An Indian-origin financial advisor from New York has been found guilty on 11 counts of defrauding public health insurance plans out of more than $4 million and transacting in the criminal proceeds.
Kaival Patel, 54, who underwent an 11-day trial before US District Judge Robert B. Kugler, is scheduled to be sentenced on April 10, 2024.
He was convicted last week of one count of conspiracy to commit wire and healthcare fraud, four counts of healthcare fraud, one count of conspiracy to commit money laundering by transacting in criminal proceeds, and five counts of money laundering by transacting in criminal proceeds.
“This defendant lined his own pockets by taking advantage of health insurance plans for New Jersey state and local government employees, defrauding them of millions of dollars by conspiring to obtain reimbursements for medically unnecessary compound prescription medications,” US Attorney Philip R. Sellinger said.
According to documents filed in this case and the evidence at trial, Patel created and operated a company called ABC Healthy Living LLC to market compound prescription medications.
Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient.
These medications, such as vitamins, scar creams, pain creams, libido creams, and acid reflux medications, require a prescription from a physician.
Patel and his conspirators learned that certain state and local government employees had insurance that would reimburse up to thousands of dollars for a one-month supply of certain compound medications.
They approached a medical doctor, a family member of Patel who owns and operates a clinic in Newark, and convinced him to authorise prescriptions for the compound medications for patients who had no medical need for the prescriptions.
Patel received commissions for the compound medication prescriptions.
Patel and his conspirators paid a group of corrections officers to go to Patel’s family member’s medical practice for the purpose of receiving fraudulent prescriptions.
He conspired with a compounding pharmacist to add unnecessary ingredients to the compound medications to further increase their cost and augment his illicit profits.
Patel engaged in a series of financial transactions to receive proceeds from the healthcare fraud and wire fraud conspiracy.
“The defendant enriched himself by defrauding the New Jersey public health insurance plans out of more than $4 million,” Tammy L. Tomlins, Special Agent in Charge of IRS – Criminal Investigation, Newark Field Office, said.
To date, approximately 47 people have been convicted or pleaded guilty in the overarching conspiracy.
On the count of conspiracy to commit wire fraud and healthcare fraud, Patel faces a maximum penalty of 20 years in prison and a fine of $250,000 fine, or twice the gross pecuniary loss from the offence, whichever is greatest.
On each of the remaining 10 counts, he faces a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross pecuniary gain or loss from the offense, whichever is greatest.
20231212175676
