Tag Archives: California Department of Justice

Operators of Bogus Medical Clinics Charged in Conspiracy to Divert Massive Amounts of Prescription Narcotics to the Black Market

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Thursday, August 3, 2017

Glendale Defense Attorney and Others Involved in Scheme Allegedly Obstructed Justice by Creating Fake Medical Records to Justify Fraudulent Prescriptions

LOS ANGELES – The operators of seven sham medical clinics were among 12 defendants taken into custody this morning on federal drug trafficking charges that allege they diverted at least 2 million prescription pills – including oxycodone and other addictive and dangerous narcotics – to the black market.

Two indictments returned late last month by a federal grand jury alleges that members of the conspiracy profited from illicit prescriptions that were issued without any legitimate medical purpose through a series of clinics that periodically opened and closed in a “nomadic” style. The fraudulent prescriptions allegedly allowed the conspirators to obtain bulk quantities of prescription drugs that were sold on the street.

Those arrested this morning include Minas Matosyan, an Encino man also known as “Maserati Mike,” who is charged with leading the scheme and controlling six of the sham clinics. Matosyan allegedly hired corrupt doctors who allowed the conspirators to issue fraudulent prescriptions under their names in exchange for kickbacks.

“The two indictments charge 14 defendants who allegedly participated in an elaborate scheme they mistakenly hoped would conceal a high-volume drug trafficking operation,” said Acting United States Attorney Sandra R. Brown. “In addition to generating illicit profits, this scheme helped drive the prescription drug epidemic that is causing so much harm across our nation.”

“This investigation targeted a financially motivated racket that diverted deadly and addictive prescription painkillers to the black market,” said DEA Special Agent in Charge David Downing. “Today’s arrests underscore our resolve – DEA and its law enforcement partners will not tolerate criminal enterprises that fuel and exploit the opioid epidemic.”

The indictments unsealed today and search warrants executed this morning describe how Matosyan would “rent out recruited doctors to sham clinics.” Matosyan allegedly supplied corrupt doctors in exchange for kickbacks derived from proceeds generated when the other sham clinics created fraudulent prescriptions or submitted fraudulent bills to health care programs. In one example described in the court documents, Matosyan provided a corrupt doctor to a clinic owner in exchange for $120,000. When the clinic failed to pay the money and suggested instead that Matosyan “take back” the corrupt doctor, Matosyan demanded his money and said, “Doctors are like underwear to me. I don’t take back used things.”

In a recorded conversation described in court documents, Matosyan discussed how one doctor was paid “for sitting at home,” while thousands of narcotic pills were prescribed in that doctor’s name and Medicare was billed more than $500,000 for purported patient care.

The conspirators also allegedly stole the identities of doctors who refused to participate in the scheme. In an intercepted telephone conversation described in court documents, Matosyan offered a doctor a deal to “sit home making $20,000 a month doing nothing.” When the doctor refused the offer, the conspirators nevertheless created prescription pads in the doctor’s name and allegedly began selling fraudulent prescriptions for oxycodone without the doctor’s knowledge or consent.

According to court documents, the conspirators also issued prescriptions and submitted fraudulent billings in the name of a doctor who at the time was hospitalized and later died.

“The defendants in this scheme heartlessly lined their pockets with cash from the sale of thousands of addictive prescription drugs sold through the black market,” stated IRS Criminal Investigation’s Special Agent in Charge, R. Damon Rowe. “IRS Criminal Investigation, along with our law enforcement partners, will continue to aggressively pursue those who seek to profit from the sale and distribution of illegitimate prescription narcotics creating a drug crisis of epic portions in our country.”

“For the sake of mere profit, the operators of these medical clinics spewed deadly prescription drugs onto our streets. The opioid epidemic gripping this country is well documented and our communities in the Los Angeles area have been impacted,” said Christian J. Schrank, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Too often those ill-gotten gains came at the expense of innocent Americans. It has been a pleasure working with our law enforcement colleagues to bring these people to justice.”

“Today’s enforcement actions, and the long-term multiagency investigation that preceded them, have dealt a major blow to a sophisticated healthcare fraud and identity theft scheme that posed a double threat. Not only did the defendants in this case use physicians’ names to write fraudulent prescriptions and fleece Medicare out of millions of dollars, but they’re also accused of funneling large quantities of dangerous prescription opiates, including oxycodone and hydrocodone, into the community,” said Joseph Macias, special agent in charge for Homeland Security Investigations in Los Angeles. “In collaboration with our law enforcement partners, HSI will continue to aggressively target those who compromise the integrity of our healthcare system and public safety to satisfy their own greed.”

The indictment also charges Matosyan and others – including Glendale-based criminal defense attorney Fred Minassian – with obstruction of justice for allegedly creating fraudulent medical records in an effort to deter the investigation.

After a load of Vicodin was seized from one of the conspiracy’s major customers, Matosyan allegedly oversaw the creation of fake medical paperwork in an effort to make it appear the drugs had been legitimately prescribed. The indictment describes intercepted conversations in which Minassian strategized on how to deceive law enforcement, which included a plan to bribe a doctor to lie to authorities.

The 12 defendants arrested this morning are:

  • Minas Matosyan, 36, of Encino, who is accused of leading the scheme by recruiting corrupt doctors, overseeing the theft of other doctors’ identities, and negotiating the sale of fraudulent prescriptions and narcotic pills;
  • Armen Simonyan, 52, of Burbank, who allegedly managed the operations at some of the fraudulent clinics;
  • Grisha Sayadyan, 66, of Burbank, who allegedly managed the operations at various clinics and sold oxycodone and Vicodin pills directly to black market customers;
  • Sabrina Guberman, 45, of Encino, who, while working at the sham clinics, allegedly lied to pharmacies seeking to verify the fraudulent narcotic prescriptions, which included creating and sending fake medical paperwork;
  • Frederick Manning Jr., 47, of Santa Ana, allegedly one of the major drug customers of the clinics, who is charged with agreeing to purchase as many as 1,000 pills per week of narcotics from Matosyan;
  • Fred Minassian, 50, of Glendale, the criminal defense attorney who allegedly spearheaded the scheme to lie to law enforcement by making it falsely appear that Vicodin seized from Freddie Manning Jr. had been legitimately prescribed by a doctor;
  • Ralph Manning, 49, of North Hills (no relation to Frederick Manning Jr.), who is charged with being one of the principal couriers Matosyan used to deliver fraudulent prescriptions and “bulk quantities” of narcotic pills;
  • Hayk Matosyan, 30, of Granada Hills, Matosyan’s brother, who allegedly filled fraudulent narcotic prescriptions at pharmacies and sold the resulting narcotics pills to black-market customers.
  • Marisa Montenegro, 54, of West Hills, who allegedly filled fraudulent prescriptions;
  • Elizabeth Gurumdzhyan, 25, of Hollywood, who allegedly filled fraudulent prescriptons;
  • Anait Guyumzhyan, 27, of Hollywood, who allegedly filled prescriptions for oxycodone and returned the drugs to Matosyan-operated clinics in exchange for cash payment; and
  • James Wilson, 54, of Venice, who alone is charged in the second indictment with illegally selling oxycodone prescriptions out of a Long Beach clinic that he controlled.

The 12 defendants arrested this morning are expected to be arraigned on the indictment this afternoon in United States District Court.

Authorities are continuing to seek two defendants named in the main indictment. Those fugitives are: Gary Henderson, 62, of Lancaster, who allegedly purchased fraudulent oxycodone prescriptions from Matosyan; and an unidentified conspirator known only by the name “Cindy.”

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.

All of the defendants face significant terms in federal prison if they are convicted. For example, if convicted of the nine counts in which he is charged, Matosyan would face a statutory maximum sentence of 165 years in prison.

The investigation in this case was conducted by the Drug Enforcement Administration; IRS Criminal Investigation; the U.S. Department of Health and Human Services – Office of Inspector General; the Ventura County Sheriff’s Office, Pharmaceutical Crimes Unit; and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.

The primary investigative agencies received substantial assistance from the Los Angeles County Sheriff’s Department, the Los Angeles Police Department, the California Department of Justice, and the Orange Police Department.

The case is being prosecuted by Assistant United States Attorneys Benjamin Barron and Jamie Lang of the Organized Crime Drug Enforcement Task Force.

Former Los Angeles-area Pastor Sentenced for Role in $11 Million Medicare Fraud Scheme

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A pastor and owner of a Los Angeles-area medical supply company was sentenced today for his role in a power wheelchair fraud scheme that defrauded Medicare out of more than $11 million.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. of the Central District of California; Special Agent in Charge Glenn R. Ferry of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office; and Special Agent in Charge Joseph Fendrick of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse made the announcement.

Charles Agbu, 58, of Carson, Calif., was sentenced by U.S. District Judge George H. Wu to serve 87 months in prison and was ordered to pay $5,788,725 in restitution to Medicare.  In December 2012, Agbu pleaded guilty to conspiracy and money laundering charges based on his role as owner and operator of Bonfee Inc., a fraudulent durable medical equipment (DME) supply company that Agbu operated with his daughter and co-defendant, Obiageli Agbu, and members of his family from a nondescript office building in Carson.  Agbu admitted that he paid patient recruiters and doctors to provide him with fraudulent prescriptions for expensive, highly specialized power wheelchairs and other DME that he, Obiageli Agbu and their co-conspirators used in submitting more than $11 million false claims to Medicare.  Agbu billed the power wheelchairs to Medicare at a rate of approximately $6,000 per wheelchair even though he paid approximately $900 wholesale per wheelchair.  In many cases, the Medicare beneficiaries to whom Agbu and his co-conspirators claimed they supplied the power wheelchairs and DME did not have any legitimate medical need for the medical equipment, and, in some cases, never received the medical equipment from Agbu’s company.  At the time Agbu engaged in this fraud, he was a pastor at Pilgrim Congregational Church in South Central Los Angeles.

On Sept. 30, 2013, and Oct. 2, 2013, Agbu’s co-defendants, Alejandro Maciel, 43, of Huntington Park, Calif., and Dr. Emmanuel Ayodele, 65, of Los Angeles, were sentenced to serve 41 and 37 months in prison and ordered to pay $5,388,755 and $6,355,949 in restitution to Medicare, respectively.  Two other co-defendants, Dr. Juan Van Putten and Candelaria Estrada, have pleaded guilty to Medicare fraud charges and are scheduled for sentencing on Dec.12, 2013, and Oct. 31, 2013, respectively.  Obiageli Agbu was convicted by a jury on nine counts of conspiracy to commit health care fraud and health care fraud on July 19, 2013.  Her sentencing date has not been set.

The case is being investigated by the FBI, HHS-OIG and the California Department of Justice and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.  The case is being prosecuted by Trial Attorneys Jonathan T. Baum and Alexander Porter of the Criminal Division’s Fraud Section.

The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.  In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

Owner of Los Angeles-area DME Company Pleads Guilty to Conspiring to Defraud Medicare and Medi-Cal

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The owner of a Los Angeles-area durable medical equipment (DME) supply company has pleaded guilty to conspiring to defraud Medicare and Medi-Cal of more than $650,000.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. of the Central District of California; Special Agent in Charge Glenn R. Ferry for the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); Assistant Director in Charge Steven Martinez of the FBI’s Los Angeles Field Office; and Special Agent in Charge Joseph Fendrick of the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse, made the announcement.

Kim Ricks, of Moreno Valley, Calif., pleaded guilty on July 17, 2013, before U.S. District Judge Fernando M. Olguin in the Central District of California to one count of conspiracy to commit health care fraud.

In court, Ricks admitted that she owned and operated Kim’s Medical Supplies (“KMS”), a DME company that was located in Moreno Valley.  Ricks enrolled KMS in both Medicare and Medi-Cal, which allowed her to submit claims to both programs.  Ricks admitted that between approximately December 2005 and September 2012, she submitted claims to Medicare and Medi-Cal for power wheelchairs (PWCs) and other DME on behalf of people who did not have a legitimate medical need for the equipment, a practice that, Ricks admitted in court, she knew violated Medicare and Medi-Cal rules and regulations.

Ricks also admitted that she submitted claims to Medicare and Medi-Cal for PWCs and other DME that neither she nor her co-conspirators delivered to KMS’s customers, which Ricks knew violated the rules and regulations of both Medicare and Medi-Cal.  In some cases, Ricks obtained the Medicare billing and personal information of individuals and, without their knowledge, used that information to submit claims to Medicare and Medi-Cal for PWCs and other DME that neither she nor her co-conspirators provided to the individuals.  Ricks admitted that she submitted these types of claims to Medicare and Medi-Cal because she needed the money to keep KMS viable.  Ricks also admitted that she submitted claims to Medicare and Medi-Cal for power wheelchairs and DME that she knew were supported by fraudulent prescriptions forged by her co-conspirators.

Ricks admitted that she was responsible for the claims that KMS submitted to Medicare and Medi-Cal, although, at times, her co-conspirators used her Medicare and Medi-Cal provider numbers to submit false and fraudulent claims to both programs.  As a result of this conspiracy, Ricks admitted that she and her co-conspirators submitted and caused the submission of approximately $643,468 in fraudulent Medicare claims and received approximately $236,882 in ill-gotten reimbursement payments.  Ricks admitted further that she and her co-conspirators submitted and caused the submission of approximately $11,849 in fraudulent Medi-Cal claims and received approximately $8,660 in ill-gotten reimbursement payments.

At sentencing, scheduled for Oct. 24, 2013, Ricks faces a maximum penalty of 10 years in prison.

The case is being prosecuted by Trial Attorney Jonathan T. Baum of the Criminal Division’s Fraud Section.  The case is being investigated by the HHS-OIG and the California Department of Justice.

The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.  The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.  In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.