(a) The executive director shall maintain a statewide program for investigation and referral for prosecution of violations of State laws pertaining to fraud or abuse in the program.

(b) Whenever, in the conduct of an audit of the books and records of a provider or in the evaluation of utilization review reports or provider profiles, there is sufficient evidence of program fraud or abuse to warrant investigation of the provider, the contractor shall promptly refer the matter to the executive director for investigation.

(c) Where initial review of a contractor referral indicates substantial potential for criminal prosecution, the executive director shall refer the matter to the Attorney General or local prosecutive authority. Where initial review does not indicate substantial potential for criminal prosecution, the executive director shall conduct further investigation to determine whether or not the subject provider should be discontinued from participation in the program.

(d) Where investigation indicates substantial evidence of abusive practices on behalf of a provider or his affiliates, the provider may be terminated, suspended or restricted in accordance with the provisions of section 9800.7(b) of this Title.