Support for LAist comes from
We Explain L.A.
Stay Connected

Share This


OxyContin Ring Bilked Medicare, Brought 1 Million Pills to Black Market

Stories like these are only possible with your help!
You have the power to keep local news strong for the coming months. Your financial support today keeps our reporters ready to meet the needs of our city. Thank you for investing in your community.

This week federal and state authorities announced that they were cracking down on a ring that bilked medicare out of 1 million pills that went for $23 to $27 a pop on the black market.

Authorities charged 14 people, including two doctors, who ran the scheme out of a clinic called Lake Medical Group on West 8th Street. The scheme that went like this: "cappers" would find people who were eligible for Medicare and bring them back to the clinic. The doctors would write up prescriptions the patients didn't need — and sometimes they would pretend to run tests as well, to make the scheme look legit. These "patients" were paid for their time. (Other patients simply had their beneficiary information stolen.) The "runners" would take these Medicare patients to the pharmacy to pick up their prescriptions and bring them back to the clinic. Then they would sell the pills on the black market at massive mark-ups — some prescriptions were free through Medicare and could be re-sold for up $1,200 a bottle.

The leaders of the scheme Mike Mikaelian and Anjelika Sanamian are defendants in the case, as well as doctors Morris Halfon and Eleanor Santiago and pharmacist owner Theodore Yoon. The indictment alleges a conspiracy to distribute controlled substances, a conspiracy to commit health care fraud, substantive health care fraud charges, and unlicensed wholesale distribution of prescription drugs.

"The two-year investigation into this organization reveals the sophisticated nature of today’s drug traffickers," said U.S. Attorney André Birotte Jr., in a statement. "With a medical clinic and doctors to lend it legitimacy, the organization not only flooded the streets of Los Angeles with an extremely dangerous narcotic, it also bilked a government-run program designed to help the poor and elderly."