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Houston-area pharmacy owner, accountant indicted in $150 million pharmacy healthcare fraud scheme, DOJ says

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houston – Two Houston-area men have been charged with a nationwide pharmacy healthcare fraud scheme targeting seniors, federal attorney Jennifer B. Rowley announced Tuesday.

Mohamed Mokbel, 57, and Fathy Elsafty, 63, are charged with one count of conspiracy to commit mail and medical fraud, two counts of medical fraud, and 15 counts of money laundering.

The 18 indictments returned on July 20 show that Mokbel and El Safti conspired to commit $150 million in postal and medical fraud from 2013 to January 2022, with the proceeds of the fraud being used to make money. Mokbel also allegedly ran a fraud scheme at MK Pharmacy, a Houston-area pharmacy, from April 2021 to January 2022. During this time, he had been cleared for release on bail after his original indictment was returned in March 2021.

Mockbel was the CEO of 4M Pharmaceuticals, according to the indictment. With ElSafty’s backing, he is said to have acquired and managed more than 10 of his pharmacies operating in Houston and elsewhere. The indictment alleges Elsafty that he served as an accountant and tax attorney for 4M and had ownership of several pharmacies in California, Texas and Florida. ElSafty allegedly assisted Mokbel in falsifying company filings and concealing Mokbel’s involvement with the pharmacy.

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According to the indictment, the scam was widespread and was carried out using telemarketing and the mail, using sophisticated mass marketing schemes targeting individuals over the age of 55. Mokbel allegedly purchased patient data and instructed 4M Pharmaceuticals employees to submit test claims to patient insurance plans to determine coverage.

4M then allegedly sent a prescription fax request to the doctor’s office on behalf of the patient, without the patient’s knowledge or consent. In some cases, 4M has claimed prescriptions for patients who have been dead for months, if not years.

A company employee then allegedly called the patient to report that the doctor had approved the prescription and that he would receive the medicine free of charge. However, according to claims, Medicare and other insurance plans often required copayments, which 4M did not collect. During the audit, 4M allegedly falsified evidence of copayment recovery.

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They face up to 20 years in prison if convicted of conspiracy, and 10 years in prison for medical violations. Money laundering can also carry a 10-year sentence. For using telemarketing to target people over the age of 55 as a means of committing email fraud and medical fraud, he will also face 10 years in prison. A fine may also be imposed in the amount of $250,000 or less than twice his amount of property derived from crimes involved in the transaction.

Department of Health and Human Services – Office of the Inspector General, Food and Drug Administration – Criminal Investigation Service, Homeland Security Investigations Service, FBI, Texas Attorney General’s Medicaid Fraud Control Unit, IRS – Criminal Investigation, Ohio Medicaid Fraud Control Unit, Texas Commission on Pharmacy , the U.S. Postal Inspection Service, and the California Department of Health Services conducted a joint study.

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Special Assistant Abdul Falki and Assistant Federal Attorney Zahra Fenelon are prosecuting the case. U.S. Assistant U.S. Attorney Christine Rawlinson is helping seize property.

Copyright 2022 by KPRC Click2Houston – All rights reserved.

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