Two Huntington Beach residents, including a doctor, are among four defendants indicted in connection with a scheme that federal prosecutors said used bogus pain clinics to funnel about $22 million from military and union insurance providers by billing for fraudulent prescriptions for compound creams.
The four are named in a grand-jury indictment that lists 48 federal charges related to healthcare and mail fraud, money laundering and illegal kickbacks, according to federal court records.
Dr. Michael Edwards, 52, of Huntington Beach, a physician, and Sara Samhat, 45, a marketer from Huntington Beach, surrendered Wednesday at the federal courthouse in Santa Ana, authorities said.
James Nate Bell, 38, of Anaheim Hills and Regina Piehl, 66, of Pacific Palisades were arrested Tuesday, according to the U.S. attorney’s office.
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Prosecutors said marketers recruited beneficiaries of Tricare and the International Longshore and Warehouse Union’s Pacific Maritime Assn. Welfare Plan who were paid $200 to visit “pain clinics” in Lawndale and National City between 2013 and 2016 under the pretense of participating in pain studies to evaluate the effectiveness of the creams.
Bell is the owner of Professional Compounding Pharmacy in La Habra and Brea, as well as two medical marketing companies that prosecutors allege were used to funnel kickbacks to marketers.
According to the indictment, Piehl was affiliated with companies that received and paid kickbacks to refer and obtain prescriptions for Bell’s pharmacy.
The indictment alleges that Edwards coordinated with Piehl to conduct “sham clinical pain studies” that “purported to analyze the effectiveness of compound creams and related compound medications as an alternative to commonly prescribed oral medications such as opioids for the treatment of pain” while recruiting patients who had insurance that pays high reimbursement rates.
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Compound medications are created when a pharmacist combines, mixes or alters ingredients of a drug to tailor it to a patient.
Prosecutors allege Edwards knew Tricare would pay as much as $3,000 to $10,000 per tube of cream and that as a result of the scheme, Tricare was defrauded of about $19 million and the ILWU plan of about $3 million spent on high-priced, unnecessary prescriptions.
Trial for the defendants is set for March 31, according to the U.S. attorney’s office.
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