[Sign Up Now] to Receive Our FREE Daily SCVTV-SCVNews Digest by E-Mail

Inside
Weather
Santa Clarita CA
Mostly sunny
Mostly sunny
84°F
 
Calendar
Today in
S.C.V. History
June 24
1980 - Saugus Train Station relocated to Heritage Junction [story]


Two Doctors and Pharmacist Charged in Scheme that Used Medicare to Pay for Drugs that Were Diverted to Black Market through Street Sales
| Friday, Oct 14, 2011

[Los Angeles County Sheriff’s Department] – Federal and state authorities arrested 10 defendants Thursday morning – including two doctors – who are named in a federal indictment that alleges members of a drug trafficking organization illegally obtained and distributed more than 1 million OxyContin pills obtained largely through fraud against public insurance programs such as Medicare.

The indictment, which names 14 defendants, outlines the first scheme alleged in California in which Medicare Part D was victimized. The drug distribution ring allegedly was run out of a Los Angeles medical clinic, where doctors wrote OxyContin prescriptions for Medicare, Medi-Cal and uninsured patients who did not need the powerful painkiller. The OxyContin was obtained from pharmacies, often by fraudulently billing the public insurance programs, and leaders of the organization allegedly resold the OxyContin on the street, reaping millions of dollars in profits.

More than 1 million maximum-strength OxyContin pills were diverted to the street, where they were sold for between approximately $23 and $27 per pill, according to the indictment.

The indictment also alleges that some of the OxyContin was obtained through prescriptions for “patients” whose identities and Medicare beneficiary information had been stolen, and that members of the organization simply paid full retail price – approximately $1,200 for a single bottle – for some of the OxyContin because resale on the black market brought such large profits.

“The two-year investigation into this organization reveals the sophisticated nature of today’s drug traffickers,” said United States Attorney André Birotte Jr. “With a medical clinic and doctors to lend it legitimacy, the organization not only flooded the streets of Los Angeles with an extremely dangerous narcotic, it also bilked a government-run program designed to help the poor and elderly.”

The indictment alleges a conspiracy to distribute controlled substances, a conspiracy to commit health care fraud, substantive health care fraud charges, and unlicensed wholesale distribution of prescription drugs.

“Our agents dismantled a well-organized drug trafficking network including doctors, clinic administrators and pharmacists who were supposed to help people, but instead conspired to defraud the state,” stated California Attorney General Kamala D. Harris. “I commend their work.”

The scheme was orchestrated by Mike Mikaelian and Anjelika Sanamian, who operated the Lake Medical Group on West 8th Street in Los Angeles, according to the indictment, which calls the clinic a “prescription mill” that both generated prescriptions for unneeded OxyContin and submitted claims to Medicare and Medi-Cal for medical services that were unnecessary or were never performed. The indictment alleges that medical doctors Eleanore Santiago and Morris Halfon knowingly diverted the OxyContin by prescribing it to individuals who did not have a medical need. The indictment further alleges that a significant percentage of the prescriptions were filled at pharmacies owned by defendant Theodore Yoon.

The indictment alleges that Lake Medical Group used recruiters – generally called “cappers” – who brought Medicare and Medi-Cal patients to the clinic in exchange for cash or other rewards. The “patients” were seen by a medical doctor or physician’s assistant, who would provide a prescription for the maximum dosage of OxyContin – 90 pills at 80mg strength – and order unnecessary medical tests and procedures to help justify the OxyContin prescriptions. “Runners” employed by the Lake Medical Group took the recruited “patients” to pharmacies, where they obtained the OxyContin, which was then delivered to Mikaelian, who then sold it on the street.

“Prescription drug abuse has reached epidemic levels, with more than 7 million people using prescription drugs for non-medical reasons every month,” said Timothy J. Landrum, Special Agent in Charge of the Drug Enforcement Administration in Los Angeles. “Today’s arrests have taken a complex network of drug dealers out of our communities – drug dealers who were abusing their authority in the medical community to profit from those vulnerable to these drugs.”

In many cases, Lake Medical Group was able to obtain the OxyContin for free. The indictment alleges that the pharmacy dispensing the OxyContin received payment for the narcotics by billing the “patients’” Medicare Part D prescription drug programs for the OxyContin prescriptions.

The clinic operated for approximately 18 months, during which time doctors working at Lake Medical Group prescribed OxyContin 10,833 times. During this time, Medicare Part D and Medicare prescription drug programs paid more than $2.7 million for OxyContin prescriptions generated by the clinic and its doctors.

During the same period – August 2008 through early February 2010 – the clinic and its doctors fraudulently billed Medicare approximately $4.6 million and Medi-Cal approximately $1.6 for alleged medical services that were either not performed or were unnecessary, according to the indictment.

“Today’s coordinated arrests make clear we will pursue all the links – be they doctors, pharmacists, or others – in the Medicare fraud chain,” said Glenn Ferry, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s region in Los Angeles. “Schemes that steal from taxpayers to pay for high-profit street drugs – as the government alleges in this case – will trigger investigation and prosecution.”

Thomas Emerick, Special Agent in Charge of the U.S. Food and Drug Administration’s Office of Criminal Investigations, Los Angeles Field Office, commented: “The defendants in this case demonstrated blatant disregard for the health and welfare of the general public by illegally obtaining and distributing prescription drugs. We commend our law enforcement partners for their dedicated and collaborative efforts in pursuing this prosecution.”

Those taken into custody Thursday, either through arrest or self-surrender to authorities, are expected to be arraigned this afternoon in United States District Court. A complete list of defendants is attached to this press release.

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

This investigation, which was called Operation “Dirty Lake,” was conducted by the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse; the United States Department of Health and Human Services, Office of the Inspector General; the California Department of Health Care Services, Investigations Branch; the
Los Angeles County Sheriff’s Department – HALT Team; the United States Food and Drug Administration, Office of Criminal Investigations; the Federal Bureau of Investigation; and the Drug Enforcement Administration.

Suspected Medicare fraud can be reported to the HHS Office of Inspector General Hotline at: 1-800-HHS-TIPS (1-800-447-8477). To obtain more information or report suspected fraud, go to http://www.oig.hhs.gov/fraud/report-fraud/index.asp.

The California Bureau of Medi-Cal Fraud and Elder Abuse Hotline number is 1-800-722-0432. Suspected fraud related to the Medi-Cal program can be made at http://ag.ca.gov/bmfea.

Comment On This Story
COMMENT POLICY: We welcome comments from individuals and businesses. All comments are moderated. Comments are subject to rejection if they are vulgar, combative, or in poor taste.
REAL NAMES ONLY: All posters must use their real individual or business name. This applies equally to Twitter account holders who use a nickname.

0 Comments

You can be the first one to leave a comment.

Leave a Comment


SCV NewsBreak
LOCAL NEWS HEADLINES
Friday, Jun 22, 2018
USA Today: Six Flags Magic Mountain No. 1 Theme Park
After four weeks of spirited voting, USA Today announced Friday that readers have voted Six Flags Magic Mountain the winner of the 2018 Best Theme Park contest.
Friday, Jun 22, 2018
After Firearms Raid, Acosta Calls for More Law Enforcement Funding
The state of California has a list of more than 10,000 known individuals in illegal possession of firearms, but has not provided adequate resources for law enforcement to recover their weapons, Assemblyman Dante Acosta (R-Santa Clarita) said in a statement Friday.
Friday, Jun 22, 2018
Study: Prop. 47 Decreased Racial Disparities in Drug Arrests
A voter-approved ballot measure aimed at reducing California’s prison population and ending racial disparities in the war on drugs has produced most of the cost-saving, equity-focused results it promised, with some exceptions, according to a study published Thursday.
Keep Up With Our Facebook

Latest Additions to SCVNews.com
1980 - Saugus Train Station relocated to Heritage Junction [story]
1946, 11:20pm: William S. Hart, 81, dies at L.A.'s California Lutheran Hospital, leaving his Newhall home and 80-acre estate to L.A. County [story]
Los Angeles County Registrar-Recorder/County Clerk Dean C. Logan announced the sixth ballot counting update for the June 5 Statewide Direct Primary Election on Friday.
Sixth Election Results Update for June 5 Primary Election
The Master's University women's cross country team released its 2018 schedule Friday, the highlight coming Nov. 3 when it hosts the Golden State Athletic Conference Championships at Central Park in Saugus.
TMU Women’s Cross Country Releases 2018 Schedule
Minimum wage laws change July 1, so the Santa Clarita Valley Economic Development Corporation and SCV law firm Poole & Shaffery, LLP will present a "Minimum Wage Forum" at College of the Canyons' University Center on Wednesday, August 1 from 7:30 a.m. to 10:30 a.m.
August 1: Minimum Wage Forum at COC University Center
Allison Needham of the Santa Clarita Valley Economic Development Corporation outlines the top five digital trends shaping 2018 so far.
It’s Personal: 5 Digital Trends Shaping 2018
The Robert T. Brentnall Pawsibilities Foundation, a Santa Clarita-based nonprofit animal rescue organization (Tax ID# is 47-5634745), is asking the community to help a family with a litter of German shepherd puppies, by adopting one or donating funds to help care for them.
Animal Rescue Group Seeks Help for German Shepherd Puppies
CalArts School of Art faculty member Shirley Tse will represent Hong Kong at the 2019 Venice Biennale in Venice, Italy, happening now through November 2019.
CalArts’ Shirley Tse to Represent Hong Kong at Venice Biennale
University administrators are falling short in their responsibilities to swiftly hold accountable staff and faculty named in sexual violence complaints and align disciplinary policies with federal guidelines, according to a state audit released Thursday of three University of California campuses.
UCLA, 2 More UC Campuses Faulted for Sex Misconduct Process
The Academy of Motion Picture Arts and Sciences is proud to announce commitments from four additional industry partners – AMC Networks, Moving Picture Institute, Telsey + Company, and Xperi – to participate in Academy Gold, an entertainment industry-wide internship enhancement and mentorship program for students and young professionals from underrepresented communities.
Academy Launches Summer ‘Gold’ Diversity Internships
The Los Angeles County Board of Supervisors in their meeting Tuesday will consider a motion urging California to create an emblem program for licensed cannabis stores so consumers will know which stores are legal.
Supes Propose Statewide Cannabis Store Licensing Program
The JetHawks began the second half of the 2018 season with a win, beating Inland Empire, 7-5, at The Hangar Thursday night.
JetHawks Start Strong in Second Half, Beat IE 7-5
After four weeks of spirited voting, USA Today announced Friday that readers have voted Six Flags Magic Mountain the winner of the 2018 Best Theme Park contest.
USA Today: Six Flags Magic Mountain No. 1 Theme Park
The next meeting of the Los Angeles County Board of Supervisors is set for Tuesday, June 26, starting at 9:30 a.m.
June 26: LA County Board of Supervisors Meeting
The state of California has a list of more than 10,000 known individuals in illegal possession of firearms, but has not provided adequate resources for law enforcement to recover their weapons, Assemblyman Dante Acosta (R-Santa Clarita) said in a statement Friday.
After Firearms Raid, Acosta Calls for More Law Enforcement Funding
A voter-approved ballot measure aimed at reducing California’s prison population and ending racial disparities in the war on drugs has produced most of the cost-saving, equity-focused results it promised, with some exceptions, according to a study published Thursday.
Study: Prop. 47 Decreased Racial Disparities in Drug Arrests
A Santa Clarita Valley Sheriff's Station deputy reportedly clocked a Las Vegas woman driving 93 miles an hour near the Saugus Speedway and arrested her on charges of excessive speed and reckless driving late Wednesday night.
Nevada Woman Arrested for Speeding, Reckless Driving in Saugus
1972 - Vasquez Rocks added to National Register of Historic Places [list]
The ARTree still has openings for next week's Junior Arts Sampler and "I Made That!" pastel classes.
ARTree Summer Classes Still Available
The Santa Clarita Arts Commission will hold a study session, Monday, June 25, at 6:30 p.m.
June 25: Arts Commission Study Session
The California Enterprise Development Authority will hold a teleconference meeting, Thursday, June 28, 2018 at 10:30 a.m.
June 28: California Enterprise Development Authority Teleconference Meeting
The Santa Clarita City Council will hold a special meeting Tuesday, June 26, at 5:30 p.m.
June 26: Santa Clarita City Council Special Meeting
Firefighters are battling a brush fire at the Sunshine Canyon Landfill that started around 3:00 p.m. Thursday.
Firefighters Battling 1-2 Acre Fire Near Newhall Pass
Glenn Frankel and Keri Walsh have been named 2018 Academy Film Scholars by the Academy of Motion Picture Arts and Sciences.
Academy Honors 2018 Film Scholars
Join the Santa Clarita Valley Chamber of Commerce and Sweat Box Sauna Bar as they celebrate the opening of their new location.
June 27: Grand Opening Celebration Sweat Box Sauna Bar
Fresh Mustang connections to Major League Baseball didn't end with the draft earlier this month. Master's graduate David Sheaffer, who transferred before his final collegiate season to pursue an international MBA program, signed a free agent contract with the Seattle Mariners on June 10.
TMU Alum Signs with Seattle Mariners
There are spots still available on the Saugus Spartans Football program for kids between the ages of 6-8 years old.
Spots Still Open on Saugus Spartans Football Program
An already extremely tight inventory bumped into rising interest rates to further complicate home sales during May in the Santa Clarita Valley, which saw drops in home and condominium closed escrows compared to a year ago, the Southland Regional Association of Realtors reported Thursday.
SCV Home, Condo Sales Drop Amid Tight Inventory, Rising Interest Rates
Detectives from the Santa Clarita Valley Sheriff's Station are looking for a male suspect who stole a tip jar from a local coffee shop. Details below are from the Facebook page of the SCV Sheriff's Station:
Detectives Seek Public’s Help in Nabbing Tip Jar Thief
Adoption is a meaningful way for individuals and couples to fulfill their dream of parenting. There are approximately 64,000 children in foster care in California.
July 28: Children’s Bureau Foster Care, Adoption Information Meeting
The Los Angeles County Sheriff’s Department will be conducting a specialized Motorcycle Safety Enforcement Operation on Friday, June 22, in the city of Santa Clarita in an effort to lower deaths and injuries.
LASD to Conduct Specialized Motorcycle Safety Operation
LOS ANGELES – According to the South Coast Air Quality Management District, air quality will be unhealthy for all individuals in Santa Clarita Valley and for sensitive individuals in East San Gabriel Valley area tomorrow, Friday, June 22.
Air Quality Advisory Issued for SCV
1941 - Ernie Hickson buys out Trem Carr's interest in their Monogram movie ranch, renames it "Placeritos" (later called Melody). [story]
CalArts alumna and faculty member Brigette Barrager (BFA Film/Video 07) was awarded the Christopher Award for Distinguished Achievement for her illustration of "Pocket Full of Colors."
CalArts Faculty Brigette Barrager Wins Christopher Award
"Window Lace," the first exhibit by CalArts students to be presented at the Westfield Valencia Town Center Mall, is now open on the mall's first floor across from H&M and will be on display through the end of summer 2018.
CalArts Opens its First Art Exhibit at Westfield Valencia Mall
The Academy of Motion Picture Arts and Sciences today announced that Jennifer Todd has won the runoff election for the open Producers Branch seat on the 2018–19 Board of Governors.
Producer Jennifer Todd Voted to Academy Board of Governors