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Armenian-American Clinicians Arrested for OxyContin Insurance Fraud Scheme

A federal indictment charges 14 people, including an 88-year-old doctor and two Armenian-American operators of a Los Angeles clinic, with running a scheme to illegally obtain and distribute OxyContin pills, carried out largely through insurance fraud, reports the Los Angeles Times.

The indictment stemmed from of a two-year investigation. Ten of the defendants were arrested Thursday morning, officials said.

The distribution ring was allegedly run out of Lake Medical Group, where doctors reportedly wrote prescriptions for the powerful painkiller to uninsured patients who did not need it, federal officials said. Defendants also allegedly obtained the pills from pharmacies by fraudulently billing public insurance programs such as Medicare.

Then members of the organization allegedly resold more than 1 million pills on the street for $23 to $27 a pill, raking in millions of dollars in profits.

The indictment also alleged that in some cases the defendants stole people’s identities and Medicare beneficiary information so they could obtain the OxyContin.

Clinic operators Mike Mikaelian, 43, of East Hollywood and Anjelika Sanamian, 52, of Van Nuys allegedly orchestrated the scheme. Two doctors — Morris Halfon, 88, and Eleanor Santiago, 73 — are accused of prescribing the pills to people who had no medical need for them. The other defendants allegedly assisted in the plot by serving as runners, recruiters or posing as patients.

The defendants all face charges of drug conspiracy or healthcare fraud. Mikaelian is also charged with wholesale distribution of OxyContin. The maximum sentences range from 10 to 40 years.