Calif. U.S. Attorney: Merced County Doctor Indicted for Multimillion Dollar Disability Insurance Fraud Scheme, Money Laundering, Unrelated Drug Charges - Insurance News | InsuranceNewsNet

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October 28, 2022 Newswires
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Calif. U.S. Attorney: Merced County Doctor Indicted for Multimillion Dollar Disability Insurance Fraud Scheme, Money Laundering, Unrelated Drug Charges

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FRESNO, California, Oct. 28 -- The U.S. Attorney for the Eastern District of California, Phillip A. Talbert, issued the following news release:

On Oct. 20, 2022, a federal grand jury charged Sohail Mamdani, 46, of Los Banos, with mail fraud and money laundering in connection to a disability insurance fraud scheme, and unlawful use of a DEA registration number and fraudulently obtaining possession of a controlled substance, U.S. Attorney Phillip A. Talbert announced.

The California Employment Development Department (EDD) runs a Disability Insurance program that offers worker-funded benefits to people who meet certain requirements and have had those requirements verified by their physician or medical practitioner. Mamdani was a medical doctor operating a clinic called Walk-In Medical Clinic in Los Banos.

According to court documents, between February 2020 and March 2022, Mamdani submitted over 6,000 initial claims to EDD for disability insurance payments despite having never seen or treated the majority of the claimants. As part of the fraud, Mamdani would charge the purported patient a fee for both the initial disability claim and any supplemental claims. In addition, in order to avoid federal reporting requirements, Mamdani structured financial transactions. The investigation reveals potential intended losses to EDD of up to $99 million dollars with potential actual losses of over $53 million.

Mamdani is separately charged with unlawfully using another doctor's DEA registration number for the purpose of unlawfully obtaining controlled substances. Additionally, Mamdani wrote a number of fraudulent prescriptions in the names of other individuals in order to obtain controlled substances himself.

This case is the product of an investigation by the Drug Enforcement Administration, the Federal Bureau of Investigation, and the California Employment Development Department. Assistant U.S. Attorneys Alexandre Dempsey and Michael Tierney are prosecuting the case.

If convicted of mail fraud, Mamdani faces a maximum statutory penalty of 20 years in prison and a fine of up to $250,000 or up to twice the gross gain or gross loss caused by the fraud. He faces a maximum statutory penalty of 20 years in prison and a fine of up to twice the value of property involved in the transactions or up to $500,000 if convicted of the money laundering charges. He also faces a maximum statutory penalty of four years in prison and a $250,000 fine for each of the drug related charges. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

* * *

Original text here: https://www.justice.gov/usao-edca/pr/merced-county-doctor-indicted-multimillion-dollar-disability-insurance-fraud-scheme

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