LOS ANGELES – A federal judge on Monday sentenced the mastermind of a $20 million health care fraud scheme based at a Glendale medical clinic to eight years in prison for overseeing a plot to fraudulently prescribe expensive anti-psychotic medications.
Authorities said those drugs were sold back to pharmacies through the black market, where the drugs would be billed to the government again.
Lianna “Lili” Ovsepian, 33, of Tujunga, was sentenced by U.S. District Judge S. James Otero, who told the defendant: “We can’t have a situation where crime pays.”
In addition to the prison term, officials said Judge Otero ordered Ovsepian, who was the owner of Manor Medical Imaging, Inc. in Glendale, to pay $9.1 million as restitution to Medicare and Medi-Cal.
Last November, Ovsepian pleaded guilty to conspiracy to commit health care fraud and conspiracy to commit identity theft, officials said.
Ovespian along with Family Members and Others Involved in the Fraud
From September 2009 through October 27, 2011, prosecutors said Medi-Cal and Medicare was billed more than $20 million. The programs paid more than $9.1 million to pharmacies based on more than 14,000 claims submitted in relation to the scheme, prosecutors wrote in a sentencing brief filed in Ovsepian’s case.
The case involving Manor was the first one in the nation alleging an organized scheme to defraud government health care programs through fraudulent claims for anti-psychotic medications. The case is also the largest of its kind in Southern California involving a fraud targeting Medicare Part D.
Ovsepian oversaw a scheme that involved several family members and other co-conspirators, officials said. A total of 16 defendants have been convicted either through guilty pleas or by jury verdicts.
Following a trial earlier this year, officials said co-conspirator, Dr. Kenneth Johnson, Ovsepian’s mother-in-law, Nuritsa Grigoryan.and Ovsepian’s brother, Artak Ovsepian, were found guilty of a host of charges related to the scheme. Those three defendants are currently pending sentencing.
Other defendants who were charged in this case include a Pasadena couple whose Huntington Pharmacy in San Marino saw its business grew dramatically due its affiliation with Manor Medical. The owner of the pharmacy, Phic Lim, is scheduled for trial in 2015.
Evidence in this case indicated the following:
- Ovsepian’s Manor Medical Imaging, Inc. generated thousands of fraudulent prescriptions for unneeded and expensive anti-psychotic medications for “patients” who were typically low-income beneficiaries of the government-funded health care programs Medicare and Medi-Cal, and who did not need those drugs.
- The prescriptions appeared to be issued by Johnson, who pre-signed thousands of blank prescriptions that were filled out by Nuritsa Grigoryan.
- The beneficiaries who received the prescriptions were brought to pharmarcies, where the prescriptions were filled.
- The drugs were returned to Manor, the “patients” were given nominal payments, usually around $100, and the drugs were diverted into the black market, where they were sold to other pharmacies and re-billed to health care programs as though the drugs were being dispensed for the first time.
As prosecutors argued at sentencing, the beneficiaries included veterans recruited from dual diagnosis programs for drug addiction and schizophrenia, elderly Medicare beneficiaries whose identities were stolen and homeless beneficiaries recruited from skid row, according to officials.
The investigation in this case, which was called Operation “Psyched Out,” involved a myriad of local, state and federal law enforcement and other agencies.