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Drug Fraud Earns Glendale Clinic Owner Prison

The owner of a Glendale medical clinic was sentenced on Monday to eight years in federal prison for orchestrating a prescription drug fraud that bilked the government out of more than $9 million. Lianna “Lili” Ovsepian, 33, of Tujunga, also was ordered to pay $9.1 million in restitution by U.S. District Court Judge James Otero in Los Angeles. Last November, she pleaded guilty to conspiracy to commit health care fraud and identity theft. Ovsepian was the owner of Manor Medical Imaging Inc. In the drug scheme, co-conspirator Dr. Kenneth Johnson pre-signed thousands of blank prescriptions, which were later filled out by Ovsepian or her mother-in-law for expensive anti-psychotic medications, according to the U.S. Attorney’s Office in Los Angeles. “Patients” – usually low-income beneficiaries of Medicare or Medi-Cal – were taken to pharmacies where the prescriptions were filled. The drugs then were returned to Manor Medical and the “patients” were paid nominal amounts, usually around $100. The drugs were then sold on the black market to other pharmacies and re-billed to health care programs as though the drugs were being dispensed for the first time, according to proseuctors. Between September 2009 and October 2011 when authorities closed down the fraud, Medi-Cal and Medicare were billed more than $20 million. The programs paid more than $9.1 million to pharmacies based on more than 14,000 claims submitted, prosecutors wrote in a sentencing brief. A total of 16 defendants have been convicted either through guilty pleas or by jury verdicts. In a trial earlier this year, Johnson, Ovsepian’s mother-in-law and her brother were found guilty of sevearal charges related to the scheme and are awaiting sentencing. The investigation in this case, which was called Operation “Psyched Out,” was conducted by nine law enforcement agencies, including the Glendale Police Department and the California Department of Justice.

Joel Russel
Joel Russel
Joel Russell joined the Los Angeles Business Journal in 2006 as a reporter. He transferred to sister publication San Fernando Valley Business Journal in 2012 as managing editor. Since he assumed the position of editor in 2015, the Business Journal has been recognized four times as the best small-circulation tabloid business publication in the country by the Alliance of Area Business Publishers. Previously, he worked as senior editor at Hispanic Business magazine and editor of Business Mexico.

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