By Aaron Blevins, 10/18/2012
A federal grand jury has returned a superseding indictment that charges 16 defendants with being part of a drug trafficking organization that illegally obtained and distributed more than 900,000 OxyContin pills obtained in part through fraud against public insurance programs such as Medicare.
The 15 defendants who have been arraigned have all pleaded not guilty and were ordered to stand trial next month. One defendant is a fugitive.
The superseding indictment replaces charges filed a year ago, adding new charges of money laundering and structuring of cash transactions. The indictment adds new defendants, including four pharmacists, and alleges a conspiracy to distribute controlled substances, a conspiracy to commit health care fraud, structuring financial transactions and money laundering. It also seeks the forfeiture of proceeds related to the criminal offenses.
The indictment outlines a scheme in which a medical clinic in the Westlake District of Los Angeles was used as a base of operations for doctors who wrote OxyContin prescriptions for Medicare and Medi-Cal beneficiaries, as well as other patients, who did not need the powerful painkiller. The OxyContin was obtained from Southland pharmacies, some of which submitted fraudulent bills to the public insurance programs. Members of the conspiracy allegedly resold the OxyContin on the street and reaped millions of dollars in profits.
To deal with the large amounts of cash generated from the illegal OxyContin sales, some of the defendants allegedly “structured” cash deposits by making bank deposits in amounts of $10,000 or less to evade bank reporting requirements. Other defendants used proceeds from the sale of OxyContin to gamble at casinos, to purchase automobiles and jewelry or to buy more OxyContin.
The scheme allegedly was orchestrated by Mike Mikaelian and Anjelika Sanamian, who operated the Lake Medical Group on West 8th Street in Los Angeles. The indictment describes Lake Medical Group as a “prescription mill” that both generated prescriptions for unneeded OxyContin and submitted claims to Medicare and Medi-Cal for medical services that were unnecessary or were never performed.
Lake Medical Group operated for approximately 18 months, during which time doctors working at the clinic prescribed OxyContin approximately 10,833 times. During this time, Medicare Part D and Medicare prescription drug programs paid more than $2.7 million for OxyContin prescriptions generated by the clinic and its doctors.