Paul Randall found a weak spot in California's Medi-Cal prescription system and attacked it with breathtaking speed. In just 11 months, he caused more than $269.1 million in fraudulent claims to be submitted. Medi-Cal paid about $178.7 million before the ride ended.
On Wednesday, a federal judge sentenced the 67-year-old Orange County man to 30 years in prison and ordered him to repay $178,746,556. Randall pleaded guilty in April to wire fraud committed while he was already out on release in another federal criminal case.
From the DOJ:
“Paul Randall exploited a temporary change in Medi-Cal’s prescription drug reimbursement system to steal millions of hard-earned taxpayer dollars meant to help California’s most vulnerable 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 under the law.”
“This case exposes unbridled greed at the expense of patients and taxpayers. Stealing funds meant for essential care and corrupting medical decisions through kickbacks is deeply harmful and erodes trust in our health care system,” said Acting Deputy Inspector General for Investigations Miranda L. Bennett of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “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.”
“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 U.S. Attorney Bill Essayli of the Central District of California. “Today’s prison sentence underscore’s our department’s determination to aggressively punish criminals who steal from public health programs.”
The opening appeared during California's transition to Medi-Cal Rx, a new prescription-drug payment system. The state temporarily relaxed prior-authorization requirements for some medications because officials wanted patients to keep getting necessary prescriptions while the new system came online.
The goal was reasonable, while the vulnerability was real.
Randall and his associates went to work. Monte Vista Pharmacy began billing tens of millions of dollars each month for 19 expensive, non-contracted drugs containing cheap generic ingredients.
From the DOJ:
According to court documents, Paul Randall, 66, of Orange, along with pharmacist and pharmacy owner Kyrollos Mekail, 37, of Moreno Valley, and nurse practitioner Patricia Anderson, 58, of West Hills, exploited Medi-Cal’s suspension of its requirement that health care providers obtain prior authorization before providing certain medications at the beginning of 2022. Medi-Cal temporarily suspended the requirement as part of a transition to a new payment system. Using a business called Monte Vista Pharmacy, which Mekail owned, Randall and his co-schemers billed Medi-Cal tens of millions of dollars per month for purportedly dispensing high-reimbursement drugs containing cheap, generic ingredients that were manufactured in unique dosages, combinations or package quantities and were not included in the applicable maximum price lists that cap Medi-Cal reimbursements.
In furtherance of the scheme, Randall paid illegal kickbacks to patient marketers in exchange for Medi-Cal beneficiary information and thereafter paid illegal kickbacks to Anderson to sign pre-filled prescriptions for 19 high-reimbursement, non-contracted, generic drugs. Anderson never met the patients, reviewed their medical records or otherwise determined that the medications were medically necessary before signing the prescriptions. The medications, which included pain creams and Folite tablets, a vitamin available over the counter, were billed for thousands of dollars each, including approximately $13,424 for one prescription of meloxicam 5 mg, a generic drug that typically costs between $5 and $25 for a 30-day supply in larger dosages.
Randall received a portion of Monte Vista’s reimbursements from Medi-Cal, at times equaling approximately 40% of Monte Vista’s profit from the false and fraudulent claims. Randall admitted in his plea agreement that he caused at least $269,120,829 in false and fraudulent claims to Medi-Cal from May 2022 to April 2023, of which Medi-Cal paid at least approximately $178,746,556. Randall also admitted that he committed the offense while on release in another criminal case.
Randall and others laundered their illicit proceeds by transferring the money to a third party to pay kickbacks to Anderson in an attempt to conceal the crime from law enforcement.
Federal prosecutors say the medications were medically unnecessary, frequently never given to patients, or both. Kickbacks were used to obtain beneficiary information and generate prescriptions.
One example deserves its own paragraph. Medi-Cal was billed approximately $13,424 for one prescription of 5 mg meloxicam, a generic anti-inflammatory drug that typically costs between $5 and $25 for a 30-day supply in larger doses.
$13,000.
For meloxicam.
A prescription doesn't need a forensic accountant when the price tag is waving a flare gun.
Randall also paid kickbacks to patient marketers for Medi-Cal beneficiary information. A nurse practitioner was paid to sign prefilled prescriptions even though prosecutors say she hadn't met the patients, reviewed their medical records, or determined whether they needed the medications.
The proceeds bought more than anonymity. The government has seized roughly $126.5 million in assets connected to the scheme, including $111 million in bank funds and securities, luxury vehicles, real estate, and more than $1 million in sports memorabilia.
Randall's forfeiture included Mickey Mantle and Jackie Robinson baseball cards worth hundreds of thousands of dollars and game-worn, signed Kobe Bryant sneakers.
From the DOJ:
Randall and others then laundered their illicit proceeds by transferring the proceeds of the Medi-Cal fraud scheme to a third party to pay hundreds of thousands of dollars in kickbacks to Anderson, to promote the fraud scheme and to conceal and disguise the transfers from detection by law enforcement.
Randall caused the wiring of at least approximately $269,120,829 in false and fraudulent claims to Medi-Cal for purportedly dispensing the fraud scheme medications that Anderson prescribed, on which Medi-Cal paid at least approximately $178,746,556. Randall started this fraud scheme while awaiting sentencing in another federal criminal case.
In his plea agreement, Randall agreed to forfeit property obtained from the fraud, including bank account balances exceeding $17 million, three vehicles, seven properties, and sports memorabilia, such as Mickey Mantle and Jackie Robinson baseball cards worth hundreds of thousands of dollars and Kobe Bryant game worn and signed sneakers.
Mekail pleaded guilty in August 2024 to two counts of health care fraud and awaits sentencing. Anderson is charged with two counts of health care fraud, and the criminal case against her is still pending. A criminal complaint was filed against Christina Mareik, a.k.a. “Christina Marie Sanchez Hernandez”, charging her with health care fraud and alleging that she played a key role in the Medi-Cal fraud scheme by creating fraudulent prescriptions for Medi-Cal beneficiaries and directing Anderson to sign them. The case against Hernandez is still pending.
The United States Department of Health and Human Services Office of Inspector General (HHS-OIG), the FBI, and the California Department of Justice investigated this matter.
California eventually restored prior-authorization requirements in stages. State documents show officials knew those controls served a purpose and spent months phasing them back into place.
Randall earned his 30 years. He admitted what he did.
California should study what he taught them.
Government programs handling billions of taxpayer dollars can't simply assume everyone standing near the cash register is honest. Safeguards can be inconvenient. They can slow things down; sometimes they even frustrate people trying to obtain legitimate care.
Remove them carelessly, though, and somebody eventually notices the open door.
Paul Randall noticed.
He drove $269 million through it.
Fraud this large doesn't begin with a suitcase full of cash. It begins with a weak rule, a missing safeguard, and someone willing to exploit both. Join PJ Media VIP and help us keep following where your tax dollars go. Get 60% off with promo code FIGHT.
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