Three Arrested in Sophisticated Medi-Cal Fraud And 'Doctor Shopping' Ring
SAN DIEGO—Attorney General Edmund G. Brown Jr. today announced the arrests of a doctor and two employees operating a “complex, multi-level scheme” that bilked more than $200,000 from low-income patients and government agencies by overcharging and prescribed pain medication to individuals who had no medical need for it.
Beginning in 2007, the three individuals arrested Wednesday perpetrated their scheme to defraud state and federal health insurance programs and patients in the San Diego area.
“These individuals operated a complex, multi-level fraud scheme,” Brown said. “Today’s arrests are a result of the cooperative efforts of state and federal law enforcement to take this dirty doctor off the streets.”
The individuals arrested today include Dr. Mohammed Tarek Kady, 55, Mario Ramirez Zarco, 31, and Ana Audelo, 23, all three from Chula Vista.
All three individuals were charged with violating California Penal Code sections 182(a)(1), 182(a)(4), 487(a), and 550(b)(3) for conspiring to cheat and defraud, to commit grand theft, and commit insurance fraud.
In addition, Kady was also charged with:
• One count of violating California Welfare and Institutions Code section 14107(b)(4)(A) for Medi-Cal fraud
• Five counts of violating California Penal Code section 487(a) for grand theft
• Three counts of violating California Penal Code section 550(a)(6) for insurance fraud
• Seven counts of violating California Health and Safety Code section 11153(a) for illegal prescribing
• One count of violating California Labor Code 3700.5(a) for failing to obtain worker’s compensation for employees
• Special Allegations of theft, including theft in excess of $100,000.
The arrests are the result of a cooperative effort between Brown’s office, the San Diego District Attorney’s Insurance Fraud Task Force, the Federal Bureau of Investigation (FBI), San Diego Health Care Fraud Squad and San Diego Organized Crime Squad, the California Department of Industrial Relations, and the federal Drug Enforcement Administration (DEA), Tactical Diversion Squad.
In February 2009, an Anthem Blue Cross investigator reported Kady’s pediatric office in Chula Vista was unlawfully charging fees to patients enrolled in state and federal health insurance plans.
Two of Kady’s employees, Mario Zarco and Ana Audelo, unlawfully charged patients $50 to $500 for assistance in enrollment in state and federal health insurance coverage. Kady himself unlawfully charged patients an additional $200 to $300 fee to examine their newborn children in the hospital.
Investigators estimate that Kady unlawfully charged more than $60,000 for services to individuals and families enrolled in state and federal health insurance coverage.
Brown’s investigation also showed Kady frequently traveled out of the country for several weeks at a time but continued to charge for his services at his Chula Vista office. Reimbursement claims indicate Kady charged more than $160,000 for services when, in reality, he was out of the country.
In addition to overcharging for services and charging for services never performed, Kady prescribed pain medication to individuals without any justifiable medical purpose, enabling patients apparently “doctor shopping” for drugs. Kady wrote prescriptions for opiates, including the narcotic, Vicodin, and codeine cough syrups to drug addicts abusing the drugs and illegally selling them. On seven DEA sting operations, most recently last month, Kady prescribed narcotics without medical justification.
Kady’s patients were instructed to fill their pain medication prescription at one San Diego pharmacy. An employee at the pharmacy became suspicious after dozens of individuals attempted to fill prescriptions, written by Kady, at the pharmacy each Friday. The investigation revealed Kady and the pharmacy owner had a quid pro quo arrangement in which the pharmacy would kick back some $3 per prescription.
According to the Medical Board of California, Mohammed Tarek Kady was licensed as a physician in December 1997. He is a family practitioner with board certification in Pediatrics, and maintained two clinics, one in Chula Vista and one in San Diego.
If convicted of all charges, Kady faces as much as 20 years in prison. Zarco and Audelo face up to 6 years in prison if convicted of all charges.
“The Drug Enforcement Administration is committed to keeping the San Diego community safe from doctors who enable the abuse of prescription drugs”, says Special Agent in Charge Ralph W. Partridge. “The suspension of Doctor Kady’s controlled substance privilege is an important step toward ensuring accountability of those who supply controlled substances illegally”.
A copy of the complaint filed in San Diego Superior Court is attached. Photos of the defendants are also attached.