California Insurance Commissioner Dave Jones and Orange County District Attorney Tony Rackauckas on Thursday announced a shutdown of a $40 million fraudulent medical billing and kickback operation and the filing of charges against more than two dozen doctors, pharmacists and business owners.
Tanya Moreland King, 37, and her husband Christopher King, 38, both of Beverly Hills, own medical billing and medical management companies Monarch Medical Group, Inc., King Medical Management, Inc. and One Source Laboratoires, Inc.
The Kings are accused of masterminding a complex insurance fraud scheme of recruiting doctors and pharmacists to prescribe unnecessary treatment for workers’ compensation insurance patients.
Irvine pharmacists Charles Bonner, 56, and Mervyn Miller, 66, owners of Steven’s Pharmacy, are accused of conspiring with the Kings by selling more than $1 million in compound creams that were not FDA approved nor have known medical benefits.
From 2011 to 2015, the defendants are charged for their part in the fraudulent scheme of billing for unnecessary creams, tests and treatments to maximize profits. More than 13,000 patients and at least 27 insurance carriers were victims in the scheme, according to the California Department of Insurance.
The CDI led the investigation with assistance from the Orange County District Attorney’s Office Bureau of Investigation, the FBI and the National Insurance Crime Bureau.
Roughly $23.2 million was paid out to the defendants, but a total of $40 million was billed to insurers, according to the CDI.
The Kings are accused of making oral and written agreements with doctors across the state by paying them each time they prescribed a compound cream or oral medication or ordered a urine drug test. The doctors or the companies connected to them are accused of labeling the payments “marketing expenses” to conceal the kickbacks. The Kings are accused of rewarding doctors who provided higher volume by paying for office technicians.
The Kings are accused of working with pharmacist and co-defendant Charles Bonner, owner of Stevens 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 accused of purchasing repackaged oral pain medications from two companies: NuCare Pharmaceuticals in Orange and A-S Medication Solutions in Costa Mesa.
Using their company Monarch Medical Group as a cover, the Kings allegedly repackaged the medications sent directly to the physicians involved in the scam.
As the doctors dispensed the medication, the bar code on the packaging was scanned, notifying the Kings, according to the CDI.
The Kings are accused of billing workers’ comp 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 pre-arranged agreement.
The Kings allegedly provided technical staff to participating physician’s offices through their company One Source Labs. 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 reportedly 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, according to the CDI.
“The Kings and their co-conspirators played with patients’ lives, buying and selling them for profit without regard to patient safety,” Jones said in a statement. “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.”
The defendants are:
Tanya King, 37, Beverly Hills Dr. William Pistel, 53, Modesto
Christopher King, 38, Beverly Hills Dr. Kevin Park, 49, Buena Park
Charles Bonner, RPh., 56, Irvine Dr. Kourosh Shamlou, 49, Newport Coast
Mervyn Miller, RPh., 66, Irvine Dr. Mannie Joel, 67, Pleasanton
Rafael Chavez, P.A., 53, Apple Valley Dr. Parvez Fatteh, 46, Pleasanton
Dr. Jerome Robson, 68, Modesto Dr. Robert Fenton, 68, Ranchos Palos Verdes
Dr. Eric Schmidt, 63, Santa Rosa Dr. Michael Henry, 61, Granite Bay
Dr. Chris Chen, 55, Pleasanton Dr. Howard Oliver, 70, Long Beach
Dr. Duke Ahn, 49, Los Alamitos Dr. Eduardo T. Lin I, 55, Pleasanton
Dr. Robert E. Caton, 65, Modesto Dr. Paul Kaplan, 76, Folsom
Dr. Ismael Silva Jr., 63, Newport Coast Dr. Mohamed Ibrahim, 40, Danville
Dr. Ismael Geli Silva, 38, Huntington Beach Dr. Jonathan Cohen, 57, Modesto
Dr. Paul A. Stanton, 54, Victorville Dr. John Casey Jr., 65, Modesto