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Newark Doctor Admits to Compound Medication Healthcare Fraud

Newark

By: Yuritza Arroyo

Federal officials announced that a doctor who owns a medical clinic in Newark today admitted defrauding state and local health benefits programs and other insurers by submitting fraudulent claims for medically unnecessary prescriptions.

According to federal authorities, Saurabh Patel, 51, of Woodbridge, pleaded guilty by videoconference to a superseding information charging him with one count of conspiring to commit health care fraud.  

Officials say Saurabh Patel was previously charged by indictment with conspiring in the health care fraud scheme with a family member, Kaival Patel, 52, of West New York.  

Kaival Patel was also charged with conspiracy to commit money laundering, substantive counts of money laundering, and making false statements to federal agents.  

He is scheduled to proceed to trial later this year.

According to court documents and statements made in Court:

Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient.  

Court documents state although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredient.

Patel is a medical doctor who owns and operates a clinic in Newark.  

Despite having no background in pharmaceuticals or medicine, Kaival Patel and his wife created and operated a company called ABC Healthy Living LLC (ABC) to market medical products and services, including compound prescription medications.

According to authorities, a pharmaceutical sales representative, Paul Camarda, also created a company and worked with Kaival Patel to promote compound medications.  

Camarda pleaded guilty in Camden federal court on July 6, 2021, to health care conspiracy and conspiring to commit money laundering and obstruct justice. He awaits sentencing.

The conspirators learned that particular state and local government employees had insurance that would reimburse up to thousands of dollars for a one-month supply of certain compound medications.  

Authorities say Kaival Patel and Camarda approached Saurabh Patel and convinced him to authorize prescriptions for the compound medications for which they received commissions, regardless of whether or not those prescriptions were medically necessary.

The conspirators steered individuals who were paid to receive the compound medications to Saurabh Patel’s medical practice to receive his authorization on the fraudulent prescriptions.  

This enabled Saurabh Patel to receive insurance payments for those patient visits and procedures.  

In addition to the people steered to Saurabh Patel’s medical practice as part of the scheme, Kaival Patel also instructed Saurabh Patel on which insurance companies covered the compound medications and requested that he prescribe those medications to existing patients of his practice with those insurance plans in order to benefit Kaival Patel and his wife further.

Saurabh Patel faces a maximum penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for June 27.

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