LOS ANGELES – Three people linked to a Glendale medical clinic – including a doctor who took money to let his name be used thousands times on bogus prescriptions – were found guilty today of federal fraud charges related to a $20 million scheme to defraud Medicare and Medi-Cal, according to the U.S. Justice Department.
The defendants fraudulently prescribed expensive anti-psychotic medications and then re-billing the government for those drugs over and over, authorities said.
It was the largest case of its kind in Southern California – tabbed Operation “Psyched Out” – that was brought against defendants who bilked Medicare Part D.
The victims included elderly Vietnamese beneficiaries of Medicare or Medi-Cal, military veterans who were recruited from drug rehab programs, and denizens of Skid Row.
The scheme generated fraudulent billings of more than $20 million dollars, of which Medi-Cal and Medicare actually paid more than $8 million.
After the verdicts were read, U.S. District Judge S. James Otero, who presided over the three-week trial, called the scope of the fraud “breathtaking,” adding that the defendants “preyed upon the poor [and] used them as pawns.”
The three defendants convicted today are:
- Dr. Kenneth Johnson, 47, of Ladera Heights, who served as the face of Manor with pharmacists and auditors from Medicare and Medi-Cal, and who pre-signed thousands of blank prescriptions that were filled out by co-conspirators;
- Nuritsa Grigoryan, 49, of Glendale, who holds an Armenian medical license and who pretended to be an American doctor when she saw homeless “patients” at the clinic and filled out the bogus prescriptions pre-signed by Dr. Johnson; and
- Artak Ovsepian, 32, of Tujunga, one of the leaders of the conspiracy who oversaw the acquisition of drugs at pharmacies using the bogus prescriptions.
According to evidence, operators of Manor Medical Imaging in Glendale operated a clinic authorized to make claims to Medicare and Medi-Cal, employed an unlicensed medical practitioner to write bogus prescriptions using an American doctor’s name and license number.
They had close relationships with pharmacies and a fraudulent drug wholesale company that were used to funnel prescription drugs back to the pharmacies participating in the scheme.
Members of the conspiracy created or doctored patient files to make it falsely appear the drugs were necessary and the patients were legitimately treated.
After the prescriptions were filled at pharmacies and paid for by Medicare and Medi-Cal, authorities said they were sold on the black market and redistributed to pharmacies. The drugs would then be subject to new claims made to Medicare and Medi-Cal as though they were new bottles of drugs, officials said.
Following the reading of the verdicts, U.S. District Judge S. James Otero, who presided over the three-week trial, said, “The scope of the fraud was breathtaking.” Judge Otero said the defendants “preyed upon the poor [and] used them as pawns.”
Judge Otero is scheduled to sentence Grigoryan and Ovsepian on June 9. Johnson is scheduled to be sentenced on June 30.
A fourth defendant who went to trial – Artyom Yeghiazaryan, a driver who took beneficiaries to pharmacies – was acquitted by the jury.
With today’s verdicts, a total of 16 defendants charged in 2011 have now been convicted of various charges related to the health care fraud scheme.