A Houston man, aged 59, has been found guilty on all counts related to a Medicare fraud scheme with reported damages upwards of $160 million. The individual in question, Mohamad Mokbel, was convicted by a jury after less than five hours of deliberation, wrapping up a 10-day trial, according to a statement released by the U.S. Attorney’s Office.
In the intricate operation that unfolded between 2014 and 2021, Mokbel spearheaded a company named 4M Pharmaceuticals, which involved 14 pharmacies with straw owners, where he and his accomplices engaged in the illegal acquisition of patients' sensitive information, including Medicare IDs and personal health records, allegedly purchasing these from thousands of Medicare beneficiaries for prices that ranged between $16 and $40, specifically targeting vulnerable elderly diabetic patients who were reliant on testing supplies to manage their condition.
Mokbel instructed employees to fill prescriptions for high-reimbursement items such as topical creams and omega-3 pills without medical necessity, later manipulating these prescriptions to appear as if they were requested by the patients themselves, who, in truth, were often oblivious to the fact that their identities were being used in such a manner. This deceit was furthered by Mokbel's call center, which would contact the patients with misleading claims of a doctor's order for unnecessary products, later shipping these items, often placing the patients on an auto-refill system that led to substantial overbilling, as detailed by U.S. Attorney’s Office.
As the deceit spun its profitable web, Mokbel's spoils from the ploy exceeded $200 million; the strategy was not only restricted to manipulating Medicare but also involved corrupt practices with a pharmacy benefits manager, OptumRx, where Mokbel handed out bribes in order to secure preferential treatment for 4M pharmacies, a venture that saw him disburse over $188,000 in illicit funds between 2015 and 2020.
The authorities leading the crackdown on this substantial fraud included not just the FBI and IRS Criminal Investigation but also Homeland Security Investigations, the Department of Health and Human Services, the Food and Drug Administration, and the Texas Attorney General Medicaid Fraud Control Unit. Following his conviction, Mokbel awaits sentencing on January 7, 2025, and faces a substantial period of incarceration, with the potential of up to 20 years for conspiracy to commit mail fraud and health care fraud, among other charges, and the possibility of hefty fines coupled with a demanding restitution payment which may well exceed the recorded $160 million in fraudulent billings. Prosecutors Kathryn Leigh Olson and Adam Laurence Goldman led the charge in the case, and with the guilty verdict rendered, Mokbel has been taken into custody pending the sentencing next year, as per the confirmation by U.S. District Judge Lee H. Rosenthal, according to the same press release.
