A panel of jurors in Houston will determine whether a local man who was the CEO of a company that ran 14 pharmacies is guilty of perpetrating a $160 million fraud on the government or if he was operating within the bounds of the law, as his defense attorneys claim.
Opening statements came Tuesday morning in the trial of Mohamed Mokbel. He is facing 15 charges — including conspiracy to commit healthcare and mail fraud, healthcare fraud, money laundering, bribery and conspiracy to commit bribery — related to his role in what prosecutors described as a four-part scheme.
Assistant U.S. Attorney Adam Goldman told jurors Mokbel was the mastermind of a scheme that targeted internet users with pop-up advertisements offering to mail them drugs used to treat diabetes. Part one of the alleged scheme, he said, involved paying a kickback to the individuals at call centers in the Philippines who fielded those responses and reached out to the potential patients to collect their personal medical data.
Each time that data was handed over to Mokbel, he would pay between $20 and $40, Goldman said.
“That’s called a kickback,” he said.
The next step, Goldman said, was filing so-called “test claims” to see what the reimbursement rates would be for certain drugs and whether Medicare would cover the treatment.
“There was no doctor involvement,” he said. “There was no patient asking for this.”
For one particular tube of cream used to treat skin pain and irritation, Goldman said the reimbursement was $900, and said that equated to “liquid gold” for Mokbel.
The next step was sending faxes to “thousands” of doctors across the country to get them to sign for the medications to be mailed to the patients. Goldman said jurors could expect to hear from both doctors who were “bamboozled” by the scheme and signed off on the prescriptions, and from those who allegedly recognized it as a scam.
Goldman also told jurors they could expect to hear testimony from someone the government has labeled as a coconspirator who has entered a guilty plea.
The fourth part of the alleged scheme, Goldman told jurors, involved money laundering — using the funds received from allegedly bogus Medicare reimbursement to fund the purchase of homes and gambling trips to Las Vegas.
“The only money he had, the only money that could have paid for these things, came from this illegal scheme,” Goldman said.
Charles Flood of Flood and Flood, who represents Mokbel, told jurors his client operated a legitimate business that at one time employed 100 people across 14 pharmacies.
“These patients were not cold called, they voluntarily opted in to this,” Flood said during opening statements Tuesday morning. “This is a prescription signed by their doctors. To suggest that hundreds of thousands of doctors in this case were bamboozled is ridiculous.”
Flood told jurors that paying a “lead generator,” like those working the call center in the Philippines, is within the bounds of the law and something that occurs all the time in the industry. “No one got cheated. Everyone got paid for the service they provided.”
U.S. District Judge Lee Rosenthal told jurors the trial will likely be done by the end of next week. Including alternates, a panel of 15 jurors was selected Monday for the trial.
Mokbel is also represented by John D. Cline of San Francisco.
The federal government is also represented by Kathryn Olson and Zahra Fenelon of the U.S. Attorney’s Office in Houston.
The case number is 4:21-cr-00103.