminal case move forward. But he said prosecutors decided they couldn't meet the "very high hurdle" of proving the case beyond a reasonable doubt to a unanimous jury.

Scott maintained that "justice has been served" by the new settlement and that "the numerous victims of unnecessary heart procedures performed at Redding Medical Center" had been provided redress.

Although they agreed to pay $1.4 million each to the federal government, the two physicians at the center of the criminal case, Moon and Realyvasquez Jr., admitted absolutely no wrongdoing.

His client was the target of "baseless criminal allegations" and settled the dispute with Medicare and Medi-Cal because "he has simply given up on the legal system's ability to ensure complete justice will ever prevail," Segal said.

Segal also provided a quote from Realyvasquez: "I cannot continue to fight a system that is not interested in the truth," Realyvasquez said, calling the investigation "flawed from the beginning."

"We are pleased that the long battle that Dr. Moon has waged on behalf of himself and other doctors throughout the country is now over," the attorneys said is a statement.

"Since this investigation began," the attorneys said, "he has enjoyed the support of many patients, professionals and other citizens who know him to be an honest doctor. He thanks all of them now that their faith in him has been vindicated."

"The evidence shows that, on numerous occasions, rather than working in the best interests of their patients, these doctors put healthy patients' lives at risk," Hirst said.

The wide-ranging settlement also awards millions of dollars to whistle-blowers, including Redding internist Patrick Campbell, who provided much of the information that prompted an Oct. 30, 2002, FBI raid that opened the probe.

The settlement effectively ended the federal grand jury investigation that followed the FBI raids on RMC and Moon's and Realyvasquez's offices.

The settlement prohibits Moon and Realyvasquez from performing any cardiac procedures or surgeries on Medicare, Medi-Cal or TRICARE patients. TRICARE is federal insurance for members of the military.

Realyvasquez, Brusett and cardiac surgeon Ricardo Javier Moreno-Cabral and their Cardiac, Thoracic and Vascular Surgery Medical Group in Redding also agreed to authorize their insurance carrier to pay $24 million to 642 patients who claim they underwent unnecessary bypass surgeries at RMC.

The cardiologists last year paid $24 million to settle their portion of that civil suit, which involved 769 patients. Tenet and RMC paid another $395 million to end their civil liability.

Reiner said Tuesday that he believes Realyvasquez's decision to relinquish his rights to perform surgery on Medicare and Medi-Cal patients and "pay a huge fine back to the government shows that what he did was very, very wrong."

Attorney Segal said that participation in Medicare and Medi-Cal programs is supposed to be "a contribution to the community," but in this case it "somehow turned into an albatross around the physicians' necks."

In a separate, but related, part of today's settlement, whistle-blowers Joseph Zerga of Las Vegas and the Rev. John Corapi, a Roman Catholic priest who now lives in Montana, each received $2,712,281.

Tenet and RMC also will pay $1 million to settle a case involving allegations of violations of the California Insurance Code. Similar to a whistle-blower case on the state level, that case was brought by Corapi and Zerga. Half of the $1 million was included in their portion of the whistle-blower settlement.

The settlement also allows the federal government to look into the possibility of excluding Moon, Realyvasquez, Moreno-Cabral and Brusett from participation in federal or state health-care programs.

Hirst and Scott specifically noted that the settlement does not preclude action against the doctors by the state medical board, which opened investigations of Realyvasquez and Moon not long after the FBI raids.

Moon voluntarily agreed not to practice medicine during the continuing criminal probe, but neither investigation is closed, medical board spokeswoman Candis Cohen said Tuesday.

Now that the federal cases are settled, Cohen said, "the medical board's cases involving both doctors can move more quickly toward a resolution.

Shasta County District Attorney Jerry Benito said Tuesday that federal officials had urged him to promise not to prosecute any possible state criminal matters, but he refused.

The agreement provides that the doctors and their medical corporations "deny liability and that settlement is not an admission of liability, nor an admission of law or facts by the settling parties," the letter said.

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