State News : Texas

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Last week, a Dallas federal grand jury returned an indictment charging eight individuals – including three doctors active in the Texas Workers’ Comp System – with defrauding the federal workers’ comp program through excessive, unscrupulous, and fraudulent prescriptions for compound drugs. The indicted defendants included doctors Leslie Benson, Michael Taba, and Kevin Williams, as well as James Noryian, David Nourian, Christopher Rydberg, Sherri Mofid, and Leyla Nourian. Each individual was charged with one count of conspiracy to commit health care fraud. James Noryian, David Nourian, Rydberg, Mofid, and Leyla Nourian were also charged with one count of money laundering.

According to the indictment, from May 2014 to March 2017, James Noryian, David Nourian, and Rydberg operated Ability Pharmacy, Industrial & Family Pharmacy, and Park Row Pharmacy (the Pharmacies), and used the Pharmacies to file claims for reimbursement for compound drugs (creams used to treat, scars, wounds, and pain) with the federal workers’ compensation program. The federal reimbursement rates provided up to $28,000 per container for the compounded drugs.

The doctors in the scheme were paid by Mofid, Rydberg, and Leyla Nourian to refer patients to the Pharmacies and to encourage prescriptions for compound drugs. Payments were presented as loans in effort to conceal their purpose as a kickback for sending prescriptions to the pharmacies. James Noryian is alleged to have also paid doctors make unnecessary and excessive prescriptions through payments, free rent, and by other means.

Dr. Taba allegedly allowed James Noryian and employees from Ability to work with Dr. Taba’s staff to fill out prescriptions for the compound drugs, to stamp Dr. Taba’s signature on the prescriptions, and to then follow up with patients to encourage them to obtain prescriptions from the Pharmacies. Additionally, Dr. Taba allegedly instructed his employees to review the patient schedule each day and to write prescriptions for compound drugs for each patient. Each prescription was identical and not specifically tailored to any individual’s needs. Dr. Taba allegedly received payment for his participation in the scheme.

Dr. Benson allegedly enjoyed a rent-free office as well as other inducements and payments courtesy of James Noryian. In exchange, Dr. Benson wrote prescriptions for compound drugs – whether the patients needed the drugs or not – and referred patients to the Pharmacies.

Dr. Williams allegedly wrote prescriptions for wound and scar medications even though the patients had not had surgery. Additionally, Dr. Williams is alleged to have written prescriptions with the intent that refills be automatic, and to have received prefilled out prescription forms from James Noryian. The indictment alleges that Dr. Williams alone was responsible for $90 million in prescriptions being billed to the federal workers’ comp program.

The indictment is just the first step in the process toward trial. We’ll keep you posted on the outcome.