ORANGE COUNTY, Calif. — Insurance Commissioner Dave Jones and Orange County District Attorney (OCDA) Tony Rackauckas announced a shutdown of a $40 million fraudulent medical billing and kickback operation with the filing of charges against more than two dozen doctors, pharmacists, and business owners.

Tanya Moreland King, 37, and her husband Christopher King, 38, both of Beverly Hills, own medical billing and medical management companies Monarch Medical Group, Inc, King Medical Management, Inc. and One Source Laboratories, Inc. The defendants are accused of masterminding a complex insurance fraud scheme of recruiting doctors and pharmacists to prescribe unnecessary treatment for workers' compensation insurance patients.

Irvine pharmacists Charles Bonner, RPh., 56, and Mervyn Miller, RPh., 66, owners of Steven's Pharmacy in Costa Mesa, are accused of conspiring with Christopher and Tanya King by selling more than $1 million in compound creams that were not FDA approved nor have known medical benefits.

“The Kings and their co-conspirators played with patients' lives, buying and selling them for profit without regard to patient safety,” said Commissioner Dave Jones. “Patients have the right to expect treatment decisions by health care professionals are based on medical need and not unadulterated greed. The magnitude of this alleged crime is an affront to ethical medical professionals.”

“The Orange County District Attorney's Office will continue to be a leader in the state in prosecuting these types of crimes, because they affect the health of our economy and wellness of our bodies,” stated OCDA Rackauckas. “In order for the system to survive, we must have ethical doctors who abide by their Hippocratic Oath to ‘do no harm.' The intent of many of the laws surrounding the insurance industry is to keep the three Ps – Physician – Patients – and Profit separate. We have a track record of putting these types of fraudsters behind bars for a long time and we intend to do just that again,” Rackauckas concluded.

From 2011 to 2015, the defendants are charged for their part in the fraudulent scheme of billing for unnecessary creams, tests, and treatments to maximize profits. More than 13,000 patients and at least 27 insurance carriers were victims in the scheme. The California Department of Insurance led the investigation with assistance from the Orange County District Attorney's Office Bureau of Investigation, the FBI, and National Insurance Crime Bureau. Approximately $23.2 million was paid out to the defendants, but a total of $40 million was billed to insurers.

Circumstances of the Case

The Kings are accused of making oral and written agreements with doctors across the state paying them each time they prescribed a compound cream or oral medication or ordered a urine drug test. The doctors or the companies connected to them are accused of labeling the payments “marketing expenses” in an attempt to conceal, the kickbacks. The Kings are accused of rewarding doctors who provided higher volume by paying for office technicians.

Snake Oil Scam

The Kings are accused of working with pharmacist and co-defendant Charles Bonner, owner of Stevens Pharmacy in Costa Mesa, to manufacture a variety of creams with unknown effects from Steven's Pharmacy that were not FDA approved. The Kings purchased the creams for between $15 and $40 per tube. These products were then billed to patients' workers' compensation insurance carriers for between $250 and $700 dollars per tube. Tanya King is accused of recruiting physicians to participate in this scam by paying a flat $50 rate or a share in the profits.

Medication Kickback Scam

The Kings are accused of purchasing repackaged oral pain medications from two companies: NuCare Pharmaceuticals in Orange and A S Medication Solutions in Costa Mesa. Using their company Monarch Medical Group as a cover, the Kings are accused of repackaging meds sent directly to the physicians involved in the scam. As the doctors dispensed the medication, the bar code on the packaging was scanned, notifying the Kings. The Kings are accused of billing workers' compensation insurance carriers without disclosing the wholesale cost or the fact they had purchased the medication on behalf of the physicians who ultimately prescribed it. Once the Kings received the payment, they are accused of splitting the profits with the prescribing physician based upon a pre-arranged agreement.

Bogus Urine Test Scam

The Kings are accused of providing technical staff to participating physician's offices through their company One Source Labs. The doctors are accused of ordering unnecessary urine tests, under the guise of verifying patients on workers' compensation insurance were taking their medications as prescribed. The urine samples were then tested by One Source Lab technicians or the doctors' staff and billed to the insurance company on behalf of the physicians by King Medical Management. The results were then referred to Pacific Toxicology Laboratory for additional testing, regardless of results. Through their company One Source Labs, the Kings are accused of paying Pacific Toxicology a flat rate of $60 per test and billing the insurance carriers hundreds of dollars per patient.

Defendants:

Tanya King, 37, Beverly Hills

Christopher King, 38, Beverly Hills

Charles Bonner, RPh., 56, Irvine

Mervyn Miller, RPh., 66, Irvine

Dr. Jerome Robson, 68, Modesto

Dr. Eric Schmidt, 63, Santa Rosa

Dr. Chris Chen, 55, Pleasanton

Dr. Duke Ahn, 49, Los Alamitos

Dr. Robert E. Caton, 65, Modesto

Dr. Eduardo T. Lin I, 55, Pleasanton

Dr. Ismael Silva Jr, 63, Newport Coast

Dr. Ismael Geli Silva, 38, Huntington Beach

Dr. Paul A. Stanton, 54, Victorville

Dr. John Casey Jr, 65, Modesto

Dr. Jonathan Cohen, 57, Modesto

Dr. Mohamed Ibrahim, 40, Danville

Dr. William Pistel, 53, Modesto

Dr. Kevin Park, 49, Buena Park

Dr. Kourosh Shamlou, 49, Newport Coast

Dr. Mannie Joel, 67, Pleasanton

Dr. Parvez Fatteh, 46, Pleasanton

Dr. Robert Fenton, 68, Ranchos Palos Verdes

Dr. Michael Henry, 61, Granite Bay

Dr. Howard Oliver, 70, Long Beach

Rafael Chavez, P.A., 53, Apple Valley

Dr. Paul Kaplan, 76, Folsom

The summary of charges for each defendant, “Monarch Medical defendants and charges” is available at www.orangecountyda.org by selecting Reports under the Reports pull-down menu.

*13,000 patients affected in statewide workers' comp fraud

Case #'s:  17CF0794, 17CF0800, 17CF0802, 17CF0805, 17CF0807, 17CF0808, 17CF0810, 17CF0816 and 17CF0867.

Orange County District Attorney / April 20, 2017