The federal government announced that a Dearborn Heights business owner pleaded guilty to a healthcare fraud conspiracy that cost Medicare, Medicaid, and Blue Cross Blue Shield of Michigan about $1.9 million, with investigators and prosecutors naming the parties involved and outlining potential penalties.
The guilty plea came this week in a case the U.S. Attorney’s Office says targeted prescription drug billing. United States Attorney Jerome F. Gorgon, Jr. announced that the scheme produced roughly $1.9 million in losses to federal and private health insurers, sparking a criminal prosecution focused on fraudulent pharmacy claims.
Rabih Hamdan, 41, of Dearborn Heights, Michigan, admitted his role at a plea hearing where he acknowledged overseeing a network that generated false claims. At the plea hearing, Hamdan admitted to creating and operating a scheme to submit false and fraudulent claims for prescription drugs that were medically unnecessary or not actually dispensed.
Prosecutors say the pharmacy often did not have the inventory to fill the prescriptions it billed, yet insurers were charged as if the drugs had been dispensed to patients. In many instances, his pharmacy lacked the inventory to dispense these drugs but billed the health care insurers as though they had been dispensed. The records submitted to Medicare, Medicaid, and Blue Cross Blue Shield of Michigan allegedly reflected services and medications that were never provided.
Authorities also contend many of the billed medications were not even ordered by authorized prescribers, and that money from the fraud was diverted for personal use and to benefit others connected to the scheme. Hamdan and his coconspirators reportedly submitted false and fraudulent claims totaling at least $1.9 million over a five-year span, according to the charging documents referenced at the plea.
The announcement named officials who led the investigative effort and coordinated the public statement about the case. Gorgon was joined in the announcement by Mario M. Pinto, Special Agent in Charge at the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) and Jennifer Runyan, Special Agent in Charge, Federal Bureau of Investigation, Detroit Field Office.
Sentencing is scheduled after a presentence report is prepared and will be handled by United States District Judge Matthew F. Leitman. Hamdan faces statutory maximums that include up to 10 years in prison, a fine of up to $250,000, and up to three years of supervised release following any term of imprisonment if the court imposes the maximum penalties.
Federal investigators with specialized health care oversight and criminal enforcement units led the probe that produced the guilty plea. The case was investigated by the Department of Health and Human Services – Office of the Inspector General (HHS-OIG) and the Federal Bureau of Investigation (FBI). That multiagency approach is typical in complex billing and pharmacy investigations where paper trails, billing records, and controlled substance tracking all play roles.
The prosecution will be handled by the U.S. Attorney’s Office with an Assistant United States Attorney assigned to the matter. The case is being prosecuted by Assistant United States Attorney Jason Dorval Norwood. As the process moves toward sentencing, court filings and the presentence report will further detail the scope of the scheme and the government’s recommendations for punishment.
