26 doctors, pharmacists and business owners charged in $40 million kickback scheme
News: 2017 Press Release
ORANGE COUNTY, Calif. — Insurance Commissioner Dave Jones and Orange County District Attorney (OCDA) Tony Rackauckas announced a shutdown of a $40 million fraudulent medical billing and kickback operation with 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 defendants 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, RPh., 56, and Mervyn Miller, RPh., 66, both owners of Steven's Pharmacy, are accused of conspiring with Christopher and Tanya King by selling more than $1 million in compound creams that were not FDA approved nor have known medical benefits.
"The Kings and their co-conspirators played with patients' lives, buying and selling them for profit without regard to patient safety," said Commissioner Dave Jones. "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 Orange County District Attorney's Office will continue to be a leader in the state in prosecuting these types of crimes, because they affect the health of our economy and wellness of our bodies," stated OCDA Rackauckas. "In order for the system to survive, we must have ethical doctors who abide by their Hippocratic Oath to 'do no harm.' The intent of many of the laws surrounding the insurance industry is to keep the three Ps – Physician – Patients – and Profit separate. We have a track record of putting these types of fraudsters behind bars for a long time and we intend to do just that again," Rackauckas concluded.
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. The California Department of Insurance led the investigation with assistance from the Orange County District Attorney's Office Bureau of Investigation, the FBI, and the National Insurance Crime Bureau. Approximately $23.2 million was paid out to the defendants, but a total of $40 million was billed to insurers.
Circumstances of the CaseThe Kings are accused of making oral and written agreements with doctors across the state 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" in an attempt to conceal the kickbacks. The Kings are accused of rewarding doctors who provided higher volume by paying for office technicians.
Snake Oil Scam
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.
Medication Kickback Scam
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 are accused of repackaging meds 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. The Kings are accused of billing workers' compensation insurance 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.
Bogus Urine Test Scam
The Kings are accused of providing 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 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.
Tanya King, 37, Beverly Hills
Christopher King, 38, Beverly Hills
Charles Bonner, RPh., 56, Irvine
Mervyn Miller, RPh., 66, Irvine
Rafael Chavez, P.A., 53, Apple Valley
Dr. Jerome Robson, 68, Modesto
Dr. Eric Schmidt, 63, Santa Rosa
Dr. Chris Chen, 55, Pleasanton
Dr. Duke Ahn, 49, Los Alamitos
Dr. Robert E. Caton, 65, Modesto
Dr. Ismael Silva Jr., 63, Newport Coast
Dr. Ismael Geli Silva, 38, Huntington Beach
Dr. Paul A. Stanton, 54, Victorville
Dr. William Pistel, 53, Modesto
Dr. Kevin Park, 49, Buena Park
Dr. Kourosh Shamlou, 49, Newport Coast
Dr. Mannie Joel, 67, Pleasanton
Dr. Parvez Fatteh, 46, Pleasanton
Dr. Robert Fenton, 68, Ranchos Palos Verdes
Dr. Michael Henry, 61, Granite Bay
Dr. Howard Oliver, 70, Long Beach
Dr. Eduardo T. Lin I, 55, Pleasanton
Dr. Paul Kaplan, 76, Folsom
Dr. Mohamed Ibrahim, 40, Danville
Dr. Jonathan Cohen, 57, Modesto
Dr. John Casey Jr., 65, Modesto
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- Charging document
- Tanya Moreland King complaint document
- Christopher King complaint document
- Mervyn Miller and Charles Bonner complaint document
- Ismael Silva Jr. and Ismael Geli Silva complaint document
- Christopher Chen MD complaint document
- Slideshow from press conference
- Photos from CDI's Flickr
- Video streamed live on April 20, 2017 news conference
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.