Thirteen Individuals Indicted in an Alleged Health Care Fraud and Drug Distribution Scheme

March 20, 2013

The Federal Bureau of Investigation (FBI) on March 19, 2013 released the following:

“Five Doctors, Four Pharmacists, and Home Health Agency Owner Among Those Indicted in Follow-Up to the Babubhai Patel Case

Thirteen individuals have been charged in a large-scale health care fraud and drug distribution scheme, United States Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Special Agent in Charge Robert L. Corso of the Drug Enforcement Administration, Special Agent in Charge Robert D. Foley, III of the Federal Bureau of Investigation, and Lamont Pugh, Special Agent in Charge of the Inspector General of the Department of Health and Human Services.

The superseding indictment, unsealed yesterday, adds 13 new defendants and new charges to a 2011 indictment, which charged Canton Pharmacist Babubhai ‘Bob” Patel with overseeing a massive health care fraud and drug distribution ring at more than 20 pharmacies that he owned and controlled in metro-Detroit.

The 13 new defendants named in the superseding indictment include five doctors, four pharmacists, and a home health agency owner:

  • pharmacist Mehul Patel, 34, of Canton
  • pharmacist Pradeep Pandya, 49, of Grand Blanc
  • pharmacist Vikas Sharma, 34, of Windsor
  • pharmacist Mukesh Khunt, 33, of Toronto
  • physicians Richard Utarnachitt, 71; of Clinton Township
  • physician Ruben Benito, 72, of Madison Heights
  • physician Javaid Bashir, 59, of Jackson
  • physician Carl Fowler, 60, of West Bloomfield
  • physician Rajat Daniel, 47, of West Bloomfield
  • home health agency owner Vinod Patel, 40, of Canton
  • business associate Atul Patel, 31, of Canton
  • marketer Anthony Macklin, a.k.a. “Jimbo,” of Detroit
  • marketer Michael Thoran, a.k.a. “Ace,” also of Detroit

The 21-count superseding indictment charges that Babubhai Patel was the owner and controller of approximately 26 Michigan pharmacies. The indictment alleges that Babubhai Patel would offer and provide kickbacks, bribes, and other illegal benefits to physicians to induce those physicians to write prescriptions for patients with Medicare, Medicaid, and private insurance. Patel would also direct that those prescriptions be presented to one of the Patel Pharmacies for billing. In exchange for their kickbacks and inducements, the physicians would write prescriptions for the patients and bill the relevant insurers for services supposedly provided to the patients without regard to the medical necessity of those prescriptions and services. The physicians would direct the patients to fill their prescriptions at one of the Patel Pharmacies, where Babubhai Patel and his pharmacists would bill insurers, including Medicare, Medicaid, and private insurers, for dispensing the medications, despite the fact that the medications were medically unnecessary and, in many cases, never provided. Patients were recruited into the scheme by patient recruiters or “marketers,” who would pay kickbacks and bribes to patients in exchange for the patients’ permitting the Patel Pharmacies and the physicians associated with Patel to bill their insurance for medications and services that were medically unnecessary and/or never provided.

The indictment further alleges a conspiracy to distribute controlled substances at the Patel pharmacies to facilitate the submission of false and fraudulent claims to Medicare, Medicaid, and private insurers. According to the indictment, Babubhai Patel and his associates paid physicians kickbacks for prescriptions for controlled substances for their patients and directed those patients to fill the prescriptions at a Patel Pharmacy. The controlled substances included the Schedule II drug oxycodone (Oxycontin), the Schedule III drug hydrocodone (Vicodin, Lortab), the Schedule IV drug alprazolam (Xanax), and the Schedule V drug cough syrup with codeine. According to the indictment, prescriptions for these drugs were written outside the course of legitimate medical practice. Babubhai Patel and his pharmacists would then dispense the controlled drugs to patients without medical necessity. The distribution of controlled substances in this manner was intended, in part, as a kickback to the patients for agreeing to enable their insurance cards to be billed for medications purportedly dispensed at the Patel Pharmacies. The indictment also alleges that Babubhai Patel and his pharmacists dispensed controlled substances outside the scope of legitimate medical practice to patient recruiters or “marketers,” as a kickback for their efforts in to recruit patients into the scheme.

In addition to his pharmacies, the indictment alleges that Babubhai Patel had an ownership interest in a home health agency managed by his brother, Vinod Patel. The indictment alleges that Vinod Patel, Babubhai Patel, and others bribed physicians and other referral sources for referrals to that home health agency and then billed the Medicare program for home health services that were medically unnecessary and never provided.

Of the 26 defendants originally charged in the indictment, six, including Babubhai Patel and four pharmacists, were convicted at a trial last summer. Fifteen additional defendants, including six pharmacists and two doctors, have pleaded guilty in the case. The five remaining defendants whose charges were renewed in the superseding indictment are set for trial on June 10, 2013. On February 1, 2013, Babubhai Patel was sentenced to 17 years’ imprisonment by U.S. District Judge Arthur J. Tarnow.

“Taxpayers fund Medicare and Medicaid to provide health care for needy citizens,” McQuade said. “We hope that doctors and pharmacists will take note that if they exploit these programs for personal profit, they will face serious consequences.”

Robert L. Corso, Special Agent in Charge of DEA’s Detroit Field Division stated, “Confronting the illegal diversion and abuse of controlled pharmaceuticals is a top priority of DEA and our law enforcement partners. Today’s indictments, particularly of the medical professionals are significant. It is alleged that these individuals abused their positions of trust and endangered the lives of countless people by illegally distributing opiate painkillers and depressants throughout southeast Michigan. This investigation makes it clear that the DEA and our partners in law enforcement will continue to investigate and bring to justice those individuals that are responsible for the illegal distribution of prescription medicines.”

FBI Special Agent Robert Foley stated, “Dishonest health care providers and pharmacists who exploit Medicare and Medicaid through fraudulent billing and other schemes will be held accountable for their crimes. The FBI remains committed to investigating this type of fraud and bringing those who abuse the system to justice.”

“Schemes involving the illegal diversion and/or distribution of controlled substances go hand and hand with the fraudulent billing of Medicare and other health care programs,” said Lamont Pugh, III, Special Agent in Charge of the U.S. Department of Health & Human Services, Office of Inspector General—Chicago Regional Office. “The OIG and our law enforcement partners are acutely aware of the potential for those who commit health care fraud to utilize this blended approach when seeking to line their pockets with tax payer dollars. The indictments and arrests announced today illustrate our combined commitment and effort to protect the safety and well-being of the public and as well as the health care programs they rely upon.”

The investigation in this case was handled by the Drug Enforcement Administration, the Federal Bureau of Investigation, and the Department of Health and Human Services Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorneys John K. Neal and Wayne F. Pratt.

An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


5 Are Charged in Alleged Schemes at Agency on Housing

June 6, 2012

The New York Times on June 5, 2012 released the following:

“By JOSEPH GOLDSTEIN

By the time Wendell B. Walters, a former top official at a New York City agency that builds affordable housing, pleaded guilty to accepting bribes in March, he was known to be cooperating with the F.B.I. and federal prosecutors.

On Tuesday, details of what Mr. Walters has so far told the authorities began to emerge, as federal prosecutors in Brooklyn charged five more people in bribery and kickback schemes involving the city’s Department of Housing Preservation and Development, where Mr. Walters was an assistant commissioner until last year.

The charges provide further details about the $2.5 million in bribes and other benefits Mr. Walters has pleaded guilty to accepting, and also assert that he was not the only corrupt official with oversight of the city’s affordable housing program.

A criminal complaint charged one Brooklyn contractor, Panayiotis Papanicolaou, who had received contracts for several Department of Housing Preservation and Development projects, with paying $12,390 to send Mr. Walters on a honeymoon trip to Greece. A real estate developer, William B. Clarke, subsidized $50,000 worth of renovations to Mr. Walters’s home, according to a second criminal complaint, which charges that Mr. Walters promised to help Mr. Clarke’s company secure subsidies for an affordable housing project in the Bronx in return.

Prosecutors also charged a current department official, Michael Provenzano, 49, with receiving a $10,000 annual retainer between 2004 to 2009 from a contractor who wanted inside information from the agency. Mr. Provenzano supervised the inspectors who visit work sites and began providing the contractor with paperwork from the agency’s site inspections, prosecutors said.

This allowed the contractor to tailor his payrolls to match what the housing agency had observed at the job sites, prosecutors said. In fact, prosecutors said, laborers at the contractor’s job sites were routinely paid less than the required prevailing wage, and the remaining money was used to hire illegal immigrants.

Prosecutors also charged a housing official who left the agency earlier this year, Luis Adorno, 48, with participating in a kickback scheme.

The five criminal complaints unsealed against the various defendants on Tuesday in Federal District Court in Brooklyn do not mention Mr. Walters by name. But several of the complaints mention a cooperating witness who appears to be Mr. Walters; the witness is described as someone who began working at the housing agency in 1998 and rose to the level of assistant commissioner before pleading guilty this year.

“Instead of fulfilling their charge to create affordable housing for deserving New Yorkers, these defendants looked for ways to line their own pockets,” the United States attorney in Brooklyn, Loretta E. Lynch, said in a statement. The five defendants were in court on Tuesday afternoon and entered pleas of not guilty, Robert Nardoza, a spokesman for the United States attorney’s office, said.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


US prosecutors: Ex-Mexican governor’s Texas properties bought with bribes from drug cartels

May 23, 2012

The Washington Post on May 22, 2012 released the following:

“By Associated Press

McALLEN, Texas — Federal prosecutors allege the former governor of a Mexican state bordering Texas accepted millions of dollars in bribes from drug cartels and invested the money in Texas real estate.

The allegations were levied in two property forfeiture cases filed Tuesday against Tomas Yarrington, who served as governor of Tamaulipas state from 1999 to 2004. No criminal charges have been filed.

Yarrington’s attorney says he’s reviewing the documents.

Yarrington was named earlier this year in the federal indictment of a man charged with money laundering in San Antonio. That indictment alleged leaders of the Gulf and Zetas cartels paid millions to Institutional Revolutionary Party members, including Yarrington.

In the forfeiture cases, U.S. authorities are trying to confiscate a condominium in South Padre Island and a 46-acre property in San Antonio.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Father and son plead guilty in multimillion-dollar federal bribery scheme

May 18, 2012

The Washington Post on May 18, 2012 released the following:

“By Clarence Williams

A former program manager for the Army Corps of Engineers and his son pleaded guilty Thursday to federal charges in a scheme that paid out more than $30 million worth of bribes and kickbacks as payments for steering multimillion dollar government contracts, federal prosecutors said.

Kerry F. Khan, 54, of Alexandria, pleaded before Judge Emmet G. Sullivan in the U.S. District Court in the District to charges of bribery and conspiracy to commit money laundering, officials said in a statement.

“Today, the ringleader of the largest bribery and bid-steering scheme in the history of federal contracting accepted responsibility for his crimes,” U.S. Attorney for the District Ronald Machen said in the statement. “For his shocking abuse of his position of power, Kerry Khan faces more than two decades in prison.”

Kahn’s son, Lee A. Kahn, 31, of Fairfax also pleaded guilty to a charge of conspiracy to commit money laundering. The elder Khan worked for the Army Corps of Engineers from 1994 until he was arrested by federal authorities in October 2011. His position gave him authority to place orders for products and services through federal contracts, and he also certified that work orders were completed, officials said.

The father and son were among four men arrested in October on charges of conspiring to commit bribery and wire fraud. Authorities accused the men of inflating invoices during a four-year period and then collecting tens of millions of dollars for themselves and co-conspirators.

Prosecutors said Kerry Khan signed a statement of offense that said that in or around 2006, he and colleagues agreed to work together to obtain government contracts for corrupt contractors who would reward them with bribes. Authorities said their investigation continues, but they have found eight people to have have been part of this scheme.

Among others, Kerry Khan and Michael A. Alexander, also an Army Corps of Engineers program manager, worked with Harold F. Babb, a contractor, on their plot to use a company called EyakTek as a vehicle for channeling contracts awarded by the Army Corps of Engineers. EyakTek then hired subcontractors that submitted fraudulently inflated estimates or prices for equipment and services, authorities said.

The subcontractors kicked back a significant portion of the excess funds to Kerry Khan and Alexander as bribes for keeping the money flowing their way, officials said.

Prosecutors said Khan and his son admitted to establishing multiple corporations and shell companies to hide the money and purchase real estate, including several houses and condos. Lee Khan managed the portfolio of properties and automobiles purchased using the bribe money, by leasing the homes to tenants or selling vehicles, officials said.

A sentencing date has not been set for either man. Kerry Khan faces a maximum 15-year sentence for the bribery charge and up to 20 years in prison for the conspiracy charge. Babb and Alexander pleaded guilty to federal charges earlier this year.

The men will remain held through the sentencing, officials said.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Mail Fraud Crimes

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Former Los Angeles County Sheriff’s Deputy Agrees to Plead Guilty to Federal Corruption Charge

January 16, 2012

The Federal Bureau of Investigation (FBI) on January 13, 2012 released the following:

“WASHINGTON—A former Los Angeles County Sheriff’s deputy was charged today with agreeing to accept $20,000 in bribes in exchange for smuggling contraband into the Men’s Central Jail, announced Thomas E. Perez, Assistant Attorney General for the Civil Rights Division, and André Birotte Jr., U.S. Attorney for the Central District of California

In a criminal information filed in U.S. District Court in Los Angeles, Gilbert Michel, 38, was charged with one count of bribery of a public official.

In a plea agreement also filed today, Michel agreed to plead guilty to the charge and to cooperate in an ongoing investigation.

Michel, who resigned from the Los Angeles Sheriff’s Department (LASD) in September 2011, was assigned to the Men’s Central Jail in downtown Los Angeles. The criminal information charges that the LASD is a local organization which receives federal funds and that Michel, as deputy sheriff, was responsible for the care, custody, and security of inmates housed at the jail.

In the plea agreement, Michel admits that he agreed to accept $20,000 in cash in exchange for smuggling contraband into the jail for delivery to an inmate. The contraband included a cell phone, cigarettes, and a note, which in jail parlance is called a “kite.”

The charge of bribery of a public official carries a statutory maximum penalty of 10 years in federal prison.

Michel is expected to make his initial court appearance in this case on Jan. 17, 2012.

The case against Michel is part of an ongoing investigation being conducted by the FBI. The case is being prosecuted by the U.S. Attorney’s Office for the Central District of California in conjunction with the Justice Department’s Civil Rights Division.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

————————————————————–

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Two Former Secretary of State Road Test Examiners Indicted for Allegedly Accepting Cash Bribes to Guarantee Passing Test

November 15, 2011

The Federal Bureau of Investigation (FBI) on November 14, 2011 released the following:

“CHICAGO— Two former road test examiners for the Illinois Secretary of State were indicted for allegedly accepting cash bribes to pass customers who were unqualified or never took the road test, federal law enforcement officials announced today. The charges stem from an investigation that was unveiled in 2009 when members and associates of an alleged crime ring were accused of selling fraudulent identification documents in Chinatown on the city’s near south side. The new defendants allegedly conspired between 2005 and 2007 with several of the defendants charged previously to accept cash bribes in return for guaranteeing that an unspecified number of customers would pass the road test, enabling them to obtain an Illinois driver’s license.

One defendant, Christopher Wardlaw, 36, was arrested today, while the other defendant, Alanda Jackson, 31, both of Chicago, will be ordered to appear for arraignment at a later date in U.S. District Court. Both were road test examiners at the Secretary of State’s Chicago South Facility, located at 9901 South Dr. Martin Luther King Dr. They were charged with one count of conspiracy to commit extortion in an indictment that was returned by a federal grand jury last Thursday and unsealed today following Wardlaw’s arrest. Wardlaw was released on his own recognizance after appearing this morning before U.S. Magistrate Judge Jeffery T. Gilbert.

The indictment seeks forfeiture of $40,000, representing alleged illegal proceeds.

The charges were announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Robert D. Grant, Special Agent in Charge of the Chicago Office of the FBI; Chicago Police Superintendent Garry F. McCarthy; and Illinois Secretary of State Inspector General James B. Burns. The charges are part of Operation Paper Mountain, which has resulted in federal charges against approximately three dozen defendants since 2009.

According to the indictment, Wardlaw and Jackson conspired with another former SOS employee, Timothy Johnson, as well as with Jun Yun Zhang, Lili Liu, Tiansheng Zhang, and others, who were indicted in 2009. Each of those defendants has pleaded guilty to related federal charges. The Zhangs and other defendants routinely escorted customers to Secretary of State driver’s license facilities to fraudulently obtain state identification cards or driver’s licenses, typically using counterfeit or altered authentic Chinese passports and legitimate social security account numbers with the prefix “586” that were assigned to other people. The 586 prefix is unusual because it is assigned to individuals in the Northern Mariana Islands, including Saipan, Guam and American Samoa.

When co-conspirators accompanied customers to the Chicago South facility, Wardlaw and Jackson allegedly guaranteed passing results on the road test either by serving as the examiner and passing the customer even if he or she failed the road test, or by obtaining the customer’s road test paperwork from a co-conspirator and indicating that the customer passed when, in fact, the customer never took the test.

The government is being represented by Assistant U.S. Attorneys Matthew Madden, Steven J. Dollear and Yasmin Best.

Extortion conspiracy carries a maximum penalty of 20 years in prison and a $250,000 fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

Federal Crimes – Appeal

————————————————————–

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.