$40 Million Insurance Scam in California; 15 Indicted & Sentenced in Santa Clara County

Santa Clara County, CA: Fifteen individuals have been convicted for their involvement in a massive insurance fraud scheme in California. The scam, worth a staggering $40 million, revolved around a telemarketing company that aggressively promoted prescriptions and medical devices to unsuspecting patients.

According to a news release from the Santa Clara County Office of the District Attorney on Jan. 30, the defendants were found to have run an illegal call center, a durable medical device company, and six pharmacies in Southern California.

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Their operations involved targeting patients and billing for fraudulent prescriptions between 2015 and 2020. A scheme was uncovered where pharmacies were acquired and transformed into facilities that produced pain cream and medical devices.

These establishments would then fulfill prescriptions, which were authorized by doctors who received substantial kickbacks. According to the release, the physicians had minimal interaction with the patients.

Several insurance companies fell victim to a fraud scheme, resulting in a loss of approximately $40 million. The defendants have been directed to collectively pay over $8.3 million in restitution.

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