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John Scholtes and four other Defendants Sentenced in South Florida to Prison Terms for Their Roles in Tricare and Medicare Fraud Scheme

(STL.News) – This week, U.S. District Judge Cecilia M. Altonaga sentenced five defendants, including a doctor, to federal prison terms for their roles in a scheme that defrauded Tricare and Medicare out of more than $9.6 million.  The defendants tricked beneficiaries into having the federal health care programs pay for medically unnecessary compounded prescription medicines and cancer genetic tests.  Their sentences are as follows:

  • Dr. Mangala Ramamurthy, 64, of Texas was sentenced to 34 months for her role in the scheme: prescribing compounded pain creams and referring Genetic Cancer tests that were medically unnecessary.  Dr. Ramamurthy earlier pled guilty to conspiracy to defraud the U.S. and conspiracy to receive healthcare kickbacks.
  • John Scholtes, 56 of Boca Raton, Florida, was sentenced to 97 months for his role in the scheme.  Scholtes earlier pled guilty to conspiracy to commit healthcare fraud, conspiracy to defraud the U.S., and conspiracy to receive healthcare kickbacks.
  • Anthony Mauzy, 43, of California, was sentenced to 49 months for his role in the scheme.  Mauzy earlier pled guilty to conspiracy to commit healthcare fraud.
  • Thomas Sahs, 41, of California, was sentenced to 45 months for his role in the scheme.  Sahs earlier pled guilty to conspiracy to commit healthcare fraud.
  • Rajesh Mahbubani, 46, of Texas, was sentenced to 49 months for his role in the scheme.  Mahbubani earlier pled guilty to conspiracy to commit healthcare fraud.

On January 31, 2020, a sixth co-conspirator, Senthil Kumar Ramamurthy, 38, of Texas, was sentenced to 121 months in federal prison for his role in the scheme. S.K. Ramamurthy earlier pled guilty to conspiracy to commit healthcare fraud, conspiracy to defraud the US, and conspiracy to receive healthcare kickbacks. S.K. Ramamurthy is the son of Dr. Ramamurthy.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Cynthia Bruce, Special Agent in Charge, Defense Criminal Investigative Service (DCIS), Southeast Field Office, and SAC Omar Pérez Aybar, Special Agent in Charge for Health and Human Services, Office of Inspector General (HHS-OIG) made the announcement.

Tricare is the health care program for the U.S. military that pays the health care costs of active and retired military personnel and their families, including the costs of medically necessary prescription medications.  Medicare is a federally-funded program that provides free or below-cost health care benefits to certain individuals, primarily the blind, elderly, and disabled.

According to court records, the co-conspirators targeted Tricare for about 10 months, starting in 2014.  After making their way onto U.S. military bases, co-conspirators convinced Tricare beneficiaries to sign-up for compounded prescription medications that the beneficiaries did not need.  To encourage sign-up, co-conspirators falsely told the beneficiaries that the pharmacies would custom-design their medications or that the medications were free. In fact, the medications were not custom-designed and the patients had co-payments.  Compounding pharmacies paid the co-conspirators millions of dollars in kickbacks in exchange for sending the pharmacies expensive prescription orders.

In mid-2015, Tricare scaled back its reimbursements for compounded medications.  The defendants turned to Medicare.  They paid doctors to refer Medicare beneficiaries to a lab in Georgia for cancer genetic screening testing, even though the doctors had never examined the beneficiaries.   As with the compounded medications, the cancer genetic screening tests were not medically necessary.

The owner of the Georgia lab, Minal Patel, 40, was indicted in the Southern District of Florida in September 2019.  An indictment is an accusation and a defendant is innocent until proven guilty.

To date, fraudulent compounding pharmacy schemes have caused estimated losses to Tricare in excess of $2 billion.  Fraudulent genetic testing lab schemes have caused estimated losses to Medicare of approximately $2.1 billion.

U.S. Attorney Fajardo-Orshan commended the investigative efforts of DCIS and HHS-OIG.  Assistant United States Attorneys Kevin J. Larsen, Anna Maria Martinez, and John C. Shipley prosecuted the case.  Assistant United States Attorney Daren Grove is handling the asset forfeiture matters.

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