An Orange man was sentenced today to 360 months in federal prison for masterminding a massive health care fraud scheme in which nearly $270 million in fraudulent claims were submitted to Medi-Cal over an 11-month span for expensive prescription drugs containing generic ingredients that were not medically necessary and, many times, were not provided to the purported recipients.
Paul Richard Randall, 67, of Orange, was sentenced by United States District Judge Mark C. Scarsi, who also ordered him to pay $178,746,556 in restitution.
Randall pleaded guilty on April 7 to one count of wire fraud committed while on release.
“This defendant took advantage of California’s weak systems allowing him to submit $270 million in fraudulent claims to Medi-Cal in less than a year,” said First Assistant United States Attorney Bill Essayli. “Today’s prison sentence underscore’s our department’s determination to aggressively punish criminals who steal from public health programs.”
“Paul Randall exploited a temporary change in Medi-Cal’s prescription drug reimbursement system to steal hundreds of millions of hard-earned taxpayer dollars meant to help California’s neediest residents,” said Assistant Attorney General Colin M. McDonald of the National Fraud Enforcement Division. “Today’s sentence sends a clear message to those who would abuse our public benefit programs to line their own pockets: The Fraud Division will aggressively prosecute you and seek to hold you accountable to the fullest extent permissible under the law.”
“This case exposes unbridled greed at the expense of patients and taxpayers,” aid Acting Deputy Inspector General for Investigations Miranda L. Bennett at the Department of Health and Human Services Office of Inspector General (HHS-OIG).
“Stealing funds meant for essential care and corrupting medical decisions through kickbacks is deeply harmful and erodes trust in our health care system. HHS-OIG, together with our law enforcement partners, will continue to pursue those who exploit federal health care programs and ensure they are held fully accountable.”
“The amount of money Paul Randall stole from California taxpayers through his fraud scheme is staggering,” said Patrick Grandy, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “By exploiting a loophole in the Medi-Cal system, he was able to bill nearly $270 million dollars, then launder it to evade detection and pay kickbacks to his co-schemers. Today’s sentencing sends a strong message to anyone considering defrauding health care benefit programs that the federal government is actively seeking fraudulent claims and will pursue prosecution.”
Randall, along with Kyrollos Mekail, 38, of Moreno Valley, and Patricia Anderson, 59, of West Hills, took advantage of Medi-Cal’s suspension of its requirement that health care providers obtain prior authorization before providing certain health care services or medications as a condition of reimbursement. The suspension of the prior authorization requirements was part of an ongoing transition of Medi-Cal’s prescription drug program to a new payment system.
Medi-Cal is California’s Medicaid program, a public health insurance program which provides health care services for the state’s neediest residents, including low-income individuals, persons with disabilities, and individuals in foster care.
Through a business called Monte Vista Pharmacy, Randall and his co-schemers exploited Medi-Cal’s prior authorization suspension by billing Medi-Cal tens of millions of dollars per month for dispensing high-reimbursement, non-contracted, generic drugs through Monte Vista Pharmacy. Some prescription medications purportedly were to treat pain and included Folite tablets, a vitamin available over the counter.
Normally, these high-cost reimbursement medications would have required prior authorization under Medi-Cal’s old payment system. Medication involved in this scheme was medically unnecessary, frequently was not dispensed to patients, and procured by kickbacks.
From May 2022 to April 2023, Monte Vista billed Medi-Cal more than $269 million and was paid more than $178 million for 19 expensive, non-contracted drugs containing low-cost, generic ingredients that were not medically necessary, not provided, or both.
SOURCE: DOJ PRESS RELEASE
