Guwahati: Assam’s Tonmoy Sharma, the founder and former CEO of the now-defunct Sovereign Health Group addiction treatment provider, has been arrested for allegedly submitting over $149 million in fraudulent insurance claims between 2014 and 2020.
Sharma, 61, was arrested on May 29 at Los Angeles International Airport on an eight-count federal grand jury indictment.
Sharma, a resident of Tustin, California, originally hails from Bamunimaidam in Guwahati. He is the eldest son of late political leader Phani Sarma and elder brother of Chinmoy Sharma, owner of the Anuradha cinema.
Sharma is charged with four counts of wire fraud, one count of conspiracy, and three counts of illegal remunerations for referrals to clinical treatment facilities.
According to a statement released by U.S. Attorney’s Office, Central District of California, the indictment alleges that Sharma orchestrated a sprawling healthcare fraud scheme, submitting over $149 million in fraudulent claims to health insurers, including for unneeded urinalysis tests, and paying more than $21 million in illegal kickbacks for patient referrals.
Paul Jin Sen Khor, 45, of Irvine, who worked as Sovereign’s cash management and accounts payable supervisor, has also been arrested.
At Sharma’s direction, Sovereign employees aggressively pursued patients through various forms of marketing, directing the patients to contact the company at its toll-free phone number.
Once patients called in to Sovereign’s call center, employees used various tactics to enroll patients into the company’s treatment facilities, including misrepresentations.
One such misrepresentation was that a patient’s treatment would be paid for by a foundation funded by donations from former Sovereign patients.
If convicted, Sharma faces a statutory maximum sentence of 20 years in federal prison for each wire fraud count, five years for the conspiracy count, and up to 10 years for each illegal remunerations count.
At Sharma’s direction, Sovereign submitted fraudulent claims for comprehensive urinalysis screening, including through its laboratory, Vedanta Laboratories Inc.
Sovereign patients were frequently drug tested through both cup testing and comprehensive panel testing.
The cup testing returned results within minutes, while the panel testing was much more comprehensive, with results taking several days to return.
The comprehensive panel testing screened for dozens of different substances and, accordingly, was billed at a significantly higher rate than cup testing.
Sovereign submitted thousands of claims to insurance companies, including for comprehensive panel tests that purportedly were authorized by physicians but, in reality, the physicians did not authorize the tests.
Sovereign also submitted numerous claims to the insurance companies, including urinalysis tests, after physicians were no longer working at Sovereign.
Beyond the fraudulent billing, Sharma is accused of procuring patients by paying over $21 million in illegal kickbacks to patient brokers.
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The FBI, the United States Department of Health and Human Services Office of Inspector General, and the California Department of Health Care Services are investigating this matter.
The California Department of Insurance, the United States Department of Labor Employee Benefits Security Administration, the Office of Personnel Management Office of Inspector General, and IRS Criminal Investigation provided substantial assistance in the investigation.
