On March 2nd, 2018

Two Doctors Arrested in Lap-Band Surgery Fraud Case California Department of Insurance & DOJ special agents assist in investigation

LOS ANGELES – On February 28, 2018, two Los Angeles area doctors were arrested on federal fraud charges stemming from more than $250 million in allegedly fraudulent bills related to the 1-800-GET-THIN Lap-Band surgery business.

Julian Omidi, 49, of West Hollywood, and Mirali Zarrabi, 55, of Beverly Hills, are accused of operating a plan in which prospective Lap-Band patients – even those covered by insurance plans that would never cover Lap-Band surgery – would have at least one sleep study in order to find a second reason to convince a patient’s insurance company to pre-approve the Lap-Band procedure. The purpose of the sleep studies was to find a “co-morbidity,” such as sleep apnea – that GET THIN would use to convince the patient’s insurance company to pre-approve the Lap-Band procedure.

“Doctor Zarrabi and former physician Omidi victimized countless patients when they allegedly provided medically unnecessary treatment in order to boost their own profits to the tune of tens of millions of dollars,” said California Insurance Commissioner Dave Jones. “Medical provider fraud is multi-billion dollar problem that drives up health insurance premiums and creates a drain on our economy.”

“These types of investigation can be extremely time consuming and very complicated,” said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona. “Federal and state investigators and agents worked together to uncover this fraud and arrest the individuals suspected of it.”

An indictment contains charges of mail fraud, wire fraud, false statements, money laundering and aggravated identity theft.

Omidi, a physician whose license was revoked in 2009, controlled, in part, the GET THIN network of entities, including Surgery Center Management, LLC (SCM) and Independent Medical Services, Inc (IMS), that focused on the promotion and performance of elective, Lap-Band weight-loss surgeries.

After patients underwent sleep studies – often with little indication that any doctor had ever determined the study was medically necessary – GET THIN employees, acting at Omidi’s direction, allegedly often falsified the results to reflect that the patient had moderate or severe sleep apnea, and that they suffered from severe daytime sleepiness. Omidi then caused those falsified sleep study reports to be used in support of GET THIN’s pre-authorization requests for Lap-Band surgery.

Relying on the false sleep studies – as well as other false information, including patients’ heights and weights – insurance companies authorized payment for some of the proposed Lap-Band surgeries. The indictment alleges that GET THIN received at least $38 million for the Lap-Band procedures.

Even if the insurance company did not authorize the surgery, GET THIN still was able to submit bills for approximately $15,000 for each sleep study, receiving millions of dollars in payments for these claims, according to the indictment. The insurance payments were deposited into bank accounts associated with the GET THIN entities.

The victim health care benefit programs include TriCare, Anthem Blue Cross, UnitedHealthcare, Aetna, Cigna and others.

Zarrabi allowed his electronic signature to be used by GET THIN to make it falsely appear that he had reviewed and interpreted the falsified sleep studies, even though he knew the reports were being altered, according to the indictment. Zarrabi also allegedly demanded to be paid for the use of his electronic signature on hundreds of prescriptions for devices to treat sleep apnea. Zarrabi allegedly did not review the prescriptions, which were sent with the falsified sleep study reports to durable medical equipment providers that billed for sleep apnea equipment that patients often did not need.

In 2014, the government seized more than $110 million in funds and securities from accounts held by individuals and entities involved in the criminal scheme described in the indictment, including Omidi. The government is seeking forfeiture of some or all of those funds in the criminal case, and also intends to pursue civil forfeiture of some or all of the assets.

If convicted in this case, Omidi and Zarrabi potentially face decades in federal prison, including a statutory maximum penalty of 20 years in prison for each of the 31 mail fraud and wire fraud counts alleged in the indictment.

This case is the product of an investigation by the U.S. Food and Drug Administration, Office of Criminal Investigations; the Federal Bureau of Investigation; the Defense Criminal Investigative Service; IRS Criminal Investigation; the California Department of Insurance; and the California Department of Justice.

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