Home Wealth Management Former Morgan Stanley, Stifel, Wells Advisor Convicted in $4M Fraud

Former Morgan Stanley, Stifel, Wells Advisor Convicted in $4M Fraud

Former Morgan Stanley, Stifel, Wells Advisor Convicted in $4M Fraud


A former advisor with stints at Morgan Stanley, Wells Fargo and Stifel faces a long time in jail after being convicted of conspiring to drag off a multimillion medical health insurance fraud.

Kaival Patel, a New Jersey-based former advisor, was convicted of 1 depend of conspiracy to commit wire fraud and well being care fraud, 4 counts of well being care fraud, one depend of conspiracy to commit cash laundering and 5 extra counts of cash laundering. 

Particular Agent Tammy Tomlins, heading the IRS-Felony Investigation Division in its Newark workplace, mentioned Katel “enriched himself by defrauding the New Jersey public medical health insurance plans out of greater than $4 million.”

In response to federal officers, Patel co-created an organization known as ABC Wholesome Residing along with his spouse with the intention to market compound prescription medicines, that are specialty medicines combined by pharmacists with the intention to meet sufferers’ particular wants. 

Whereas compound medicines aren’t FDA-approved, they are often helpful when a affected person has an allergy to a specific ingredient in a single remedy, for instance. However these medicines require a prescription from a doctor, in accordance with the DOJ.

In about June 2015, Patel and Paul Camarda, a pharmaceutical gross sales govt, realized that a number of state medical health insurance plans, together with the the State Well being Advantages Program and the College Staff’ Well being Advantages Program, would reimburse some authorities workers hundreds of {dollars} for sure prescribed compound medicines, together with nutritional vitamins, scar, ache and libido lotions in addition to acid reflux disease medicine.

Patel and Camarda concocted a plan to get compound remedy prescriptions for sufferers with no medical want for them with the intention to pocket the commissions for the meds, in accordance with the Justice Division (Camarda pleaded responsible to well being care conspiracy, conspiring to commit cash laundering and obstruction of justice in 2021).

However they wanted a physician to log off on the fraudulent prescriptions. In order that they went to Saurabh Patel, a physician working a clinic in Newark (and a relative of Kaival Patel, in accordance with the DOJ). Saurabh Patel agreed to signal the prescriptions (he pleaded responsible to insurance coverage fraud in federal courtroom earlier this 12 months, in accordance with the DOJ).

From there, Kaival Patel paid a bunch of corrections officers to go to Saurabh Patel to get the fraudulent prescriptions (with Saurabh Patel pocketing insurance coverage funds for the affected person visits). Kaival Patel additionally instructed Saurabh Patel which insurance coverage firms lined these compound meds and urged him to prescribe them to present sufferers of his clinic with these plans, in accordance with the costs towards Saurabh Patel.

Kaival Patel additionally labored with a pharmacist who combined compound medicines so as to add pointless substances to them to spice up the prices much more. The scheme was wide-ranging, with the DOJ claiming 47 folks have been convicted or pleaded responsible within the “overarching conspiracy.”

Patel first entered the monetary providers trade in 2002, becoming a member of AXA Advisors, in accordance with his IAPD profile. He lasted there till September 2007, and later sued AXA for unfairly firing him for allegedly not assembly “minimal manufacturing necessities” (the events later settled and the case was dismissed). 

Patel then joined Morgan Stanley from September 2010 by means of June 2011 earlier than hopping to Wells Fargo in August of that 12 months, lasting till July 2018 when he moved to Stifel. He was fired in January 2022, due to a “lack of confidence referring to points stemming from his being named in an indictment filed in United States District Court docket,” in accordance with IAPD. FINRA barred him from the trade in Might of that 12 months.

Patel faces a most sentence of 20 years in jail for the conspiracy to commit wire and well being care fraud, and a most of 10 years in jail for the remaining counts. Sentencing is scheduled for April 10, 2024.



Please enter your comment!
Please enter your name here