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State Busts Alleged Compound Drug Ring

Orange County prosecutors and the California Department of Insurance say they have broken up a kickback scheme that paid doctors to prescribe unnecessary compound medications, order unnecessary tests and bilked California employers out of $23.2 million. The alleged scheme involved 26 doctors, pharmacists and business owners (see list) and affected at least 13,000 workers' comp claimants.

Prosecutors allege the physicians were paid a kickback every time they prescribed a compounded cream or repackaged oral medication. Kickbacks were also paid for ordering urine drug tests – a recent source of fraud and abuse of the workers' comp system. Original bills for the services totaled over $40 million.

The scheme was allegedly organized by the owners of Monarch Medical Group – Tanya Moreland King and her husband Christopher King of Beverly Hills. The couple also own and run King Medical Management that handles medical billing and One Source Laboratories that did the urine testing.

The FBI and the National Insurance Crime Bureau also participated in the investigation. Allegedly 27 carriers were hit by the scheme.

Others charged in the case are Irvine pharmacists Charles Bonner and Mervyn Miller. The two own Steven’s Pharmacy and allegedly mass produced and sold over $1 million of compounded creams to the Kings for $15 to $40 per tube. The Kings allegedly marked up the creams to $250 to $700 per tube and submitted the bills to carriers. The creams are not FDA approved and have not been tested for medical efficacy. The creams were not compounded for any specific patient.

Prosecutors allege the Kings paid either a flat fee per prescription or struck deals with the physicians to split the profits. Similar deals were reached for the repackaged drugs and the urine tests. The participating providers span the state and payments ranged from $11,000 to $345,000, according to prosecutors. Overall, the scheme allegedly paid out over $2 million in illegal kickbacks to the physicians.

Under new anti-fraud rules, any and all liens filed by these individuals and their companies are automatically stayed pending the outcome of the criminal cases.


Tanya King, 37, Beverly Hills

Dr. William Pistel, 53, Modesto

Christopher King, 38, Beverly Hills

Dr. Kevin Park, 49, Buena Park

Charles Bonner, RPh., 56, Irvine 

Dr. Kourosh Shamlou, 49, Newport Coast

Mervyn Miller, RPh., 66, Irvine

Dr. Mannie Joel, 67, Pleasanton

Rafael Chavez, P.A., 53, Apple Valley

Dr. Parvez Fatteh, 46, Pleasanton

Dr. Jerome Robson, 68, Modesto 

Dr. Robert Fenton, 68, Ranchos Palos Verdes

Dr. Eric Schmidt, 63, Santa Rosa

Dr. Michael Henry, 61, Granite Bay

Dr. Chris Chen, 55, Pleasanton 

Dr. Howard Oliver, 70, Long Beach

Dr. Duke Ahn, 49, Los Alamitos

Dr. Eduardo T. Lin I, 55, Pleasanton

Dr. Robert E. Caton, 65, Modesto

Dr. Paul Kaplan, 76, Folsom

Dr. Ismael Silva Jr., 63, Newport Coast

Dr. Mohamed Ibrahim, 40, Danville

Dr. Ismael Geli Silva, 38, Huntington Beach

Dr. Jonathan Cohen, 57, Modesto

Dr. Paul A. Stanton, 54, Victorville

Dr. John Casey Jr., 65, Modesto


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