Doctor sentenced 9 years in $20 million clinic scandal tied to fraudulent prescriptions

The physician at the center of a multimillion conspiracy to defraud Medi-Cal and Medicare has been sentenced to nine years in federal prison, the U.S. Attorney's Office announced. Dr. Kenneth Johnson, 49, is one of three found guilty following a 2014 trial and an investigation authorities dubbed "Operation Psyched Out".

Johnson's sentence is the result of his role in a scheme that spawned fraudulent prescriptions for pricey anti-psychotic medications, drugs for which the government was re-billed "over and over", authorities said. Johnson pre-signed thousands of prescriptions that were used to fill fraudulent orders. Employees of Manor Medical then generated thousands of prescriptions for identity theft victims, including elderly Vietnamese Medicare/Medi-Cal beneficiaries, military veterans recruited from drug rehab programs as well as others. Those participating in the scheme either created or altered patient files to make it look like the anti-psychotic drugs were needed and the treatment was legitimate. After prescriptions were filled and paid for by Medicare and Medi-Cal, they were sold on the black market and redistributed to pharmacies "where the drugs would be subject to new claims made to Medicare and Medi-Cal as though they were new bottles of drugs," the attorney's office said.

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Authorities called the case a first for the nation involving an organized scheme to bilk government healthcare programs using false claims for anti-psychotic drugs. Upon handing out the sentence, District Judge S. James Otero observed that Dr. Johnson's role in the scheme caused significant loss, and the severity of his sentence was necessary to deter other physicians from engaging in this type of fraud. Judge Otero also called the scheme particularly devious since those involved believed they had honed in on under-the-radar drugs in the hopes of evading detention by law enforcement. The scheme produced more than $20 million in false billings, of which Medi-Cal and Medicare paid more than $9 million.

"Dr. Johnson essentially sold his prescription pad when he became part of the conspiracy that defrauded the government out of millions of dollars," said United States Attorney Eileen M. Decker. "Johnson played a crucial role in this scheme, which could not have functioned without his medical license lending an air of legitimacy to the clinic."

The attorney's office said the manager and owner of the clinic, Lianna "Lili" Ovsepian, 35, was sentenced to eight years in prison. Her brother, Artak Ovsepian, 34, who was tried along with Johnson, will spend 15 years in prison. Nuritsa Grigoryan, 51, who was the third person convicted at trial, held an Armenian medical license but masqueraded as an American doctor when she saw homeless "patients". She filled out the fake prescriptions pre-signed by Johnson, but fled the United States after being found guilty. The USAO says she is still a fugitive.

Twitter: @BethJSanborn