A federal grand jury has charged 16 defendants with running an Oxycontin trafficking operation in Southern California in a superseding indictment announced Tuesday.
Mike Mikaelian and Anjelika Sanamian, owners of the Los Angeles clinic Lake Medical Group, allegedly worked with physicians and pharmacists to fraudulently obtain Oxycontin pills essentially for free from Medicare and Medi-Cal, Thom Mrozek, public affairs officer for the U.S. Attorney's Office, told The Huffington Post. According to an ongoing federal investigation called Operation Dirty Lake, the group then sold over a million Oxycontin pills for about $25 a pill on the street.
Fifteen defendants have all been arraigned and have pleaded not guilty since Oct. 5, including four new defendants added to the new indictment. They are ordered to stand trial in November. One defendant is a fugitive.
The Lake Medical Group allegedly used recruiters, or “cappers," who brought Medicare and Medi-Cal patients to the clinic in exchange for cash or other rewards. The paid patients were then seen by physicians based at Lake Medical Group, who would prescribe a high dosage of Oxycontin and order unnecessary tests to help justify the prescription. "Runners" then took the paid patients to pharmacies, where the patients then handed off the pills to be sold on the street.
"The problem here is that we have people that are exploiting a new program under Medicare," Mrozek told HuffPost. Mrozek was referring to Medicare's Part D program, which began in 2006 and extends prescription drug coverage to "everyone with Medicare, regardless of income, health status, or prescription drug usage," according to Medicare's web site.
Federal investigators allege that Lake Medical Group fraudulently billed Medicare approximately $4.6 million and Medi-Cal approximately $1.6 million over the course of its 18 months in operation from 2008 to 2010.
To cover up the millions of dollars in profit they made, some of the defendants avoided bank reporting requirements by making cash deposits in amounts of $10,000 or less, while others spent their proceeds gambling at casinos or purchasing cars, jewelry or more Oxycontin, investigators say.
A significant number of the prescriptions were filled at Southland pharmacies owned and operated by Arcadia pharmacist Theodore Yoon, 68, according to the indictment. Other defendants include:
- Phic Lim, 44, a pharmacist of Pasadena
- Theana Khou, 40, of Pasadena and co-owner of the Huntington Pharmacy in San Marino
- Matthew Cho, 48, a pharmacist of Irvine
- Perry Tan Nguyen, 54, of Huntington Beach and owner of St. Paul's Pharmacy in Huntington Park
- Elizabeth Duc Tran, 47, of Fountain Valley and owner of Mission Pharmacy in Panorama City and Fountain Valley
The Operation Dirty Lake investigation began in 2009 after the Bureau of Medi-Cal Fraud contacted the Department of Justice and Drug Enforcement Agency.
This week's superseding indictment comes a week after another fatal heroin overdose in what is being called a heroin epidemic among young people in Southern California. Many young heroin users started with prescription pills, such as Oxycontin.
"When they can't afford the cost of these pills or they're looking for an increased high, they're moving over to heroin," said Sarah Pullen, special agent for the DEA who worked on Operation Dirty Lake. "So we are seeing this whole new increase of heroin abuse that you can directly attribute to prescription drug abuse."
Investigators say they are as of yet unsure who exactly was illegally buying Oxycontin from the Lake Medical Group. But the demand for recreational use of the drug is present across all segments of society, Pullen told HuffPost.
"This is not just a suburban problem or an inner-city problem or a problem of a certain demographic," she said. "It's an across-the-board problem across the country."
Earlier on HuffPost:
#10 -- Al Capone ($1.3 billion)
Brooklyn-born <a href="http://www.fbi.gov/about-us/history/famous-cases/al-capone">Al Capone</a> is one of the most notorious American gangsters of all time. During prohibition, Capone "controlled a vast criminal empire that smuggled drugs and ran prostitution and gambling outfits throughout the U.S.," <a href="http://www.celebritynetworth.com/articles/entertainment-articles/20-richest-drug-dealers-time/#!/10-al-capone-net-worth-1-3-billion_1074/">Celebrity Net Worth</a> writes. Capone, at one time an influential mob boss in Chicago, was <a href="http://www.fbi.gov/about-us/history/famous-cases/al-capone">sentenced to 11 years</a> in federal prison in 1931. At the time of his death in 1947, Capone was worth over a billion dollars.
#9 -- Griselda Blanco ($2 billion)
The only woman to make it onto this list, Griselda Blanco -- known also as the "Godmother of Cocaine" -- was a ruthless drug lord for Colombia's <a href="http://en.wikipedia.org/wiki/Medell%C3%ADn_Cartel">Medellin cartel</a> during the 1970s and early 1980s. Blanco was assassinated in September by "<a href="http://www.huffingtonpost.com/2012/09/04/griselda-blanco-dead-cocaine-godmother_n_1853873.html">men on motorcycles in Colombia.</a>" Blanco had reportedly spent nearly 20 years in a U.S. prison before she was deported to her home country. At her height, Blanco is said to have been worth <a href="http://www.celebritynetworth.com/articles/entertainment-articles/20-richest-drug-dealers-time/#!/9-griselda-blanco-net-worth-2-billion_1075/">around $2 billion. </a>
#8 -- Carlos Lehder ($2.7 billion)
<a href="http://www.pbs.org/wgbh/pages/frontline/shows/drugs/interviews/toro.html">Carlos Lehder</a>, co-founder of the Medellin Cartel, is a German-Colombian drug dealer who is currently serving a <a href="http://www.celebritynetworth.com/articles/entertainment-articles/20-richest-drug-dealers-time/#!/8-carlos-lehder-net-worth-2-7-billion_1076/">55 year sentence </a>in a federal prison in the U.S.
#7 -- Orejuela Brothers ($3 billion)
Brothers Gilberto (left) and Miguel Orejuela founded Colombia's notorious <a href="http://en.wikipedia.org/wiki/Cali_cartel">Cali Cartel</a>, which "at its peak supplied 70 percent of all the cocaine in the U.S. and 90 percent of the cocaine in Europe," according to <a href="http://www.celebritynetworth.com/articles/entertainment-articles/20-richest-drug-dealers-time/#!/7-the-orejuela-brothers-net-worth-3-billion_1077/">Celebrity Net Worth</a>. Both brothers are currently serving prison sentences in the U.S.
#6 -- José Gonzalo Rodríguez Gacha ($5 billion)
<a href="http://en.wikipedia.org/wiki/Jose_Gonzalo_Rodriguez_Gacha">Jose Gonzalo Rodriguez Gacha</a> was another co-founder of the Medellin Cartel (all six of them made the top 10). Gacha, acknowledged as one of the most successful drug dealers of all time, was <a href="http://www.pbs.org/wgbh/pages/frontline/shows/drugs/cron/">killed in a bloody shootout</a> by Colombian police in 1989, PBS writes. Thousands of mourners reportedly attended his funeral. In 1988, <a href="http://www.forbes.com/sites/erincarlyle/2012/03/13/billionaire-druglords-el-chapo-guzman-pablo-escobar-the-ochoa-brothers/">Forbes Magazine</a> included Gacha in their annual list of the world's billionaires.
#5 -- Khun Sa ($5 billion)
<a href="http://www.economist.com/node/10097596?story_id=10097596&CFID=26317033&CFTOKEN=13306592.stm">Khun Sa</a>, known famously as the "Opium King," took an army of men into the jungles of Burma to cultivate opium in the 1960s. At the peak of his power, Sa had 20,000 men in his army and was trading some of the "<a href="http://www.businessinsider.com/pablo-escobar-named-richest-drug-dealer-of-all-time-2012-10">largest quantities of pure heroin ever</a>," Business Insider writes. <a href="http://www.economist.com/node/10097596?story_id=10097596&CFID=26317033&CFTOKEN=13306592.stm">Sa died in 2007</a> at the age of 73, reports the Economist.
#4 -- Ochoa Brothers ($6 billion)
The three Ochoa brothers -- <a href="http://www.pbs.org/wgbh/pages/frontline/shows/drugs/interviews/ochoajorge.html">Jorge</a> (left), Fabio (right) and Juan David (not pictured) -- founded the Medellin Cartel along with Carlos Lehder, Jose Gacha and Pablo Escobar, <a href="http://www.celebritynetworth.com/articles/entertainment-articles/20-richest-drug-dealers-time/#!/4-the-ochoa-brothers-net-worth-6-billion_1080/">Celebrity Net Worth writes.</a> All three made the <a href="http://www.forbes.com/sites/erincarlyle/2012/03/13/billionaire-druglords-el-chapo-guzman-pablo-escobar-the-ochoa-brothers/">Forbes' first World's Billionaires list</a> in 1997 and Jorge and Juan David are said to have been worth $6 billion each at the peak of their success (<a href="http://www.celebritynetworth.com/articles/entertainment-articles/20-richest-drug-dealers-time">Fabio's net worth is unknown</a>). The Ochoa brothers, all of whom have spent time behind bars, have since lost their fortunes. While his two brothers have since been released from prison, <a href="http://www.pbs.org/wgbh/pages/frontline/shows/drugs/cron/">Fabio Ochoa</a> is <a href="http://en.wikipedia.org/wiki/Fabio_Ochoa_V%C3%A1squez">serving a 30 year sentence</a> at a federal prison.
#3 -- Dawood Ibrahim Kaskar ($6.7 billion)
<a href="http://en.wikipedia.org/wiki/Dawood_Ibrahim#Recent_events">Dawood Ibrahim Kaskar</a> is "<a href="http://www.businessinsider.com/pablo-escobar-named-richest-drug-dealer-of-all-time-2012-10">India's most wanted criminal</a>," Business Insider writes. The head of the Indian organized crime syndicate D-Company in Mumbai, Kaskar is currently on Interpol's wanted list of organized crime and counterfeiting. Earlier this year, Kaskar's name was in the news again when a UK court <a href="http://www.hindustantimes.com/world-news/Europe/UK-court-orders-extradition-of-Dawood-s-aide/Article1-849884.aspx">ordered the extradition of his aide, Tiger Hanif</a> -- who is wanted in India for his alleged involvement in the planning of two bomb attacks in Gujarat in 1993, the Hindustan Times writes. For more, watch this video on <a href="http://www.youtube.com/watch?v=tXB1m2ZPuig">News X Live.</a>
#2 -- Amado Carrillo Fuentes ($25 billion)
Mexican drug kingpin <a href="http://en.wikipedia.org/wiki/Amado_Carrillo_Fuentes">Amado Carrillo Fuentes</a> became the head of the Juarez Cartel after assassinating his boss Rafael Guajardo. Fuentes, known as "Lord of the Skies" because of the large fleet of airplanes he used to transport drugs, was described as <a href="http://www.justice.gov/opa/pr/1999/September/432crm.htm">one of the most powerful drug traffickers in the world</a> by the U.S. Drug Enforcement Administration in 1999. Fuentes eventually died in a Mexican hospital in 1997 after <a href="http://www.businessinsider.com/pablo-escobar-named-richest-drug-dealer-of-all-time-2012-10">undergoing extensive plastic surgery</a> to change his appearance, Business Insider notes.
#1 -- Pablo Escobar ($30 billion)
With his fellow Medellin Cartel co-founders all making the list, it seems appropriate that drug kingpin <a href="http://en.wikipedia.org/wiki/Pablo_Escobar">Pablo Escobar</a> -- the leader of the largest cocaine organization in history -- would top this list with a peak net worth of $30 billion. As Celebrity Net Worth notes, when Escobar "<a href="http://www.celebritynetworth.com/articles/entertainment-articles/20-richest-drug-dealers-time/#!/1-pablo-escobar-net-worth-30-billion_1083/">was eventually captured, the Colombian government built him a luxurious prison called La Catedral.</a> He eventually escaped and was gunned down in 1993 on the roof of a Medellin apartment." And if Escobar was included on the <a href="http://www.forbes.com/billionaires/list/">Forbes Billionaire rankings today</a>? <a href="http://www.businessinsider.com/pablo-escobar-named-richest-drug-dealer-of-all-time-2012-10">He'd be tied for seventh place</a>, notes Business Insider.