LOS ANGELES—The operator of the now-defunct 1-800-GET-THIN ad campaign and a Beverly Hills-based company he controlled were found guilty Dec. 16 of using fabricated sleep studies to persuade insurance companies to pay out tens of millions of dollars for Lap-Band surgery.
Julian Omidi, 53, of West Hollywood, and Surgery Center Management (SCM) were found guilty of 28 federal counts of wire fraud and three counts of mail fraud.
Omidi also was found guilty of two counts of making false statements relating to health care matters and one count each of aggravated identity theft and money laundering. Additionally, Omidi and SCM were found guilty of one count of conspiracy to commit money laundering, according to the U.S. Attorney’s Office.
Co-defendant Dr. Mirali Zarrabi, 59, of Beverly Hills, was acquitted of all charges.
The verdicts came on the third day of deliberations in Los Angeles federal court.
The Lap-Band is a silicone ring that is surgically implanted around the stomach to discourage overeating. The weight-loss-surgery business was widely advertised on Southern California freeway billboards, radio, and television, attracting people desperate to shed excess pounds.
But before insurance companies would pre-approve the $100,000 surgery, prospective patients had to show they suffered from certain afflictions, including sleep apnea.
Assistant U.S. Attorney Ali Moghaddas told jurors that Omidi created a process that turned “patients into profits” by directing employees to “falsely diagnose patients with a sleep disorder they didn’t have.”
The defense argued that the defendants were victims of a sleep-study con-man named Charles Klasky, who “posed as an expert in sleep medicine” and tricked Omidi into allowing him to oversee the sleep-study program.
Klasky is awaiting sentencing after pleading guilty to a federal conspiracy charge.
Prosecutors told the jury that patients were harmed as a result of the scheme when they were subjected to unnecessary medical procedures and that insurance providers were conned out of millions of dollars after receiving fraudulent bills.
Omidi, whose medical license was revoked in 2009, established procedures requiring prospective patients—even those covered by insurance plans he knew would never cover Lap-Band surgery—to have at least one sleep study, and employees were offered commissions to make sure the studies occurred.
“He decided every patient would get a sleep study,” the prosecutor said, adding that the scheme “got the patients in the door with false promises, gave them false hope, and billed their insurance companies with false claims.”
The U.S. Attorney’s Office maintained that after patients underwent sleep studies—often with little indication that any doctor had determined the study was necessary—GET THIN employees, acting at Omidi’s direction, falsified the results to reflect that the patient had moderate or severe sleep apnea, and that they suffered from severe daytime sleepiness.
Omidi then caused those falsified reports to be used in support of GET THIN’s pre-authorization requests for Lap-Band surgery, evidence showed.
Relying on the falsified studies, as well as other bogus information, including patients’ heights and weights, insurance companies authorized payment for many of the proposed Lap-Band surgeries. Prosecutors said GET THIN received at least $38 million for the Lap-Band procedures.
Even if the insurance company did not authorize the surgery, GET THIN still was able to submit bills for an average of $15,000 for each sleep study, the jury was told. The insurance payments were deposited into bank accounts associated with the GET THIN entities.
Benefit programs victimized by the billing scam include TriCare—the health care program for uniformed service members, retirees, and their families around the world—and various private insurance companies.
Omidi’s mother, Cindy, was sentenced to probation in 2015 after she was convicted of violating laws designed to prevent money laundering.