Los Angeles Jury Convicts Medical Clinic Owner For Health Care Fraud and Tax Fraud

            LOS ANGELES – A federal jury in Los Angeles has convicted the owner of a medical clinic for his role in a health care fraud scheme and for filing false income tax returns.

            Michael Huynh, 57, of Encino, was convicted yesterday of one count of conspiracy to commit health care fraud and 11 counts of filing false tax returns after a seven-day trial before United States District Judge Otis D. Wright II. Huynh will be sentenced on January 30, 2017.

            Evidence introduced at trial showed that Huynh, the office manager and part-owner of a medical clinic, provided false prescriptions to a pharmacist and co-conspirator, Farhad N. Dany Sharim, who submitted false claims to insurance companies for drugs that were never dispensed. Once Sharim received payments from the insurance companies, he paid Huynh for the false prescriptions. Trial evidence also showed that, between January 2004 and November 2009, Huynh received 82 checks from Sharim totaling over $1.1 million. Huynh filed false federal tax returns for tax years 2007 through 2011 that underreported by over $1.6 million in total the medical clinic’s gross receipts and sales on the corporate tax returns and income on the individual tax returns.

            “This defendant played an integral role in a health care fraud scheme that netted over $1 million for drugs that were never prescribed or delivered,” said United States Attorney Eileen M. Decker. “Such massive fraudulent conduct impacts everyone who seeks medical care and who pays for health insurance, since it undermines the integrity of our health care system and preys on vulnerable members of our community. For that, this defendant and his co-conspirator must be held accountable.”

            Sharim pleaded guilty to one count of conspiracy to commit health care fraud on November 18, 2013, and will be sentenced on December 5.

            “The defendant carried out this fraud at the expense of many, to include his own family members whose identities were used to camouflage the scheme, as well as the patients at his clinic, many of whom are immigrants and did not know their insurance was being billed by a pharmacy they did not go to by a prescribing doctor they did not see, and for medications they did not receive,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Health care fraud investigators and prosecutors did an outstanding job of delivering justice to the defendant’s victims, including the patients at his clinic and the insurance companies who suffered losses.”

            “The frauds engaged in by Mr. Huynh, both income tax fraud and health care fraud, have impacted programs that Americans depend upon as a part of their daily lives. These very same frauds have resulted in Mr. Huynh’s conviction,” stated IRS-Criminal Investigation Acting Special Agent in Charge Anthony J. Orlando. “Along with our law enforcement partners, IRS-Criminal Investigation is committed to bringing those who fraudulently take advantage of our nation’s programs to justice.”

            The Federal Bureau of Investigation, IRS-CI and the Office of Personnel Management’s Office of Inspector General investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office of the Central District of California and the Department of Justice’s Fraud Section.  Assistant United States Attorney Steven Arkow and Fraud Section Trial Attorney Alexis Gregorian prosecuted the case.

            Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,900 defendants who have collectively billed the Medicare program for more than $10 billion.  In addition, the Health and Human Services Centers for Medicare & Medicaid Services, working in conjunction with the Health and Human Services’ Office of Inspector General, are taking steps to increase accountability and decrease the presence of fraudulent providers.

            “This conviction should act as a warning to those who believe they can defraud the government with impunity,” said Special Agent in Charge Scott Rezendes of the Office of Personnel Management Office of Inspector General (OPM-OIG). “The OPM Office of the Inspector General is committed to holding such individuals accountable for their actions.”

            At sentencing, Huynh faces a statutory maximum sentence of 38 years in federal prison – five years for the conspiracy count and three years for each of 11 tax fraud counts. Sharim faces a maximum sentence of five years in federal prison.