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HomeWealth ManagementFormer 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 rely of conspiracy to commit wire fraud and well being care fraud, 4 counts of well being care fraud, one rely of conspiracy to commit cash laundering and 5 further 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 together with his spouse with a purpose to market compound prescription drugs, that are specialty drugs combined by pharmacists with a purpose to meet sufferers’ particular wants. 

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

In about June 2015, Patel and Paul Camarda, a pharmaceutical gross sales govt, discovered that a number of state medical health insurance plans, together with the the State Well being Advantages Program and the Faculty Staff’ Well being Advantages Program, would reimburse some authorities workers 1000’s of {dollars} for sure prescribed compound drugs, together with nutritional vitamins, scar, ache and libido lotions in addition to acid reflux disease medication.

Patel and Camarda concocted a plan to get compound treatment prescriptions for sufferers with no medical want for them with a purpose to pocket the commissions for the meds, in keeping 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 health care provider to log out on the fraudulent prescriptions. In order that they went to Saurabh Patel, a health care provider working a clinic in Newark (and a relative of Kaival Patel, in keeping with the DOJ). Saurabh Patel agreed to signal the prescriptions (he pleaded responsible to insurance coverage fraud in federal courtroom earlier this yr, in keeping 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 informed 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 keeping with the fees towards Saurabh Patel.

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

Patel first entered the monetary companies business in 2002, becoming a member of AXA Advisors, in keeping 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 via June 2011 earlier than hopping to Wells Fargo in August of that yr, lasting till July 2018 when he moved to Stifel. He was fired in January 2022, due to a “lack of confidence regarding points stemming from his being named in an indictment filed in United States District Courtroom,” in keeping with IAPD. FINRA barred him from the business in Could of that yr.

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.

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