A West New York financial advisor received a 41-month prison sentence for a $4 million healthcare fraud conspiracy he was convicted of in December, U.S. Attorney Philip Sellinger announced.
By John Heinis/Hudson County View
Kaival Patel, 55, of West New York, was convicted of one count of conspiracy to commit wire fraud and health care fraud, four counts of health care fraud, one count of conspiracy to commit money laundering by transacting in criminal proceeds, and five counts of money laundering by transacting in criminal proceeds following an 11-day trial.
The trial was before before U.S. District Judge Robert B. Kugler and U.S. District Judge Edward S. Kiel imposed the sentence today in Camden federal court.
“This defendant lined his own pockets by taking advantage of health insurance plans for New Jersey state and local government employees, defrauding them of millions of dollars by conspiring to obtain reimbursements for medically unnecessary compound prescription medications,” Sellinger said in a statement.
“Together with our law enforcement partners, we will continue to investigate and prosecute those who abuse and defraud the health care system.”
Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Compounded medications require a prescription from a physician, court documents show.
Patel created and operated a company called ABC Healthy Living LLC to market compound prescription medications.
Patel and his conspirators learned that certain state and local government employees had insurance that would reimburse up to thousands of dollars for a one-month supply of certain compound medications such as vitamins, scar creams, pain creams, libido creams, and acid reflux medications.
He and a conspirator approached Patel’s family member, a medical doctor who owns and operates a clinic in Newark and convinced him to authorize prescriptions for the compound medications for patients who had no medical need for the prescriptions.
Patel received commissions for the compound medication prescriptions.
Additionally, he and his conspirators paid a group of corrections officers to go to Patel’s family member’s medical practice for the purpose of receiving fraudulent prescriptions.
Patel conspired with a compounding pharmacist to add unnecessary ingredients to the compound medications to further increase their cost and augment his illicit profits.
Furthermore, he engaged in a series of financial transactions to receive proceeds from the health care fraud and wire fraud conspiracy. To date, approximately 48 people have been convicted or pleaded guilty in the overarching conspiracy.
In addition to the prison term, Kiel sentenced Patel to three years of supervised release and ordered him to pay restitution of $4.72 million.
Sellinger credited special agents of the FBI’s Atlantic City Resident Agency, special agents of IRS – Criminal Investigation, and the U.S. Department of Labor, Office of Inspector General, Northeast Region, with the investigation leading to the sentencing.
The government is represented by Assistant U.S. Attorneys Daniel A. Friedman of the Criminal Division and R. David Walk Jr., Deputy Chief of the Criminal Division.
