The CEO of a company that operated 14 pharmacies mostly in the Houston area was convicted by a jury Tuesday afternoon on 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, $160 million scheme.
Mohamed Mokbel, former CEO of 4M Pharmacies, had argued that all he was guilty of was trying to compete with the powerful pharmacy benefit managers that administer prescription drug programs for health plans and control 80 percent of the market.
But the government argued, and the jury seemingly agreed, that he actually orchestrated a complex scheme to illegally solicit possible patients via pop-up advertisements online. For these “leads,” Mokbel would pay a third-party entity between $28 and $40 for each potential patient, jurors were told.
Once the would-be clients answered questions after clicking the ad offering mail-order pain and diabetes medication, they would receive a call from a Mokbel-affiliated call center in the Philippines or Egypt seeking additional information from the potential customer, including a Medicare identification number. Armed with that number, prosecutors alleged, Mokbel would have other employees based in Houston run “test claims” to see the Medicare reimbursement rates. He then would contact the prospective patient’s doctor via fax, claiming they had requested certain medication.
Some doctors signed off on the faxed request, while others called it a scam, jurors heard in testimony.
Finally, with a doctor’s prescription in hand, each patient would be contacted by another Mokbel employee who would tell those patients their doctor had ordered medication for them — usually Omega-3 pills or calcipotriene cream, which is used to treat psoriasis. Prosecutors alleged those medications were chosen because of their high reimbursement rates.
Jurors heard testimony from patients who didn’t want the medication and were confused about the recurring deliveries.
Prosecutor Kathryn Olson told the jury during closing arguments Tuesday morning that the alleged scheme ran on “lies, cheating, kickbacks and bribes.”
“Mr. Mokbel should have never had these patients’ information in the first place,” she said, alleging the way Mokbel sought and received patient leads was illegal. “Mr. Mokbel cheated by using this illegal shortcut — he purchased his patients.”
Olson also told jurors Mokbel had “deceived” the doctors who believed their patients needed the medication and “lied” to get them to sign the prescription.
Charles Flood of Flood and Flood, Mokbel’s defense attorney, maintained during closing arguments Tuesday that his client was simply trying to compete with the pharmacy benefit managers, three of which are among the top 10 largest companies in the country, he said.
“This case is about patients and doctors,” he said. “The doctors signed the prescriptions. The government, of course, wants to downplay that.”
Flood argued it was absurd for the government to argue Mokbel had “bamboozled” thousands of doctors who signed prescriptions for their patients.
“The prescription is valid,” he said, arguing that there can be no fraud if Mokbel is accused of dispensing doctor-prescribed medication to patients and seeking reimbursement for doing so at set rates.
“There’s no fraud,” Flood said. “[He] sent the medication pursuant to a valid prescription.”
At about 3:40 p.m. Tuesday, roughly one hour before the jury returned its unanimous verdict, the panel sent a question to the court asking for clarification on the contours of the Anti-Kickback Statute.
Mokbel will be sentenced at a later date by U.S. District Judge Lee Rosenthal, who presided over the trial that began with testimony Oct. 1. The conspiracy charge carries a maximum sentence of 20 years in prison and the healthcare-related and money laundering charges are punishable by up to 10 years in prison.
Mokbel is also represented by John D. Cline of San Francisco.
Assistant U.S. Attorney Adam Goldman also prosecuted the case.
The case number is 4:21-cr-00103.