Pharmacist/Pharmacy Owner Sentenced to 17 Years for Health Care Fraud, Drug Offenses

A 50-year-old Canton pharmacist who owned and operated 26 pharmacies in the metro-Detroit area was sentenced today to 17 years in prison, U.S. Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Robert D. Foley, III, Special Agent in Charge, Federal Bureau of Investigation; Robert Corso, Special Agent in Charge, Drug Enforcement Administration; and Lamont Pugh, Special Agent in Charge of the Inspector General of the Department of Health and Human Services.

U.S. District Judge Arthur J. Tarnow sentenced Babubhai “Bob” Patel on 26 convictions for a health care fraud conspiracy, a drug conspiracy, and related fraud and drug violations.

Evidence presented at a six-week jury trial concluding in August 2012 showed between 2006 and 2011, the pharmacies billed Medicare and Medicaid more than $57 million. At least 25 percent of those billings were for drugs that were either medically unnecessary never dispensed. Additional amounts were fraudulently billed to private insurers such as Blue Cross Blue Shield of Michigan. The pharmacies operated on a business model that paid kickbacks to physicians in exchange for writing prescriptions for expensive medications. The affiliated doctors would also write prescriptions for controlled substances, without regard to medical necessity, which would be filled at the pharmacies and distributed to paid “patients” and patient recruiters. The expensive, non-controlled medications would be billed but not dispensed.

In sentencing the defendant, the court told the defendant that “what you have done is reprehensible.” The criminal conduct engaged in by other health care fraud violators sentenced by the court was “small scale compared to this.”

“Taxpayers fund Medicare and Medicaid to provide health care to needy Americans,” McQuade said. “It is gratifying to see courts impose strong sentences on defendants who exploit these programs for personal gain.”

FBI Special Agent in Charge Foley stated, “Those individuals who engaged in this health care fraud scheme stole millions of dollars over several years from a system designed to provide health care to those in need. The FBI is committed to stopping these illegal acts and prosecuting these criminals.”

“The conduct that occurred in this case was deplorable, inexcusable, and dangerous,” said Lamont Pugh, III, Special Agent in Charge of the Chicago Region of the U.S. Department of Health and Human Services, Office of Inspector General. “The OIG will continue to work with our law enforcement partners to combat prescription drug fraud in the Medicare and Medicaid programs and seek to ensure the safety of program beneficiaries and taxpayer dollars.”

Of the 26 defendants charged in the original indictment in this case, 20 defendants have either pleaded guilty or been convicted at trial. Six defendants are scheduled for trial in June. Out of 12 pharmacists charged, 11 have been convicted at trial or pleaded guilty, with one waiting to be tried. Out of four doctors charged, two have pleaded guilty, with two waiting to be tried.

Earlier this week, Judge Tarnow sentenced several of the other pharmacists who were convicted at trial. Brijesh Rawal, 36, of Canton; Ashwini Sharma, 34, of Novi; and Lokesh Tayal, 36, of Northville, were each sentenced to terms of imprisonment of 68 months for their participation as pharmacists in these criminal offenses. These three pharmacists were non-U.S. citizens who entered the United States under a visa program for certain skilled workers, and each will be deported to the country of their citizenship upon the completion of their sentences. Defendant Rawal is a citizen of Canada, while defendants Sharma and Tayal are citizens of India.

In addition to the prison sentence, defendant Babubhai Patel was ordered to pay restitution to the Medicaid and Medicare programs in the amount of $17.3 million and restitution to Blue Cross Blue Shield in the amount of $1.5 million. Defendant Patel, who has been held without bond since his arrest on August 2, 2011, will receive credit toward his sentence for the time he has served.

U.S. Attorney McQuade thanked the Drug Enforcement Administration; the FBI; the Department of Human Services, Office of Inspector General; and Blue Cross and Blue Shield of Michigan for their tireless work in the investigation and prosecution of the case. The case is being prosecuted by Assistant United States Attorneys John K. Neal and Wayne F. Pratt.