Doctor Gets 9 Years for Role in $20M Billing Fraud

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By David McAfee

Jan. 7 — The medical doctor who served as the face of a “sham medical clinic” in Southern California was sentenced Jan. 6 to nine years in federal prison for his part in an alleged scheme to defraud the Medicare and Medi-Cal programs by fraudulently billing for more than $20 million in anti-psychotic medications, prosecutors announced.

Judge S. James Otero of the Central District of California ordered Dr. Kenneth Johnson, who was found guilty of pre-signing thousands of prescriptions for Manor Medical Imaging, to spend nine years in prison for his role in the plot. The prosecution said Otero cited the “significant loss” and said the sentence was necessary to “deter others from engaging in this type of conduct, especially physicians.”

U.S. Attorney Eileen M. Decker emphasized Johnson's importance to the overall scheme.

“Dr. Johnson essentially sold his prescription pad when he became part of the conspiracy that defrauded the government out of millions of dollars,” Decker wrote in a Jan. 6 statement. “Johnson played a crucial role in this scheme, which could not have functioned without his medical license lending an air of legitimacy to the clinic.”

Johnson is one of three co-conspirators to be found guilty after a trial in 2014, and one of 16 defendants convicted in the scam. The government said Medi-Cal and Medicare, which were re-billed repeatedly as part of the novel anti-psychotic medication scheme, paid out more than $9 million on the fraudulent claims.

Guilty Verdict

On Feb. 18, 2014, a jury convicted Johnson and two others of health-care fraud conspiracy, aggravated identity theft, conspiracy to misbrand pharmaceutical drugs, false statements to the federal government and conspiracy to use other persons’ identification documents in furtherance of fraud. Johnson was accused of pre-signing thousands of blank prescriptions that were filled out by co-conspirators (34 HCDR, 2/20/14).

The other two defendants found guilty alongside Johnson were Nurista Grigoryan, who had an Armenian medical license and pretended to be an American doctor, and Artak Ovsepian, who oversaw the acquisition of drugs at pharmacies using the fraudulent prescriptions. Ovsepian received a 15-month prison term in July (140 HCDR, 7/22/15) while Grigoryan fled the U.S. and remains a fugitive, according to prosecutors.

Lianna “Lili” Ovsepian, another leader of the conspiracy and Artak Ovsepian's sister, previously pleaded guilty in the case and received an eight-year prison sentence. Lili Ovsepian was the manager and owner of Manor Medical in Glendale, Calif.

‘Ineffective Assistance of Counsel.’

Angel Navarro of the Law Office of Angel Navarro, who represents Johnson, said he did not represent his client at trial and was only appointed “after his prior counsel stopped practicing law.”

“I filed a motion for a new trial based on ineffective assistance of counsel,” Navarro told Bloomberg BNA in a Jan. 7 e-mail, adding that the defendant's previous lawyer suffered from Alzheimer's disease. “The court denied my motion.”

Navarro also noted that they will be filing an appeal in the case.

The government is represented by U.S. Attorney Eileen M. Decker and Assistant U.S. Attorneys Lawrence S. Middleton, Benjamin R. Barron and Jennifer L. Williams. Johnson is represented by Angel Navarro of the Law Office of Angel Navarro.

To contact the reporter on this story: David McAfee in Los Angeles at

To contact the editor responsible for this story: Janey Cohen at

For More Information 
The government's most recent sentencing brief is at