HOUSTON — A Houston pharmacy owner and his accountant were arrested Tuesday on charges of conspiracy to commit health care fraud to the tune of $134M.
Mohamed Mokbel, 56, owns several Houston-area pharmacies and is CEO of their parent company, 4M Pharmaceuticals, according to records.
The indictment alleges that from late 2013 through March of 2020, 4M pharmacies collectively received millions of dollars in payments from Medicare, Medicaid and private insurance companies based on fraudulent claims.
The funds were allegedly used, in part, to pay for Mokbel’s $1.5 million residence, a Ferrari, a Bentley and $15 million in gambling and casino expenses. The feds say Mokbel also transferred and controlled over $6 million in health care fraud proceeds in CD accounts at banks.
His eight-count indictment alleges:
- 4M Pharmaceuticals billed patients for drugs without a valid prescription and sent prescription requests to doctors for dead patients.
- 4M is also accused of billing Medicare, Medicaid and private insurance companies for prescriptions after a patient’s death.
- 4M operated as a telemarketer company that targeted Medicare, Medicaid and commercial insurance patients, according to Acting U.S. Attorney Jennifer Lowery. She said employees offered unnecessary medical supplies over the phone, then billed the insurance companies even when the patients said no.
Fathy Elsafty, 62, is the accountant for 4M Pharmaceuticals and he's accused of fabricating records, among other things.
Mokbel and Elsafty are each charged with one count of conspiracy to commit health care fraud, three counts of health care fraud and four counts of money laundering.
Each carries a possible 10 year prison sentence and $250,000 maximum fine.
The use of telemarketing to target people over 55 as a means to commit health care fraud carries an additional penalty of 10 years.
The joint investigation was done by ICE, Homeland Security Investigations, Department of Health and Human Services, Office of the Inspector General, FDA, IRS, FBI, Texas Attorney General’s Medicaid Fraud Control Unit, Ohio Medicaid Fraud Control Unit and Texas State Board of Pharmacy.
