Mass. U.S. Attorney: Brookline Doctors Indicted on Additional Tax Charges

BOSTON, Massachusetts, Feb. 4 -- The U.S. Attorney for the District of Massachusetts, Rachael S. Rollins, issued the following news release on Feb. 3, 2023:

Two Brookline physicians were charged in a superseding indictment today with tax evasion and a conspiracy to defraud the Internal Revenue Service.

Dr. Pankaj Merchia, 49, of Brookline and Boca Raton, Fla., and Dr. Shona Pendse, 50, of Brookline, were indicted on two counts of tax evasion each and one count of a conspiracy to defraud the IRS. Merchia was previously indicted on one count of health care fraud and three counts of money laundering in December 2022.

According to the charging documents, Merchia and Pendse conspired to use a sham $30 million transaction as a basis to take fraudulent tax deductions and then made false statements about the transaction to criminal investigators and in civil depositions. Specifically, Pendse allegedly provided her employer with a W-4 that claimed her to be tax exempt, thus ensuring her employer would vastly underwithhold federal income tax. It is further alleged that Merchia earned substantial income from third party business entities in 2017 and 2019, and Pendse earned substantial income from her employer in 2019 and 2020, but each willfully avoided paying taxes on that income.

According to court documents, Merchia allegedly perpetrated two distinct health care fraud schemes. Specifically, Merchia allegedly billed former patients' insurance companies for monthly rentals of Continuous Positive Airway Pressure (CPAP) and Bilevel Positive Airway Pressure (BiPap) machines years after the former patients had discontinued their use of the machines and/or returned the machines to Merchia's office. It is further alleged that Merchia used the proceeds of this fraud to purchase an expensive home in Brookline.

Additionally, Merchia allegedly billed the insurance company of a family member over $400,000 for a monthly rental of a CPAP machine, despite knowing that the insurance carrier would not pay for treatment rendered by a family member. It is alleged that Merchia used the proceeds of this fraud to fund a wire transfer of $250,000 and to purchase at least $140,000 in securities.

The charges of money laundering and health care fraud provide for a sentence of up to 10 years in prison, three years of supervised release and a fine of up to $250,000. The charges of tax evasion and conspiracy to defraud the IRS provide for a sentence of up to five years in prison, three years of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

United States Attorney Rachael S. Rollins; Joleen Simpson, Special Agent in Charge of the Internal Revenue Service's Criminal Investigation in Boston; and Anthony M. DiPaolo, Executive Director of the Insurance Fraud Bureau of Massachusetts made the announcement today. Assistant U.S. Attorneys Lauren A. Graber of Rollins' Health Care Fraud Unit and Evan D. Panich of Rollins' Narcotics & Money Laundering Unit are prosecuting the case.

The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

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Original text here: https://www.justice.gov/usao-ma/pr/brookline-doctors-indicted-additional-tax-charges