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Dr. Arun Sharma Sentenced to Prison and Ordered to Forfeit More Than $43 Million in Cash/Property Gained Through Fraud

HOUSTON—Dr. Arun Sharma, 56, of Kemah, Texas, has been sentenced to 15 years for engaging in a conspiracy with his wife, Dr. Kiran Sharma, to commit health care fraud and committing health care fraud over a 10-year-period in the Southern District of Texas, United States Attorney José Angel Moreno announced today.

United States District Judge David Hittner handed down the prison sentence today and further ordered Sharma to forfeit more than $43 million, including their $700,000 home in Kemah, Texas, numerous parcels of real property, more than $700,000 in cash found during a search of their Kemah home, more than $800,000 in cash found in two safe deposit boxes and a number of investment accounts funded with the proceeds of their fraudulent scheme. At the conclusion of the sentencing, Sharma was remanded back into the custody of the U.S. Marshals Service.

Arun Sharma (Dr. A) pleaded guilty to one count of conspiracy and one count of health care fraud before United States District Judge David Hittner on April 26, 2010. During his plea, Dr. A admitted that from Jan. 1, 1998, through June 10, 2009, he and Kiran Sharma (Dr. K) fraudulently billed Medicare, Medicaid and various private health care providers for medical procedures that were not performed.

During the time period of the conspiracy, the defendants owned and operated multiple medical clinics operating under the name Allergy, Asthma, Arthritis Pain Center, with two principle locations in Baytown and Webster, Texas. While some of patients at the clinics were referred by other medical doctors, approximately 50 percent of the patients came to the clinics through word of mouth. Dr. A Sharma was known as an easy touch for prescribing the “pain cocktail” of hydrocodone, Xanax and Soma. As time went on, Dr. A began prescribing stronger narcotics such as Oxycontin, morphine, methadone, and fentanyl patches.

In addition to the prescription of narcotics, a large part of the practice conducted at the clinics was to provide patients with injections of lidocaine combined with steroids which at times provided temporary relief of various joint and muscle pain. Although the injections given to the patients were superficial, they were billed falsely to the insurance companies as facet joint injections, paravertebral injections, sacroiliac nerve injections, sciatic nerve injections, and various nerve block injections.

The pain management practice at the clinics grew quickly during the time period of the conspiracy. Dr. A and Dr. K went from seeing an average of 50-60 patients per day in 1998 to more than 100 per day beginning in 2003 with a high of 279 on Jan. 6, 2005. From 1998 through 2002, Dr. K saw pain patients at the clinics in addition to her own allergy patients. Dr. K, who maintained a modest allergy practice, would sign patient procedure forms and superbills, falsely indicating that she had administered facet joint injections or other paravertebral injections when in reality she did not. She also prescribed the pain cocktail when she saw pain management patients.

Nearly every patient was prescribed one or more controlled substances and put on a regimen of shots every two weeks. The patients were required to sign the medical progress and procedure notes in their patient chart to prove they were at the clinic and received the shots. Dr. A tried to convince all patients to have shots at every visit, but many of the patients did not want the shots every two weeks. For those patients who ultimately refused the shots, Dr. A regularly required the patients to sign the progress and procedure notes even though they received only a prescription for controlled substances and did not receive any injections. By the beginning of 2000, Dr. A was having certain patients sign blank procedure/progress notes and then using those forms to generate a superbill in order to bill the insurance companies for injection procedures on days when the patient was not in the clinic.

Dr. K hired several foreign medical graduates (FMGs) over the course of the conspiracy to assist in the movement of patients through the clinics. Several of the FMGs helped add fictitious patient examination information to the blank progress/procedure notes after Dr. A had added non-existent medical procedures to the blank forms so that insurance companies could be billed as if the person had been in the clinic when in reality they had not. Dr. K witnessed the FMGs creating the fictitious patient progress/procedure notes and knew that their ultimate purpose was to bill the insurance companies for procedures that never occurred.

Demonstrative of the implausibility of the volume of patients who allegedly received injections is the fact that the defendants’ own records purport to show that more than 100 patients purportedly received injections on 708 different days during the conspiracy. Further, the defendants’ billings showed that as many as 279 patients allegedly received injections on Jan. 6, 2005.

Dr. Kiran Sharma, who also has been convicted of conspiracy and health care fraud after pleading guilty in April 2010, is scheduled to be sentenced on Feb. 23, 2011. She remains in custody at the Federal Detention Center in Houston pending sentencing.

The criminal charges are the result of a joint investigation conducted by agents of the FBI, the United States Department of Health and Human Services-Office of Inspector General, the Medicaid Fraud Control Unit of the Texas Attorney General’s Office, the Office of Personnel Management-Office of Inspector General, the Railroad Retirement Board-Office of Inspector General, the Drug Enforcement Administration and the National Insurance Crime Bureau. The case is being prosecuted by Assistant United States Attorneys Al Balboni and Jason Varnado.

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