July 21, 2014

Jury Convicts 38th Defendant in Health Care Fraud Scheme

The owner of a Livonia home health care agency and several pharmacies was convicted of health care fraud charges Friday after a seven-day jury trial, United States Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Acting Special Agent in Charge James V. Allen, Drug Enforcement Administration, Special Agent in Charge Paul Abbate, Federal Bureau of Investigation, and Lamont Pugh, III, Special Agent in Charge, Department of Health and Human Services Office of Inspector General (“HHS-OIG”).

Vinod Patel, 41 of Canton, was the 38th defendant convicted out of the 39 defendants charged in a massive health care fraud and drug distribution scheme overseen by his brother, pharmacist Babubhai (“Bob”) Patel. The remaining defendant is a fugitive.

Vinod Patel was convicted of conspiracy to commit health care fraud and conspiracy to pay health care kickbacks after a jury trial before U.S. District Judge Arthur J. Tarnow. Evidence at trial demonstrated that Vinod Patel owned Livonia-based First Michigan Home Health Care, Inc., along with his brother Babubhai Patel and a third co-conspirator. In his capacity as an owner of this agency, Vinod Patel routinely paid kickbacks to doctors, medical staff and patient recruiters in exchange for referrals to First Michigan. Evidence produced at trial also demonstrated that Vinod Patel managed several corrupt pharmacies for his brother in and around Saginaw and Bay City.

United States Attorney Barbara L. McQuade stated, “Babubhai Patel’s criminal organization stole millions of dollars from the Medicare and Medicaid programs, depriving these critical programs of needed revenue. Dismantling organizations such as Patel’s is a high priority for this office, and we hope that prosecutions like this one will deter medical professionals and others from participating in schemes to enrich themselves at taxpayers’ expense.”

Babubhai Patel, formerly of Canton, Michigan, was a pharmacist and pharmacy owner who was the mastermind of a fraudulent scheme that involved 26 pharmacies, nine doctors and two home health care agencies. The Patel Pharmacies billed the Medicare and Medicaid programs for more than $60 million between 2006 and 2011, and also distributed more than 250,000 dosage units of oxycodone and 4 million dosage units of hydrocodone during this time frame.

Babubhai Patel was convicted, along with five co-conspirators, after a seven-week trial that ended in August of 2012. He was sentenced to 17 years in prison.

The trial that concluded on Friday was the fourth trial in the case, and the 13th conviction secured by a jury verdict. Twenty-five other defendants in the case entered guilty pleas to charges arising out of their involvement with Babubhai Patel’s criminal organization. Those convicted in the case include nine doctors, 15 pharmacists, three home health agency owners, an accountant and a psychologist.

The case was prosecuted by Assistant United States Attorneys John K. Neal and Wayne F. Pratt.