On April 24th, 2017

$40 Million Workers’ Comp Fraud Scheme Uncovered 26 doctors, pharmacists and business owners charged

ORANGE COUNTY— On April 20, 2017, Insurance Commissioner Dave Jones and Orange County District Attorney (OCDA) Tony Rackauckas announced that charges have been filed against 26 California doctors, pharmacists and business owners allegedly involved in a massive, $40 million fraudulent medical billing and kickback operation that affected 13,000 patients.

Tanya Moreland King, 37, and her husband Christopher King, 38, both of Beverly Hills, own medical billing and medical management companies Monarch Medical Group, Inc., King Medical Management, Inc. and One Source Laboratoires, Inc.  Moreland and King are accused of masterminding a complex insurance fraud scheme of recruiting doctors and pharmacists to prescribe unnecessary treatment for workers’ compensation insurance patients.

Irvine pharmacists Charles Bonner, RPh., 56, and Mervyn Miller, RPh., 66, both owners of Steven’s Pharmacy, are accused of conspiring with Christopher and Tanya King by selling more than $1 million in compound creams that were not FDA approved nor have any known medical benefits.

“The Kings and their co-conspirators played with patients' lives, buying and selling them for profit without regard to patient safety,” said California Insurance Commissioner Dave Jones. “Patients have the right to expect treatment decisions by health care professionals are based on medical need and not unadulterated greed. The magnitude of this alleged crime is an affront to ethical medical professionals."

“Detectives with the California Department of Insurance worked with the Orange County District Attorney’s Office to sort through a massive and complex case,” said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona.  “When you have a case involving more than two dozen suspects and years of fraud to investigate, you need the very best investigators, which CDI has proven time and time again, it does.”

From 2011 to 2015, the defendants are charged for their part in the fraudulent scheme of billing for unnecessary creams, tests and treatments to maximize profits. More than 13,000 patients and at least 27 insurance carriers were victims in the scheme. The California Department of Insurance led the investigation with assistance from the Orange County District Attorney’s Office Bureau of Investigation, the FBI, and the National Insurance Crime Bureau. Approximately $23.2 million was paid out to the defendants, but a total of $40 million was billed to insurers.

The Kings are accused of making agreements to pay doctors throughout the state each time they prescribed a compound cream or oral medication or ordered a urine drug test. The doctors or the companies connected to them are accused of labeling the payments “marketing expenses” in an attempt to conceal the kickbacks. The Kings are accused of rewarding doctors who provided higher volume by paying for office technicians.

The Kings are accused of working with pharmacist and co-defendant Charles Bonner, owner of Stevens Pharmacy in Costa Mesa, to manufacture a variety of creams with unknown effects from Steven’s Pharmacy that were not FDA approved. The Kings purchased the creams for between $15 and $40 per tube. These products were then billed to patients’ workers’ compensation insurance carriers for between $250 and $700 dollars per tube. Tanya King is accused of recruiting physicians to participate in this scam by paying a flat $50 rate or a share in the profits.

The Kings are accused of purchasing repackaged oral pain medications from two companies: NuCare Pharmaceuticals in Orange and A-S Medication Solutions in Costa Mesa. Using their company Monarch Medical Group as a cover, the Kings are accused of repackaging meds sent directly to the physicians involved in the scam. As the doctors dispensed the medication, the bar code on the packaging was scanned, notifying the Kings. The Kings are accused of billing workers’ compensation insurance carriers without disclosing the wholesale cost or the fact they had purchased the medication on behalf of the physicians who ultimately prescribed it. Once the Kings received the payment, they are accused of splitting the profits with the prescribing physician based upon a pre-arranged agreement.

The Kings are accused of providing technical staff to participating physician’s offices through their company One Source Labs. The doctors are accused of ordering unnecessary urine tests, under the guise of verifying patients on workers’ compensation insurance were taking their medications as prescribed. The urine samples were then tested by One Source Lab technicians or the doctors’ staff and billed to the insurance company on behalf of the physicians by King Medical Management. The results were then referred to Pacific Toxicology Laboratory for additional testing, regardless of results. Through their company One Source Labs, the Kings are accused of paying Pacific Toxicology a flat rate of $60 per test and billing the insurance carriers hundreds of dollars per patient.

 

Defendants:

Tanya King, 37, Beverly Hills

Christopher King, 38, Beverly Hills

Dr. William Pistel, 53, Modesto

Dr. Kevin Park, 49, Buena Park

Charles Bonner, RPh., 56, Irvine

Dr. Kourosh Shamlou, 49, Newport Coast

Mervyn Miller, RPh., 66, Irvine

Dr. Mannie Joel, 67, Pleasanton

Rafael Chavez, P.A., 53, Apple Valley

Dr. Parvez Fatteh, 46, Pleasanton

Dr. Jerome Robson, 68, Modesto

Dr. Robert Fenton, 68, Ranchos Palos Verdes

Dr. Eric Schmidt, 63, Santa Rosa

Dr. Michael Henry, 61, Granite Bay

Dr. Chris Chen, 55, Pleasanton

Dr. Howard Oliver, 70, Long Beach

Dr. Duke Ahn, 49, Los Alamitos

Dr. Eduardo T. Lin I, 55, Pleasanton

Dr. Robert E. Caton, 65, Modesto

Dr. Paul Kaplan, 76, Folsom

Dr. Ismael Silva Jr., 63, Newport Coast

Dr. Mohamed Ibrahim, 40, Danville

Dr. Ismael Geli Silva, 38, Huntington Beach

Dr. Jonathan Cohen, 57, Modesto

Dr. Paul A. Stanton, 54, Victorville

Dr. John Casey Jr., 65, Modesto

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