Calif. U.S. Attorney: Former Physician Associated With 1-800-GET-THIN Sentenced to 7 Years in Federal Prison for Massive Fraud Against Health Insurers

LOS ANGELES, California, April 19 -- The U.S. Attorney for Central District of California, Martin Estrada, issued the following news release on April 18, 2023:

A former doctor has been sentenced to 84 months in federal prison for scheming to defraud private insurance companies and the Tricare health care program for U.S. military service members by fraudulently submitting nearly $120 million in claims related to the 1-800-GET-THIN Lap-Band surgery business, the Justice Department announced today.

Julian Omidi, 54, of West Hollywood, was sentenced Monday evening by United States District Judge Dolly M. Gee.

Judge Gee also sentenced Surgery Center Management LLC (SCM), an Omidi-controlled Beverly Hills-based company, to five years' probation. A separate hearing on restitution and forfeiture in this case, along with SCM's fine, is expected in the coming weeks.

At the conclusion of a three-month trial, a federal jury in December 2021 found Omidi and SCM guilty of 28 counts of wire fraud and three counts of mail fraud. Omidi also was found guilty of two counts of making false statements relating to health care matters, one count of aggravated identity theft and two counts of money laundering. Omidi and SCM also were found guilty of conspiracy to commit money laundering.

"As found by the jury, the defendant Julian Omidi deliberately and repeatedly acted with an eye towards business and profits, rather than in the interest of GET THIN's medical patients, by inducing patients to undergo medical treatment premised on fraud rather than medical necessity, including surgeries that carry significant risks and life-long health impacts," said United States Attorney Martin Estrada. "Those who engage in fraud - to the detriment of vulnerable patients and the insurance companies - must always be held accountable."

"Patients rely on medical providers to give them information that is truthful and accurate, so that the patients do not make inappropriate decisions about medical devices, which FDA oversees," said Special Agent in Charge Robert M. Iwanicki, FDA Office of Criminal Investigations Los Angeles Field Office. "When providers give inaccurate information, we will investigate and bring to justice those who place profits over public health."

"Mr. Omidi made millions at the expense of the multiple victim companies he defrauded, and he violated his oath to 'do no harm' by callously misleading patients about the need for a sleep study and subsequent weight loss surgery," said Donald Alway, the Assistant Director in Charge of the FBI's Los Angeles Field Office. "This successful prosecution should send a clear warning to anyone in the medical profession who intends to falsify insurance claims for unnecessary procedures or provide faulty medical advice to patients seeking reliable care."

"Medical providers are in a position of great trust, and this former doctor broke that trust victimizing patients including military service members with medically unnecessary treatment to boost his own profits by hundreds of millions of dollars," said Insurance Commissioner Ricardo Lara. "Medical provider fraud is a multi-billion-dollar problem that drives up health insurance premiums and creates a drain on our economy. My Department of Insurance and our law enforcement partners are committed to investigating fraud and protecting consumers and the health care system."

Omidi is a former dermatologist whose medical license was revoked in 2009 after state authorities found he had engaged in dishonesty and unprofessional conduct related to his application for his California medical license.

He controlled, in part, the GET THIN network of entities, including SCM, that focused on the promotion and performance of Lap-Band weight-loss surgeries. Omidi established procedures requiring prospective Lap-Band patients - even those with insurance plans he knew would never cover Lap-Band surgery - to have at least one sleep study, and employees were incentivized with commissions to make sure the studies occurred.

Omidi used the sleep studies to find a reason - the "co-morbidity" of obstructive sleep apnea - that GET THIN would use to convince the patient's insurance company to pre-approve the Lap-Band procedure.

After patients underwent sleep studies - irrespective of whether any doctor had ever determined the study was medically necessary - GET THIN employees, acting at Omidi's direction, often falsified the results. Omidi then used the falsified sleep study results in support of GET THIN's pre-authorization requests for Lap-Band surgery.

Relying on the false sleep studies - as well as other false information, including patients' weights - insurance companies authorized payment for some of the proposed Lap-Band surgeries. Moreover, even if the insurance company did not authorize the surgery, GET THIN still was able to submit bills for approximately $15,000 for each sleep study. Prosecutors estimate that Omidi's conduct caused insurers and Tricare to pay at least approximately $41 million for Lap-Band procedures, sleep studies, and CPAP devices and accessories tainted by this fraud.

The victim health care benefit programs include Tricare, Anthem Blue Cross, UnitedHealthcare, Aetna, Health Net, Operating Engineers Health and Welfare Trust Fund, and others.

"Today, marks the end of the appalling chapter of Julian Omidi and 1-800-GET-THIN. Omidi was well educated; he had every opportunity to be successful and make ethical decisions. However, driven by greed, he committed some of the most unconscionable and atrocious acts," said Tyler Hatcher, Special Agent in Charge of IRS Criminal Investigation's Los Angeles Field Office. "There are no words strong enough to describe the actions taken by Omidi. We hope this sentencing brings some closure to all the victims affected by Omidi and 1-800-GET-THIN. IRS Criminal Investigations is committed to using our financial expertise to bring down people and organizations that take advantage of our community and cause irreparable harm."

In 2014, the government seized more than $110 million in funds and securities from accounts held by individuals and entities involved in the criminal scheme, including Omidi. The government is seeking a money judgment order of forfeiture against defendants Omidi and SCM in the amount of $98,280,221 and is pursuing civil forfeiture of the seized property totaling $107,539,422.

The U.S. Food and Drug Administration Office of Criminal Investigations; the FBI; the Defense Criminal Investigative Service; IRS Criminal Investigation; and the California Department of Insurance investigated this matter.

Assistant United States Attorneys Kristen A. Williams, Ali Moghaddas, and David H. Chao of the Major Frauds Section, and Assistant United States Attorney David C. Lachman of the Terrorism and Export Crimes Section prosecuted this case. Assistant United States Attorney James E. Dochterman of the Asset Forfeiture and Recovery Section is handling the asset forfeiture portion of this case.

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Original text here: https://www.justice.gov/usao-cdca/pr/former-physician-associated-1-800-get-thin-sentenced-7-years-federal-prison-massive