Michigan CEO pleads guilty in $300M opioid fraud scheme

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(Getty Images/William_Potter)

The CEO of a collection of pain clinics and a diagnostic laboratory in Michigan pleaded guilty to playing a role in a $300 million opioid fraud scheme to fund an extravagant lifestyle such as buying Hermes products, exotic vehicles like a Lamborghini, a mansion and courtside seats at the NBA Finals.

According to the Justice Department, Mashiyat Rashid, 38, who was CEO of the Tri-County Wellness Group of medical providers, was involved in a scheme to distribute more than 6.6 million units of controlled substances.

As part of his plea, Rashid admitted that he conspired with physicians to require Medicare beneficiaries who wished to obtain pain pills to first submit to expensive, medically unnecessary and painful injections to increase revenue, the Justice Department said. Some of those individuals were addicted to narcotics. 

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Rashid pleaded guilty to one count of conspiracy to commit healthcare fraud and wire fraud, and one count of money laundering. He also pleaded guilty to money laundering in connection with a $6.6 million wire transfer in 2016.

“The defendant and physicians working for him allegedly flooded the streets with some 4.2 million unnecessary doses of drugs like oxycodone and required patients to undergo expensive and unnecessary back injections in exchange for pills," said Attorney General Jeff Sessions in a statement. "And while people were suffering, this corporate executive lived in luxury funded by ill-gotten gains."

As part of the plea, he also admitted that when Medicare conducted a medical review of the injection claims and determined that 100% of the claims were not eligible for Medicare reimbursement, Rashid and others created new shell companies to continue the scheme.  

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As part of the plea, Rashid agreed to forfeit more than $51 million, as well as assets traceable to the fraud such as his commercial and residential real estate properties and a Detroit Pistons season ticket membership. 

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and the Department of Health and Human Services to prevent and deter fraud and enforce current anti-fraud laws around the country. With operations in 12 cities, the Medicare Fraud Strike Force has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. 

In January, Sessions announced a crackdown on prescribers and pharmacies that dispense unusual or disproportionate amounts of drugs. "Opioid prescription abuse is clearly a cause of some of the addiction we are seeing today," Sessions said.   

In addition to Rashid, others charged with conspiracy to commit healthcare fraud include Spilios Pappas, 61, of Monclova, Ohio; Joseph Betro, 57, of Novi, Michigan; Tariq Omar, 61, of West Bloomfield, Michigan; and Mohammed Zahoor, 51, also of Novi. 

A trial has been scheduled to begin Nov. 27 before U.S. District Judge Denise Page Hood of the Eastern District of Michigan. Rashid’s sentencing is set for April 11.

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