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Thirteen Individuals Indicted in Prescription Drug Distribution Scheme and Health Care Fraud

“ Five doctors, four pharmacists, and a home health agency owner among those indicted in follow-up to the Babubhai Patel case

MAR 19 (DETROIT) –A superseding indictment returned by a federal grand jury in Detroit was unsealed yesterday morning, charging thirteen individuals for their participation in a large-scale health care fraud and drug distribution scheme, United States Attorney Barbara L. McQuade announced today.  McQuade was joined in her announcement by Special Agent in Charge Robert L. Corso of the U.S. Drug Enforcement Administration (DEA), Special Agent in Charge Robert D. Foley III, of the Federal Bureau of Investigation, and Lamont Pugh, Special Agent in Charge of the Inspector General of the Department of Health and Human Services. The superseding indictment adds thirteen new defendants and a variety of new charges to an indictment originally returned in August 2011, which charged Canton Pharmacist Babubhai ‘Bob” Patel with overseeing a massive health care fraud and drug distribution ring at the twenty-plus pharmacies that he owned and controlled in and around Detroit.

The twenty-one-count superseding indictment alleges that Babubhai Patel was the beneficial owner and controller of approximately twenty-six pharmacies statewide (referred to in the indictment as “the Patel Pharmacies”).  The indictment alleges that Babubhai Patel would offer and provide kickbacks, bribes, and other illegal benefits to physicians, in order to induce those physicians to write prescriptions for patients with Medicare, Medicaid, and private insurance, and to direct that those prescriptions be presented to one of the Patel Pharmacies for billing.  In exchange for their kickbacks and inducements, the physicians would write prescriptions for the patients, and bill the relevant insurers for services supposedly provided to the patients, without regard to the medical necessity of those prescriptions and services.  The physicians would direct the patients to fill their prescriptions at one of the Patel Pharmacies. There, according to the indictment, Babubhai Patel and his pharmacists would bill insurers, including Medicare, Medicaid, and private insurers, for dispensing the medications, despite the fact that the medications were medically unnecessary and, in many cases, never provided.  Patients were recruited into the scheme by patient recruiters or “marketers,” who would pay kickbacks and bribes to patients in exchange for the patients’ permitting the Patel Pharmacies (and the physicians associated with Patel) to bill their insurance for medications and services that were medically unnecessary and/or never provided. 

The indictment further alleges a conspiracy to distribute controlled substances at the Patel pharmacies, a purpose of which was to facilitate the submission of false and fraudulent claims to Medicare, Medicaid, and private insurers in accordance with the scheme outlined above.  According to the indictment, Babubhai Patel and his associates paid physicians associated with the scheme kickbacks and other inducements in exchange for the medical professionals writing prescriptions for controlled substances for their patients, and directing those patients to fill the prescriptions at a Patel Pharmacy.  The controlled substances involved included the Schedule II drug oxycodone (Oxycontin), the Schedule III drug hydrocodone (Vicodin, Lortab) the Schedule IV drug alprazolam (Xanax), and the Schedule V drug cough syrup with codeine.  According to the indictment, prescriptions for these drugs were written outside the course of legitimate medical practice.  Babubhai Patel and his pharmacists would then dispense the controlled drugs to patients without medical necessity. The distribution of controlled substances in this manner was intended, in part, as a kickback to the patients for agreeing to enable their insurance cards to be billed for medications purportedly dispensed at the Patel Pharmacies.  The indictment also alleges that Babubhai Patel and his pharmacists dispensed controlled substances outside the scope of legitimate medical practice to patient recruiters or “marketers,” as a kickback for their efforts in to recruit patients into the scheme. 

In addition to his pharmacies, the indictment alleges that Babubhai Patel had an ownership interest in a home health agency managed by his brother, Vinod Patel.  The indictment alleges that Vinod Patel, Babubhai Patel, and others bribed physicians and other referral sources for referrals to that home health agency, and then billed the Medicare program for home health services that were medically unnecessary and never provided.   

The thirteen new defendants named in the superseding indictment were pharmacist Mehul Patel, 34, of Canton; pharmacist Pradeep Pandya, 49, of Grand Blanc; pharmacist Vikas Sharma, 34, of Windsor; pharmacist Mukesh Khunt, 33, of Toronto; physicians Richard Utarnachitt, 71; of Clinton Township, physician Ruben Benito, 72; of Madison Heights, physician Javaid Bashir, 59, of Jackson, physician Carl Fowler, 60; of West Bloomfield, physician Rajat Daniel, 47; of West Bloomfield, home health agency owner Vinod Patel, 40; of Canton, business associate Atul Patel, 31, of Canton; marketer Anthony Macklin, a.k.a. “Jimbo,” of Detroit; and marketer Michael Thoran, a.k.a. “Ace,” also of Detroit.

Robert L. Corso, Special Agent in Charge of DEA's Detroit Field Division stated, "Confronting the illegal diversion and abuse of controlled pharmaceuticals is a top priority of DEA and our law enforcement partners.  Today's indictments, particularly of the medical professionals are significant.  It is alleged that these individuals abused their positions of trust and endangered the lives of countless people by illegally distributing opiate painkillers and depressants throughout southeast Michigan.  This investigation makes it clear that the DEA and our partners in law enforcement will continue to investigate and bring to justice those individuals that are responsible for the illegal distribution of prescription medicines."

“Taxpayers fund Medicare and Medicaid to provide health care for needy citizens,” McQuade said.  “We hope that doctors and pharmacists will take note that if they exploit these programs for personal profit, they will face serious consequences.”

FBI Special Agent in Charge Robert D. Foley, III, said, "Dishonest health care providers and pharmacists who exploit Medicare and Medicaid through fraudulent billing and other schemes will be held accountable for their crimes. The FBI remains committed to investigating this type of fraud and bringing those who abuse the system to justice."

Of the twenty-six defendants originally charged in the indictment, six, including Babubhai Patel and four pharmacists, were convicted at a trial last summer.  Fifteen additional defendants, including six pharmacists and two doctors, have pled guilty in the case.  The five remaining defendants had their charges renewed in the superseding indictment, and are presently set for trial on June 10, 2013.  On February 1, 2013, Babubhai Patel was sentenced to 17 years imprisonment by U.S. District Judge Arthur J. Tarnow. 

The investigation in this case was handled by the Drug Enforcement Administration, the Federal Bureau of Investigation, and the Department of Health and Human Services Office of Inspector General.  The case is being prosecuted by Assistant U.S. Attorneys John K. Neal and Wayne F. Pratt.

An indictment is only a charge and is not evidence of guilt.  A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt


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