“This type of illegal activity in which a medical professional’s pocketbook becomes more important than patient care is harmful to all of the victims of such a scheme.  In addition, consumers become victims as well as the result of higher insurance premiums.  We appreciate the efforts of the investigators in this case.” – CSLEA  President Alan Barcelona

LOS ANGELES –On April 17, 2023, Julian Omidi, 54, of West Hollywood, a former doctor, was sentenced to 84 months in federal prison for scheming to defraud private insurance companies and the Tricare health care program for U.S. military service members by fraudulently submitting nearly $120 million in claims related to the 1-800-GET-THIN Lap-Band surgery business.

Also sentenced was Surgery Center Management LLC (SCM), an Omidi-controlled Beverly Hills-based company, to five years’ probation. A separate hearing on restitution and forfeiture in this case, along with SCM’s fine, is expected in the coming weeks.

At the conclusion of a three-month trial, a federal jury in December 2021 found Omidi and SCM guilty of 28 counts of wire fraud and three counts of mail fraud. Omidi also was found guilty of two counts of making false statements relating to health care matters, one count of aggravated identity theft and two counts of money laundering. Omidi and SCM also were found guilty of conspiracy to commit money laundering.

“As found by the jury, the defendant Julian Omidi deliberately and repeatedly acted with an eye towards business and profits, rather than in the interest of GET THIN’s medical patients, by inducing patients to undergo medical treatment premised on fraud rather than medical necessity, including surgeries that carry significant risks and life-long health impacts,” said United States Attorney Martin Estrada. “Those who engage in fraud – to the detriment of vulnerable patients and the insurance companies – must always be held accountable.”

“Mr. Omidi made millions at the expense of the multiple victim companies he defrauded, and he violated his oath to ‘do no harm’ by callously misleading patients about the need for a sleep study and subsequent weight loss surgery,” said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “This successful prosecution should send a clear warning to anyone in the medical profession who intends to falsify insurance claims for unnecessary procedures or provide faulty medical advice to patients seeking reliable care.”

California Insurance Commissioner Ricardo Lara said, “Medical provider fraud is a multi-billion-dollar problem that drives up health insurance premiums and creates a drain on our economy. My Department of Insurance and our law enforcement partners are committed to investigating fraud and protecting consumers and the health care system.”

Omidi is a former dermatologist whose medical license was revoked in 2009 after state authorities found he had engaged in dishonesty and unprofessional conduct related to his application for his California medical license.

He controlled, in part, the GET THIN network of entities, including SCM, that focused on the promotion and performance of Lap-Band weight-loss surgeries. Omidi established procedures requiring prospective Lap-Band patients – even those with insurance plans he knew would never cover Lap-Band surgery – to have at least one sleep study, and employees were incentivized with commissions to make sure the studies occurred.

Omidi used the sleep studies to find a reason – the “co-morbidity” of obstructive sleep apnea – that GET THIN would use to convince the patient’s insurance company to pre-approve the Lap-Band procedure.

After patients underwent sleep studies – irrespective of whether any doctor had ever determined the study was medically necessary – GET THIN employees, acting at Omidi’s direction, often falsified the results. Omidi then used the falsified sleep study results 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’ weights – insurance companies authorized payment for some of the proposed Lap-Band surgeries. Moreover, 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. Prosecutors estimate that Omidi’s conduct caused insurers and Tricare to pay at least approximately $41 million for Lap-Band procedures, sleep studies, and CPAP devices and accessories tainted by this fraud.

The victim health care benefit programs include Tricare, Anthem Blue Cross, UnitedHealthcare, Aetna, Health Net, Operating Engineers Health and Welfare Trust Fund, and others.

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, including Omidi. The government is seeking a money judgment order of forfeiture against defendants Omidi and SCM in the amount of $98,280,221 and is pursuing civil forfeiture of the seized property totaling $107,539,422.

The U.S. Food and Drug Administration Office of Criminal Investigations; the FBI; the Defense Criminal Investigative Service; IRS Criminal Investigation; and the California Department of Insurance investigated this matter.