Man Charged With $10M Health Care Fraud, Kickback Scheme

PELHAM MANOR, New York—Damian Williams, the United States Attorney for the Southern District of New York, and Naomi Gruchacz, the Special Agent in Charge of the New York Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), announced the unsealing of a five-count Indictment charging Manishkumar Patel in connection with a health care fraud and kickback scheme involving the sale of fraudulent prescriptions. Patel was arrested in Pelham Manor, New York, and was presented before the U.S. Magistrate Judge Gary Stein. The case is assigned to U.S. District Judge Schofield.

As alleged in the indictment, between 2019 and 2022, Patel and a coconspirator (“CC-1”) fraudulently sold prescriptions and doctors’ orders for durable medical equipment (DME), pharmaceuticals and laboratory tests (collectively, “scripts”) to DME suppliers, pharmacies and laboratories (collectively, the “Medicare Providers”).

Patel obtained the scripts from call centers that called Medicare beneficiaries and asked them perfunctory questions designed to justify a script that would be reimbursed by Medicare. Patel turned the information from those calls into scripts by, variously: (i) arranging cursory telemedicine appointments with the beneficiaries; (ii) a practice called “doctor chasing,” in which the information was sent to a doctor who signed the script without seeing the patient and who was frequently unaware of what they were signing; and (iii) obtaining forged scripts. Patel then sold the scripts to Medicare Providers, which filled the orders and billed Medicare. 

Because the scripts were fraudulently obtained, many beneficiaries rejected the items they were sent by the Medicare Providers, many doctors threatened to report Patel for fraud, and Medicare frequently refused to pay for the scripts.

The Medicare Providers made payments to Patel for the scripts in violation of the Anti-Kickback Statue. Patel and the Medicare Providers entered into sham contracts for generic marketing services at flat rates in an attempt to conceal their illegal kickback scheme.

“As alleged, Manishkumar Patel ran a scheme to get rich by generating fraudulent prescriptions used to bill Medicare for millions of dollars in unnecessary healthcare expenses,” U.S. Attorney Damian Williams said. “Today’s charges send a message: our office and our law enforcement partners are dedicated to holding accountable anyone who tries to rip off critical health care programs like Medicare.”

Patel, 44, of Pelham Manor, New York, is charged with (i) conspiracy to commit health care fraud and wire fraud, which carries a maximum sentence of 20 years in prison; (ii) health care fraud, which carries a maximum sentence of 20 years in prison; (iii) wire fraud, which carries a maximum sentence of 20 years in prison; (iv) conspiracy to violate the Anti-Kickback Statute, which carries a maximum sentence of five years in prison; and (v) violation of the Anti-Kickback Statute, which carries a maximum sentence of five years in prison. 

“Certain violations of the Anti-Kickback Statute can result in the inducement of medically unnecessary durable medical equipment, medications and laboratory tests, which can affect the availability of services for others and drive up the cost of health care for everyone,” said HHS-OIG Special Agent in Charge Naomi Gruchacz. “Individuals and entities that participate in the federal health care system are required to obey the laws meant to preserve the integrity of program funds and the provision of appropriate, quality services to patients.”