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Homewreckers are blamed for breaking up a marriage or a family. Usually, it’s a person, but as today’s article explains, fraud is the culprit. A Beverly Hills, California couple, who owned three medical billing and medical management companies, are charged with masterminding a $40 million conspiracy to commit workers’ compensation insurance fraud. (They didn’t do it alone, but conspired with 26 doctors, pharmacists and business owners.) After further research, it appears the couple has split and they are now embroiled in a contentious divorce and child custody case in addition to the workers’ compensation insurance fraud charges.

The wife and her husband are accused of a complex insurance fraud scheme that involved the recruitment of doctors and pharmacists, who participated in the scheme by prescribing unnecessary treatments for workers’ compensation insurance patients. (The couple purportedly used three schemes to pull off the heist.)

The couple allegedly used pharmacists to create a variety of pain creams that were not approved by the Food and Drug Administration (FDA). They supposedly bought the creams from the pharmacists for between $15 and $40 a tube, but then billed workers’ compensation insurance carriers between $250 and $700 per tube. (The wife is accused of paying a flat rate of $50 to doctors to participate in the scam, or a share in the profits.)

The second scam involved the purchase of oral pain medications through two of their companies. They repackaged the pain medications and sent them directly to physicians that were participating in the scam. Workers’ compensation insurance carriers were billed without disclosing the wholesale cost or the fact that the couple purchased medications for the doctors who prescribed those medications.

The third ruse involved bogus urine tests. The couple is accused of providing staff to carry out the scam in the offices of physicians involved. These staff members ordered unnecessary urine tests for patients who were supposedly taking medications as prescribed. The urine samples tested by the couple’s lab company were billed to the workers’ compensation insurance companies on behalf of the doctors who ordered the tests. (Results were often sent to another lab for additional testing, whether needed or not. The couple is accused of paying an outside lab company a flat $60 rate per test and billing insurance carriers hundreds of dollars per patient.)

Over four years, the defendants impacted more than 13,000 patients and at least 27 insurance carriers. Out of $40 million in bills for unnecessary creams, tests and treatments, the couple’s empire received approximately $23.2 million for their bogus claims.

Fast forward three months after the initial charges were filed, and the 38-year-old husband accepts a plea deal, turning against his 37-year-old wife. In exchange for pleading guilty to workers’ compensation insurance fraud, aggravated white-collar crime counts and aggravated property damage counts were dropped. (He now has two regular counts filed against him, while his wife has 111 counts charged against her.) The husband is expected to get a maximum of one year in county jail to be followed by five years of formal probation. If convicted, the wife is facing a maximum sentence of 117 years in prison because her role is purportedly more extensive than her husband’s.

This case is a perfect example of how greed can impact the person who commits fraud, their family, and victims. Fraud has wrecked this family and now leaves two children under 10 at risk. The patients who were prescribed compounded medications were taking them at their own risk since they were not FDA-approved. The insurance companies unknowingly funneled millions of dollars into the pockets of a very greedy couple. Fortunately, the Orange County District Attorney’s office has effectively stopped the destruction, leaving this former power couple’s lives in shambles.

Today’s “Fraud of the Day” is based on a California Department of Insurance press release entitled, 26 doctors, pharmacists and business owners charged in $40 million kickback scheme,” released on April 20, 2017.

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.

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.