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West New York Financial Advisor Convicted in $4M Health Care Fraud Scheme
Kaival Patel, a 54-year-old financial advisor from West New York, has been convicted on 11 counts related to a multimillion-dollar scheme defrauding public health insurance plans.
MORRISTOWN, NJ - Kaival Patel, a West New York financial advisor, was convicted on December 7, 2023, of orchestrating a complex fraud against public health insurance plans, as announced by U.S. Attorney Philip R. Sellinger. The scheme, which involved over $4 million in fraudulent transactions, targeted insurance plans for New Jersey state and local government employees.
Patel's conviction came after an 11-day trial before U.S. District Judge Robert B. Kugler. He was found guilty of one count of conspiracy to commit wire fraud and health care fraud, four counts of health care fraud, one count of conspiracy to commit money laundering by transacting in criminal proceeds, and five counts of money laundering by transacting in criminal proceeds.
"This defendant lined his own pockets by taking advantage of health insurance plans...defrauding them of millions of dollars," stated U.S. Attorney Philip R. Sellinger. He emphasized the commitment of law enforcement partners to investigate and prosecute those who abuse and defraud the health care system.
Special Agent in Charge James E. Dennehy of the FBI – Newark, highlighted the persistent issue of fraudulent schemes in the healthcare sector. He warned that such criminal activities inevitably lead to federal prison sentences, as evidenced by Patel's conviction and the prior convictions of dozens of others involved in similar frauds.
IRS – Criminal Investigation's Special Agent in Charge, Tammy L. Tomlins, commended the investigative efforts that led to today's conviction. She stressed the importance of protecting the integrity of healthcare systems from such fraudulent activities.
The trial revealed Patel's methodical approach to fraud. He operated a company named ABC Healthy Living LLC to market compound prescription medications. These medications, usually tailored to individual patient needs, became tools for fraud under Patel's scheme. He conspired with a family member, a medical doctor, to authorize unnecessary prescriptions for patients. Patel and his co-conspirators also paid corrections officers to receive these fraudulent prescriptions.
Patel further conspired with a compounding pharmacist to add unnecessary ingredients to the medications, inflating their costs and his illicit profits. He then engaged in financial transactions to receive proceeds from this healthcare fraud.
To date, the overarching conspiracy has seen about 47 individuals convicted or pleading guilty.
Patel now faces a maximum penalty of 20 years in prison and significant fines for his primary conviction count. Additional counts could be added to this sentence. His sentencing is scheduled for April 10, 2024.
The investigation leading to the conviction was a collaborative effort involving the FBI’s Atlantic City Resident Agency, IRS - Criminal Investigation, and the U.S. Department of Labor, Office of Inspector General, Northeast Region.
The case was represented by Assistant U.S. Attorneys Daniel A. Friedman of the Criminal Division in Camden and DeNae M. Thomas of the Health Care Fraud Unit.
This conviction marks a significant step in combating healthcare fraud in New Jersey, sending a clear message about the consequences of such criminal activities.
