Houston pharmacy CEO arrested for disturbing $ 134 million Medicare fraud scheme


A Ferrari, a Bentley and a lavish $ 1.5 million mansion in Houston were just a few luxury items that were uncovered when federal officials shut down a Medicare fraud scheme, according to the US Department of Justice.

A CEO of a Houston pharmacy and his accountant have been charged and arrested in a $ 134 million medical fraud scheme. 4M Pharmaceuticals CEO Mohamed Mokbel, 56, and his accountant, Fathy ElSafty, 62, have both been charged with committing healthcare fraud, three counts of healthcare fraud and four counts of money laundering., Acting American lawyer Jennifer Lowery announced.

It was an elaborate program that targeted the most vulnerable individuals –those over 55, say federal investigators. In an eight-count indictment, officials claimed that 4M Pharmaceuticals was operating as an outbound telemarketing call center that solicited Medicare, Medicaid and commercial insurance patients.

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Mokbel and his accountant, ElSafty, reportedly offered patients medically unnecessary diabetic supplies and topical creams, although many refused the products. Despite patient denial, 4M Pharmaceuticals and pharmacies still billed patient insurance plans. The most disturbing allegation indicates that 4M Pharmaceutical requested and billed for prescriptions after patients died, federal investigators said.

It’s not just patients who have been targeted in this Medicare program – doctors have also fallen prey to this program, investigators say. 4M Pharmaceuticals reportedly sent out prescriptions that patients did not authorize. ElSafty’s role in the program was allegedly to fabricate records, when audits forced 4M Pharmaceuticals to produce documents, according to federal investigators.

Unraveling the plot, investigators discovered that Medicare payments were being used to pay for lavish luxury items for Mokbel.

“The funds were said to have been used, in part, to pay for Mokbel’s $ 1.5 million residence, $ 15 million in gambling and casino fees, and purchases and payments for a Ferrari and Bentley automobile,” the US attorney’s office said.

Mokbel and ElSafty face a 10-year prison sentence and a fine of up to $ 250,000. The couple may also face an additional 10 years for using telemarketing to target people over 55 as a means of committing health fraud.

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