Lining the Pockets: Indian American Man Convicted on 11 Counts in Multimillion-Dollar Health Care Fraud Case
- Kaival Patel, 54, of West New York, New Jersey, created and operated a company called ABC Healthy Living LLC to market compound prescription medications.
An Indian American man was found guilty on 11 counts of defrauding public health insurance plans out of more than $4 million and transacting in the criminal proceeds, U.S. Attorney Philip R. Sellinger announced last week. Kaival Patel, 54, of West New York, New Jersey, was convicted on Dec. 7 of “one count of conspiracy to commit wire fraud and health care fraud, four counts of health care fraud, one count of conspiracy to commit money laundering by transacting in criminal proceeds, and five counts of money laundering by transacting in criminal proceeds,” said the announcement.
According to U.S. Attorney Sellinger, Patel “lined his own pockets by taking advantage of health insurance plans for New Jersey state and local government employees, defrauding them of millions of dollars by conspiring to obtain reimbursements for medically unnecessary compound prescription medications. Together with our law enforcement partners, we will continue to investigate and prosecute those who abuse and defraud the health care system.”
Documents filed in the case and the evidence at trial revealed that Patel created and operated a company called ABC Healthy Living LLC “to market compound prescription medications,” the DOJ said. When he learned that certain state and local government employees had insurance that would reimburse up to thousands of dollars for a one-month supply of certain compound medications, they approached Patel’s family member, a medical doctor who owns and operates a clinic in Newark, New Jersey.
They convinced him to authorize prescriptions for the compound medications for patients who had no medical need for the prescriptions, for which Patel received commissions. They paid a group of corrections officers to go to Patel’s family member’s medical practice for the purpose of receiving fraudulent prescriptions. He conspired with a compounding pharmacist to add unnecessary ingredients to the compound medications to further increase their cost and augment his illicit profits. He also engaged in a series of financial transactions to receive proceeds from the health care fraud and wire fraud conspiracy.
On the count of conspiracy to commit wire fraud and health care fraud, Patel faces a maximum penalty of 20 years in prison and a fine of $250,000 fine, or twice the gross pecuniary loss from the offense, whichever is greatest. On each of the remaining 10 counts, he faces a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross pecuniary gain or loss from the offense, whichever is greatest. Sentencing is scheduled for April 10, 2024.