Stay ahead of developments in federal and state health care law, regulation and transactions with timely, expert news and analysis.
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.
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.
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 email@example.com
To contact the editor responsible for this story: Janey Cohen at firstname.lastname@example.org
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)