A former doctor who took money to let his name be used thousands of times on bogus prescriptions was sentenced Wednesday to nine years in federal prison for conspiring to fraudulently prescribe anti-psychotic medications and sell those drugs back to pharmacies, where they were billed to the government.
Kenneth Johnson, 48, of Ladera Heights, was sentenced by U.S. District Judge S. James Otero, who ordered him to pay more than $9 million in restitution to Medicare and Medi-Cal.
Johnson was one of three defendants linked to a Glendale medical clinic to be found guilty of federal fraud charges after a three-week trial in February 2014.
Following the reading of the verdicts, Otero said, “The scope of the fraud was breathtaking,” adding that the defendants “preyed upon the poor (and) used them as pawns.”
The investigation — dubbed operation “Psyched Out” — was the first one in the nation involving an organized scheme to defraud government health care programs through false claims for anti-psychotic medications, according to the government.
The scheme’s ringleader, Lianna “Lili” Ovsepian, is serving an eight- year sentence following her guilty plea to conspiracy charges.
The manager and owner of Manor Medical Imaging, Ovsepian helped generate thousands of fraudulent prescriptions for unneeded and expensive anti- psychotic medications for “patients” who were typically low-income beneficiaries of the government-funded health care programs Medicare and Medi- Cal.
The prescriptions were issued by Johnson, who pre-signed thousands of blank forms that were filled out by Ovsepian’s mother-in-law, Nuritsa Grigoryan.
After the prescriptions were filled, the drugs were returned to Manor, the “patients” were given nominal payments of around $100, and the medications were diverted into the black market, where they were sold to other pharmacies and re-billed to health care programs as though dispensed for the first time.
Beneficiaries included veterans recruited from dual diagnosis programs for drug addiction and schizophrenia, elderly Medicare patients whose identities were stolen, and homeless people recruited from skid row.
Grigoryan, who was convicted with Johnson at trial, fled before she could be sentenced and is being sought by federal authorities, according to Assistant U.S. Attorney Ben Barron.
More than a dozen others have been convicted either through guilty pleas or by jury verdicts.
The final defendant in the case — Phic Lim, co-owner of a now-closed San Marino pharmacy affiliated with Manor Medical — is scheduled to be sentenced Friday.
— Wire reports