A 54-year-old Indian-American residing in West New York, New Jersey, has been found guilty on 11 counts related to defrauding public health insurance plans of over $4 million and engaging in transactions involving criminal proceeds, according to authorities.
Kaival Patel was convicted on December 7, including one count of conspiracy to commit wire fraud and health care fraud, along with four counts of health care fraud. The US Justice Department, in a statement last week, noted Patel’s involvement in the creation and operation of ABC Healthy Living LLC, a company focused on marketing compound prescription medications.
The charges also revealed that Patel and his collaborators targeted a family member who is a medical doctor within the Indian-American community. This family member, owning and operating a clinic in Newark, was persuaded to authorise prescriptions for compound medications for patients who did not have a medical need for them.
Patel and his associates received commissions for these compound medication prescriptions, as stated in the released information.
Certain state and local government employees with insurance are set to receive reimbursements, ranging up to thousands of dollars, for a one-month supply of specific compound medications, including vitamins, scar creams, pain creams, libido creams, and acid reflux medications.
Kaival Patel, in collaboration with a compounding pharmacist, orchestrated a conspiracy to add unnecessary ingredients to these compound medications, inflating their cost and boosting his illicit profits.
To facilitate the health care fraud and wire fraud conspiracy, Patel engaged in a series of financial transactions, according to the statement. Attorney Philip R. Sellinger confirmed Patel’s conviction, which followed an 11-day trial before US District Judge Robert B. Kugler.
The accused exploited health insurance plans for New Jersey state and local government employees, defrauding them of millions of dollars by orchestrating a scheme to obtain reimbursements for medically unnecessary compound prescription medications, stated the official release.
Tammy L Tomlins, Special Agent in Charge of IRS – Criminal Investigation, Newark Field Office, emphasised, “The defendant enriched himself by defrauding the New Jersey public health insurance plans out of more than $4 million.”
She credited today’s conviction to the diligent investigative efforts of IRS-CI Special Agents and law enforcement partners, underscoring their commitment to safeguarding the integrity of healthcare systems.
Regarding the charges of conspiracy to commit wire fraud and health care fraud, Patel could face a maximum penalty of 20 years in prison, coupled with a fine of $250,000 or double the gross pecuniary loss from the offence, whichever is greater.
For each of the remaining 10 counts, the defendant is confronted with a potential maximum penalty of 10 years in prison, in addition to a fine of $250,000 or double the gross pecuniary gain or loss from the respective offence, with the higher amount being applicable. The sentencing for Kaival Patel is slated for April 10 next year.
