21 California doctors charged in $40M fraud scheme

Doctor putting money in pocket
21 Calforrnia doctors are facing charges in a $40 million fraud scheme.

Twenty-one California doctors are facing charges in an alleged $40 million fraudulent medical billing and kickback operation.

A total of 26 people, including the doctors, a physician assistant, two pharmacists and husband-and-wife business owners are charged in the scheme, which affected 13,000 patients and at least 27 insurers in a statewide workers’ compensation fraud, according to the California Department of Insurance.

The charges were announced by Insurance Commissioner Dave Jones and Orange County District Attorney Tony Rackauckas. They have charged a Beverly Hills couple, Tanya Moreland King, 37, and her husband Christopher King, 38, with masterminding a complex insurance fraud scheme in which they recruited doctors and pharmacists to prescribe unnecessary treatment for workers' compensation insurance patients.

The Kings owned medical billing and medical management companies Monarch Medical Group, Inc., King Medical Management, Inc., and One Source Laboratories, Inc.

Two Irvine pharmacists who owned a local pharmacy are charged with conspiring with the Kings by selling more than $1 million in compound creams that were not FDA approved and did not have any known medical benefits, prosecutors said.

“The magnitude of this alleged crime is an affront to ethical medical professionals,” Jones said, in an announcement.

Prosecutors said the fraud took place from 2011 to 2015 when the Kings allegedly made oral and written agreements with doctors across the state, paying them each time they prescribed a compound cream or oral medication or ordered a urine drug test.

The doctors or their companies are accused of labeling the payments “marketing expenses” to conceal the kickbacks. Approximately $23.2 million was paid out to the defendants, but a total of $40 million was billed to insurers, prosecutors said. In some cases, the Kings allegedly payed for office technicians for higher volume doctors.