Louis J. Cohen, P.C., Announces $15 Million Settlement of Medicare and Medi-Cal Fraud Kickback and Stark Law Violations against Former Physician Mohammad Rasekhi, Sheila Busheri, and Southern California Medical Center

Published 2 days ago via Business Wire

Louis J. Cohen, P.C., announces a $15 million settlement of a False Claims Act whistleblower lawsuit against former physician Mohammad Rasekhi, his wife, Sheila Busheri, Southern California Medical Center, Inc. (SCMC), and R & B Medical Group, Inc. dba Universal Diagnostics Laboratories (UDL).

The whistleblowers alleged that Rasekhi and Busheri employed a dozen different schemes to defraud Medicare, Medi-Cal and Tricare, including paying per-patient kickbacks to marketers to refer patients to SCMC and paying kickbacks to physicians to refer lab tests to UDL, in violation of the Anti-Kickback Statute. Further they alleged that Rasekhi referred SCMC’s patients for lab tests to the lab he owned, in violation of the Physician Self-Referral Law (known as the Stark Law).

Rasekhi and Busheri owned the now-shuttered laboratory UDL. They formed SCMC, a taxpayer-funded Federally Qualified Health Center (FQHC) in 2008 purportedly to provide care to underserved patients. Rasekhi was the CEO of UDL and the Chief Medical Officer of SCMC. Busheri was the co-CEO of UDL and remains CEO of SCMC.

The whistleblowers warned that for more than a decade, Rasekhi and Busheri used the FQHC as their private piggy bank, drawing excessive salaries and charging several SCMC clinics excessive rent at buildings the couple owned.

The United States and California intervened in these three claims, reaching a settlement agreement for payment of $10 million.

The United States and California left it to the whistleblowers and Cohen to prosecute the remaining fraud schemes, reaching a separate settlement agreement for payment of $5 million.

In its press release today, the Department of Justice stated: “Kickback and self-referral schemes risk impairing the judgment of healthcare providers and diminish the reliability of the care that they render,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “This resolution upholds the department’s commitment to ensuring that Medicare and Medicaid beneficiaries receive care that is untainted by the providers’ financial interest.”

“Providers who exploit the Medicare, Medicaid and TRICARE programs for their personal financial gain will be held accountable under the False Claims Act,” said U.S. Attorney Martin Estrada for the Central District of California. “This significant resolution evidences our steadfast commitment to ensuring the integrity of federally funded health care programs.”

In just three years, SCMC (one of the largest FQHCs with six clinics in Los Angeles County), Rasekhi and UDL billed Medi-Cal over $100 million and received payments of over $55 million.

The whistleblowers’ allegations of fraud were deemed so credible that the Department of Health Care Services took the extraordinary step of suspending Medi-Cal payments to SCMC, UDL and Rasekhi this spring.

Most troubling, the lawsuit alleged that Rasekhi misused free children’s vaccines meant only for needy children to inoculate adult Medicare patients, charging patients and government programs for these vaccines.

On October 3, 2024 the Medical Board of California alleged that Rasekhi committed sexual abuse and/or sexual misconduct of one of the whistleblowers and two other SCMC patients. Rasekhi stipulated to the surrender of his medical license.

Louis J. Cohen stated: “For decades, Rasekhi and Busheri preyed upon vulnerable patients to enrich themselves at taxpayers’ expense. Without these courageous whistleblowers more patients would have been victimized and this theft of taxpayer funds would have continued. I’m proud of my clients for standing up for patients and taxpayers.”

The settlements resolve the case captioned United States, State of California ex rel. Ferzad Abdi, Julia Butler, Jameese Smith and Karla Solis v. Mohammad Rasekhi, M.D., Sheila Busheri, R & B Medical Group, Inc. DBA Universal Diagnostic laboratories, Southern California Medical Center, Inc., Civil Action No.18-03966 (C.D. Ca.)

The whistleblowers and their counsel wish to acknowledge and thank Jack D. Ross, Deputy Chief, Civil Frauds, Samson Asiyanbi, Trial Attorney, U.S. Department of Justice, Civil Division, Fraud Section, John Fisher, Deputy Attorney General, and Eric Larson, Acting Special Agent in Charge, U.S. Department of Health and Human Services Office of the Inspector General for their steadfast support of this case.

Louis J. Cohen, P.C., is an Agoura Hills firm with a national practice dedicated to representing whistleblowers reporting Medicare and Medi-Cal fraud under the False Claims Act and the financial frauds whistleblower programs of the IRS, SEC, and CFTC. The firm also represents employees in defamation, discrimination, sexual harassment, and whistleblower retaliation cases.

The firm has brought False Claims Act and employment cases with record-breaking results, including settlements and judgments exceeding $100 million. The firm is recognized nationally for having consistently obtained among the highest whistleblower awards for its clients in False Claims Act cases.

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