A former Stifel, Wells Fargo and Morgan Stanley advisor will spend 3 1/2 years in jail for serving to run a scheme that defrauded public medical insurance plans of $4 million.
Along with a 41-month jail time period, a New Jersey federal decide sentenced Kaival Patel to pay $4.72 million in restitution to victims of his scheme. Patel was convicted final December of 1 rely of conspiracy to commit wire fraud, well being care fraud and several other counts of cash laundering.
“This defendant lined his personal pockets by making the most of medical insurance plans for New Jersey state and native authorities workers, defrauding them of thousands and thousands of {dollars} by conspiring to acquire reimbursements for medically pointless compound prescription medicines,” U.S. Lawyer Phillip Sellinger mentioned in a press release.
In accordance with the Justice Division, Patel created an organization along with his spouse to market compound prescription medicines. Compound medicines are specialty medicines combined by pharmacists for sufferers’ particular wants and require a doctor’s prescription.
In 2015, Patel and several other others realized that a number of New Jersey state insurance policy would reimburse authorities workers 1000’s of {dollars} for sure prescribed compound medicines, together with nutritional vitamins, scar, ache and libido lotions, and acid reflux disease medicines, in accordance with the DOJ.
So Patel hatched a plan to prescribe compound medicines to sufferers who didn’t want them so he might pocket the commissions on the meds.
However the conspirators wanted a physician, so Patel went to Saurabh Patel, a Newark-based doctor (and relative of the defendant). Saurabh Patel agreed to signal the defective prescriptions (and later pleaded responsible to insurance coverage fraud, in accordance with the DOJ).
Kaival Patel then paid a gaggle of corrections officers to go to the physician to get the defective prescriptions. The defendant additionally conspired with a pharmacist so as to add pointless substances to the meds to spice up the prices (and his income) much more.
In accordance with SEC information, Kaival Patel joined the business in 2002 at AXA Advisors. After a short stint at Morgan Stanley from September 2010 by means of June 2011, he moved to Wells Fargo in August 2011. He stayed till 2018, when he moved to Stifel. The agency fired him in January 2022 after “being named in an indictment in United States District Court docket,” and FINRA barred him in Could 2022.
In accordance with the DOJ, about 48 individuals have pleaded responsible or been convicted in relation to the conspiracy.
