Feds Bust Operators of Bogus Medical Clinics

By Pat Anson, Editor

Hardly a day goes by without the U.S. Drug Enforcement Administration announcing a new drug bust or the sentencing of someone for drug trafficking. The announcements have become so routine they’re often ignored by the news media.

But a drug bust in Los Angeles this week is worth sharing, if only because it shows that the underground market for prescription painkillers is booming and criminals are eager to take advantage of it.

The DEA announced the indictment of 14 defendants and released details of a brazen scheme that involved a string of sham medical clinics, fake prescriptions and kickbacks to doctors who were paid “for sitting at home.”

The feds estimate that at least two million prescription pills – most of them painkillers – were diverted and sold to customers looking for pain relief or to get high.

Indictments by a federal grand jury allege the suspects established seven bogus medical clinics in the Los Angeles area. The clinics would periodically open and then close, after illegally obtaining large quantities of oxycodone, hydrocodone, alprazolam (Xanax) and other prescription drugs from pharmacies using fake prescriptions. The drugs were then sold to street level drug dealers.

Prosecutors say the ringleader of the scheme -- Minas Matosyan, aka “Maserati Mike” -- hired corrupt doctors to write fraudulent prescriptions under their names in exchange for kickbacks.

“This investigation targeted a financially motivated racket that diverted deadly and addictive prescription painkillers to the black market,” said David Downing, DEA Special Agent in Charge of the Los Angeles Division.

“The two indictments charge 14 defendants who allegedly participated in an elaborate scheme they mistakenly hoped would conceal a high-volume drug trafficking operation,” said Acting U.S. Attorney Sandra R. Brown.

The indictments describe how Matosyan would “rent out recruited doctors to sham clinics.”  In one example described in court documents, Matosyan provided a corrupt doctor to a clinic owner in exchange for $120,000. When the clinic owner failed to pay the money and suggested that Matosyan “take back” the corrupt doctor, Matosyan demanded his money and said, “Doctors are like underwear to me. I don’t take back used things.”

In a recorded conversation, Matosyan also discussed how one doctor was paid “for sitting at home,” while thousands of narcotic pills were prescribed in that doctor’s name and Medicare was fraudulently billed more than $500,000 for the drugs.

Prosecutors say the identities of doctors who refused to participate in the scheme were sometimes stolen. In an intercepted telephone conversation, Matosyan offered one doctor a deal to “sit home making $20,000 a month doing nothing.” When the doctor refused the offer, the defendants allegedly created prescription pads in the doctor’s name and began selling fraudulent prescriptions for oxycodone without the doctor’s knowledge or consent. 

The conspirators also issued fake prescriptions and submitted fraudulent billings in the name of a doctor who was deceased.

The indictment alleges that criminal defense attorney Fred Minassian tried to deter the investigation. After a load of Vicodin was seized from one customer, Matosyan and Minassian allegedly conspired to create fake medical records to throw investigators off track.

Matosyan, Minassian and 10 other defendants were arrested and arraigned in federal court. Authorities are still looking for the two remaining fugitives.

While the DEA continues to bust drug dealers and unscrupulous doctors, the diversion of opioid medication by patients is actually quite rare. A DEA report last year found that less than one percent of legally prescribed painkillers are diverted. The agency also said the prescribing and abuse of opioid medication is also dropping, along with the number of admissions to treatment centers for painkiller addiction.