A Houston man has been convicted of Medicare fraud in a scheme to fraudulently bill for expensive topical creams after a 10-day trial.
According to an Oct. 15 Department of Justice release, Mohamad Mokbel led a company called 4M Pharmaceuticals from 2014 to 2021, which operated 14 pharmacies with straw owners. A jury found that Mr. Mokbel illegally purchased data for thousands of Medicare beneficiaries, including their identification number, personal health and physician information. He targeted elderly diabetic patients who are dependent on testing supplies to manage their blood sugar levels.
Mr. Mokbel paid $16 to $40 per beneficiary. He then directed 4M employees to use the beneficiaries' patient data to run insurance claims and determine which insurance plans would cover and reimburse topical creams and other medications at a high rate in order to maximize reimbursements, with no regard for medical necessity.
Employees then faxed pre-filled prescription requests to patients' physicians, appearing to be for diabetic testing supplies, with topical creams added at the bottom. The employees also included false representations that patients were requesting a 4M Pharmacy to fill the medications, all under false pretenses.
Many physicians did not question the fax requests and signed and returned the prefilled prescription requests to 4M. Mr. Mokbels' call center in Houston and later, in Egypt, then contacted the patients, making false statements about the topical creams and their physicians' orders. 4M then shipped our numerous topical creams, frequently on auto-refill, and excessively billed Medicare, Medicaid and private insurance plans.
Mr. Mokbel made over $200 million as a result of the scheme. From 2015 through 202, he also corruptly paid a series of bribes, ranging from $2,000 to $5,000 and totaling over $188,000 to an employee of OptumRx, a pharmacy benefits manager, in exchange for favorable treatment for 4M pharmacies. 4M was credentialed and re-credentialed with OptumRx, enabling 4M to enter into retail network agreements with OptumRx and participate in the Medicare Part D program. Mr. Mokbel also received information and counsel about dealing with audits and preventing or delaying OptumRx termination of many 4M pharmacies.
Mr. Mokbel could face up to 20 years for conspiracy to commit mail fraud and health care fraud, 10 years for each five counts of health care fraud, each of six counts of money laundering and one count of bribery concerning programs receiving federal funds, in addition to five years for conspiracy to violate the Anti-Kickback Statute and conspiracy to commit bribery. He may be ordered to pay $4 million in fines and a possible restitution of $160 million.