Healthcare Compliance Perspective:
License, exclusion, credentialing checks are essential to detect and prevent fraud, waste and abuse.
*From the U.S. Attorney’s Office Central District of California*
LOS ANGELES – The operators of seven sham medical clinics were among 12 defendants taken into custody last week on federal drug trafficking charges that allege they diverted at least 2 million prescription pills – including oxycodone and other addictive and dangerous narcotics – to the black market.
Two indictments returned late last month by a federal grand jury alleges that members of the conspiracy profited from illicit prescriptions that were issued without any legitimate medical purpose through a series of clinics that periodically opened and closed in a “nomadic” style. The fraudulent prescriptions allegedly allowed the conspirators to obtain bulk quantities of prescription drugs that were sold on the street.
Those arrested this morning include an Encino man who is charged with leading the scheme and controlling six of the sham clinics. He allegedly hired corrupt doctors who allowed the conspirators to issue fraudulent prescriptions under their names in exchange for 
kickbacks.
The unsealed indictments and search warrants executed last week describe how the leader of the scheme would “rent out recruited doctors to sham clinics.” He allegedly supplied corrupt doctors in exchange for kickbacks derived from proceeds generated when the other sham clinics created fraudulent prescriptions or submitted fraudulent bills to health care programs. The conspirators also allegedly stole the identities of doctors who refused to participate in the scheme. One doctor was described as being paid to sit at home while thousands of narcotic pills were prescribed in that doctor’s name and Medicare was billed more than $500,000 for purported patient care.
There are two additional people being sought besides the 12 who were arrested.
