Twenty-one doctors, two pharmacists, two business owners and a physician assistant have been charged in an alleged $40 million kickback scheme that affected 13,000 patients and rattled California's workers compensation insurance system, the state's Insurance Commissioner and Orange County's district attorney jointly announced Thursday.
Among those charged are: Tanya Moreland King, 37, and her 38-year-old husband Christopher King, the Beverly Hills residents who own medical billing and medical management companies Monarch Medical Group, King Medical Management and One Source Laboratories; as well as Charles Bonner, 56, and 66-year-old Mervyn Miller, both of Irvine and the owners of Steven’s Pharmacy in Costa Mesa.
The Kings are accused of masterminding a complex insurance fraud scheme that included the recruitment of doctors and pharmacists so workers compensation insurance patients could be prescribed unnecessary treatments. The Steven’s Pharmacy owners allegedly conspired with the Kings by selling more than $1 million in compound creams that were not FDA approved nor have 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 at a Thursday morning press conference at OCDA headquarters in Santa Ana. “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."
Added DA Tony Rackauckas, “The Orange County District Attorney’s office will continue to be a leader in the state in prosecuting these types of crimes, because they affect the health of our economy and wellness of our bodies,” stated OCDA Rackauckas. “In order for the system to survive, we must have ethical doctors who abide by their Hippocratic Oath to ‘do no harm.’ The intent of many of the laws surrounding the insurance industry is to keep the three Ps–physician, patients and profit—separate. We have a track record of putting these types of fraudsters behind bars for a long time and we intend to do just that again.”
More than 13,000 patients and at least 27 insurance carriers were victims in the alleged scheme that is claimed, from 2011-15—to have included fraudulent billing for unnecessary creams, tests and treatments to maximize profits, say the authorities, who pegged the amounts paid out to the defendants at $23.2 million and billed to insurers at $40 million.
Doctors across the state were allegedly paid by the Kings every time they prescribed a compound cream or oral medication or ordered a urine drug test, with the physicians or the companies connected to them labeling the payments “marketing expenses” to conceal the kickbacks, according to the authorities. High-volume doctors were rewarded with office technicians paid for by the masterminds, the government prosecutors add.
One section of an OCDA press release on the alleged scheme starts with the headline "Snake Oil Scam." Under that is this: "The Kings are accused of working with pharmacist and co-defendant Charles Bonner, owner of Steven's 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 also accused of purchasing repackaged oral pain medications from 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," reads the OCDA advisory. "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 prearranged agreement."
Government prosecutors are also trying to take the piss out of the defendants by exposing a "bogus urine test scam."
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"The Kings are accused of providing technical staff to participating physician’s offices through their company One Source Labs," the OCDA states. "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."
The state Department of Insurance led the investigation with assistance from the OCDA’s Office Bureau of Investigation, the FBI and National Insurance Crime Bureau.
See if your doctor is among the other defendants: Dr. Jerome Robson, 68, Modesto; Dr. Eric Schmidt, 63, Santa Rosa; Dr. Chris Chen, 55, Pleasanton; Dr. Duke Ahn, 49, Los Alamitos; Dr. Robert E. Caton, 65, Modesto; Dr. Eduardo T. Lin I, 55, Pleasanton; Dr. Ismael Silva Jr., 63, Newport Coast; Dr. Ismael Geli Silva, 38, Huntington Beach; Dr. Paul A. Stanton, 54, Victorville; Dr. John Casey Jr., 65, Modesto; Dr. Jonathan Cohen, 57, Modesto; Dr. Mohamed Ibrahim, 40, Danville; Dr. William Pistel, 53, Modesto; Dr. Kevin Park, 49, Buena Park; Dr. Kourosh Shamlou, 49, Newport Coast; Dr. Mannie Joel, 67, Pleasanton; Dr. Parvez Fatteh, 46, Pleasanton; Dr. Robert Fenton, 68, Ranchos Palos Verdes; Dr. Michael Henry, 61, Granite Bay; Dr. Howard Oliver, 70, Long Beach; Rafael Chavez, P.A., 53, Apple Valley; Dr. Paul Kaplan, 76, Folsom.
You can find out the accusations against each doctor by visiting www.orangecountyda.org, selecting "Reports" under the pull-down menu and clicking the one titled, “Monarch Medical defendants and charges.”