legal fraud lawsuit

3-Defendants, 16-Defendant Pharmacies in Multiple States, Fraud Schemes Targeting Veterans

Residents of Los Angeles, California, and Henderson, Nevada, pleaded guilty this week in federal court to charges of healthcare fraud, conspiracy to commit fraud, and conspiracy to violate the federal anti-kickback statutes, United States Attorney Scott W. Brady announced today. Additionally, 16 corporate entities (pharmacies) pled guilty to charges of healthcare fraud, conspiracy to commit fraud, and/or conspiracy to violate the federal anti-kickback statutes.

Brothers Mehran David Kohanbash, and Joseph Kohan and their nephew, Nima Rodefshalom, entered pleas of guilty to three counts of a criminal Information before United States District Judge Susan Paradise Baxter. In addition to the three individual defendants, 16 pharmacies scattered between California, Texas, Wyoming, Arizona, and Nevada also entered guilty pleas. Those pleading guilty included Insure Nutrition, Inc., Affordable Pharmacy, Inc., ASC Pharmaceutical, LLC, DQD Enterprise Corporation, DTST Ventures, LLC, Econo Pharmacy, Inc., Emerson Pharmacy, Inc., Genorex Pharmaceutical, LLC, Nutrition Plus, Inc., Pharmatek Pharmacy, Inc., Premier Med Services, Inc., Rexford Pharmacy, Inc., Specialty Pharmacy Management of America, Inc., Solutech Pharmaceuticals, LLC, Village Drug & Compounding, Inc., and Vitamed LLC.

“For nearly five years, these defendants executed elaborate schemes to steal millions of dollars from health care systems across the United States, including both Highmark and TRICARE beneficiaries in Erie, Pennsylvania,” said U.S. Attorney Brady. “Where fraudsters target our veterans or vulnerable members of our community, especially relating to their health care, we will come after them.”

“These defendants intended to defraud our healthcare systems and deprive patients of their right to honest services,” said FBI Pittsburgh Special Agent in Charge Michael Christman. “They manipulated patients who were seeking bariatric treatment and preyed on their emotions, all to get the patient’s health insurance information. Without thinking twice, these defendants lined their pockets while putting a burden on our taxpayer-funded and private healthcare systems that in turn drives up insurance costs for everyone. Thank you to our partners, the United States Attorney’s Office and Department of Defense, Defense Criminal Investigative Service for their efforts on this investigation and prosecution.”

“These Plea Agreements demonstrate the continued commitment of the Defense Criminal Investigative Service, partnering with the Federal Bureau of Investigation, the Defense Health Agency, and the United States Attorney’s Office in the Western District of Pennsylvania, to protect the American taxpayer and its military members from those that exploit our nation’s healthcare programs including TRICARE,” said Bryan Denny, Patrick Hegarty, and Chris Dillard, Special Agents in Charge, U.S. Department of Defense Inspector General, Defense Criminal Investigative Service. “False and inappropriate billings, by virtue of intended schemes or willful ignorance, place the American Warfighter in danger, erode public confidence and undermine the mission of our military services. DCIS and its law enforcement partners will continue to investigate healthcare fraud allegations in order to protect U.S. military members and the American taxpayer.”

According to the information presented to the Court at the time of the pleas the three defendants conspired together to execute health care fraud schemes that targeted patients that had undergone, or were to undergo, bariatric surgical procedures. The individual defendants together with the defendant pharmacies engaged in a series of interconnected actions that resulted in misleading advertising associated with supplying what were described to the Court as nutritional shakes; the inducement to enlist various patients in ordering the nutritional shakes resulted in the defendants and the pharmacies securing the patients’ insurance information which in turn resulted in the defendants (individual defendants and by and through the pharmacies) soliciting the patients to appeal to their respective physicians to prescribe what were described for the Court as High Yield (expensive) medications.

These medications were often compounded, meaning that one or more of the pharmacies mixed together preexisting medications or substances to provide a new or different product. It was a part of the scheme(s) involved in the guilty pleas that the defendants conspired to promote these medications that often yielded extremely high profits. It was a part of the healthcare fraud scheme that the defendants defrauded healthcare benefit programs, both private insurance carriers and the government run health care program, TRICARE, for military members and their families, by manipulating the collection of co pays on various medications to make it appear that co pays were being collected when in fact they were not. An honest reporting of the failure to collect co pays would have resulted in the defendants being unable to bill insurance carriers for the cost of the various medications. The various schemes in which the defendants were involved were overlapping and ran from September of 2013 through May of 2018.

Judge Susan Paradise Baxter scheduled sentencing for April 7-8, 2020 for the individual defendants. Sentencing for the defendant pharmacies has not been scheduled. For each individual defendant, the law provides for a maximum total sentence of 35 years in prison, a fine of $750,000, or both.The three defendants and the 16 corporations agreed to forfeiture, restitution, fines and civil penalties amounting to more than $60,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant(s).

Pending sentencing, the court released each of the individual defendants on bail.

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