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Two Indians in US plead guilty to massive health care fraud causing loss of $7 million

Thursday, 21 August 2014 - 7:42pm IST | Place: WASHINGTON | Agency: PTI

Two Indian pharmacists working in the US have pleaded guilty to a massive health care fraud, causing a loss of up to $7 million to the district of Maryland.

Vipin Kumar Patel, 30, and Jigar Patel, 27, both of whom are licensed pharmacists and working in the US under H1-B visa, now faces a maximum sentence of five years of imprisonment for making a false statement in a health care matter, the US Justice Department said.

According to their plea agreements, the Patels held the positions of pharmacy technician and lead pharmacy technician, starting at $10 per hour and eventually became salaried employees, making approximately $1,400 biweekly.

In addition, the Patels were provided with housing and transportation, making their total salary and benefits between $70,000 and $120,000. The value of the housing and transportation benefits were not disclosed on the Patels' income tax returns, federal prosecutors alleged.

The Patels admitted that they billed insurance programmes for prescription refills when the pharmacy customers had not requested the refill. As soon as a prescription was eligible for refill, the Patels would cause a false claim to be electronically submitted to a health care benefit program.

These refills were often billed and filled without the customer's knowledge, federal prosecutors said, adding that the medications targeted for automatic refills were typically expensive HIV and cancer medications used by very ill customers.

The claims for payment were not reversed when the customers did not receive the medications, which they had not requested at the first place. The Patels also knew that medications filled but not delivered to the customer—usually because they had not requested the refill—were placed back on the shelves at the pharmacy to be re-used to fill other prescriptions, the US Department of Justice said in a statement.

The Patels did not receive the profits from the fraud scheme directly, but were able to keep their jobs at Pharmacare and lawfully remain in the US their H1-B visas. The loss to the health care benefit programs to date is between $2.5 million and $7 million, the statement said.

Also another Indian American Reddy Vijay Annappareddy, 46, is scheduled to go to trial on November 11, on charges of health care fraud and aggravated identity theft in connection with the scheme.

If convicted, Annappareddy faces a maximum sentence of 10 years in prison for health care fraud and a mandatory minimum of two years in prison, consecutive to any other sentence imposed, for aggravated identity theft, plus a $250,000 fine.




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