State fights prescription drug abuse epidemic

"Prescription drug abuse has reached epidemic levels, with more than 7 million people using prescription drugs for non-medical reasons every month," Timothy J. Landrum, special agent in charge for the Drug Enforcement Administration, said in a statement. These arrests "have taken a complex network of drug dealers out of our communities -- drug dealers who were abusing their authority in the medical community to profit from those vulnerable to these drugs," he said.

According to court documents, the operation was run out of a Westlake medical clinic, where physicians wrote unnecessary painkiller prescriptions for Medicare and Medi-Cal patients, some of whom had had their identities stolen. The public insurance programs were then billed for the medication, which allowed the ring to effectively receive the drugs for next to nothing. Members of the drug ring then augmented their profit by selling the painkiller on the streets, where they sold nearly 1 million pills for between $23 and $27 per pill, for a take of about $25 million. The DEA considers Los Angeles to be one of three "pill mills" in the country.

The Los Angeles ring allegedly was run by Michael Mikaelian, who used a network of "cappers," or recruiters, to bring Medicare and Medi-Cal patients into the Lake Medical Group, a medical clinic he ran with Anjelika Sanamian. There, patients were prescribed painkillers by doctors, including Eleanor Santiago and Morris Halfon, even though the drug wasn't medically necessary, according to a federal indictment. Santiago, for example, wrote 6,151 prescriptions for OxyContin between August 2008 and February 2010; Halfon prescribed the drug 2,301 times during that time period. In some cases, the patients were paid between $300 and $500 to lend their public insurance numbers, though some were victims of identity theft.

Runners or patients would then retrieve the prescriptions at various pharmacies throughout the greater Los Angeles area, five of them owned by an alleged co-conspirator, Theodore Yoon, court documents said. Yoon's businesses filled 2,799 OxyContin prescriptions in two years, or 41 percent of the orders from Lake Medical Group.

The group is accused of then billing Medicare and Medi-Cal for the prescriptions through A & A Billing, a company run by Sanamian and another defendant, Ashot Sanamian.

This is the first case of fraud against Medicare Part D, which subsidizes the cost of prescription drugs, to be prosecuted on the West Coast.

"It's an important case for a number of reasons," says Thom Mrozek, spokesman for the U.S. attorney's office for the Central District of California. "It brings together both a drug trafficking organization and a significant fraud against government insurance programs in which taxpayers are the victims. These cases are certainly new at this point in time."

Mrozek said there are other Medicare Part D fraud investigations under way that could result in charges later this year.

All 10 defendants pleaded not guilty Thursday, and a trial has been set for Dec. 6. Attempts to reach Mikaelian, Halfon and Ashot Sanamian through their businesses or attorneys were unsuccessful. Attorneys for Santiago and Anjelika Sanamian declined to comment.

In an indication of the growing use of prescription drug abuse in California and nationwide, the case is one among nearly a dozen pursued in the past five years by the U.S. attorney's office for the Central District of California that have involved doctors illegally prescribing painkillers like OxyContin.

"Painkiller or opioid abuse has been an emerging epidemic over the past 10 to 15 years," says Dr. Wilson Compton of the National Institute on Drug Abuse. "The number of people dying from overdoses also has skyrocketed in the last 10 years in the U.S."

Compton said the growth in opioid abuse corresponds with the increased availability of the drugs; the Centers for Disease Control and Prevention reports [PDF] a fourfold increase in the prescription of painkillers between 1991 and 2009, from 44 million to 180 million. There were 12,000 deaths in the U.S. related to opioid overdose in 2007, the most recent year that data was available.

"There are certainly concerns about how abusers are getting access," Compton said. "Access for the more serious users include doctor shopping, false prescriptions, theft or pharmacies being robbed. All of these are possibilities. And the fact that physicians would set up a rogue practice – that concept is not a new one, but it is disturbing."

California is not immune to this epidemic, where there has been a near-doubling of OxyContin addicts checking into public treatment centers in the past five years, according to the state Department of Alcohol and Drug Programs.

"OxyContin is sweeping the U.S. as part of a prescription drug abuse epidemic, and California is following that trend for certain," said Suzi Rupp, a department spokeswoman.

In addition to charges of writing illegal prescriptions, Santiago, Anjelika Sanamian and five other clinic workers face additional charges of Medicare and Medi-Cal fraud on accusations of ordering costly tests and treatments that were either not performed or were unnecessary. Over the course of two years, the clinic billed more than $5 million worth of services and collected $1 million in state and federal funds.

The California Medical Board does not comment on criminal cases, but if Santiago and Halfon are convicted, it will place them into disciplinary proceedings. Santiago is already at risk of losing her medical license. She has been on probation since December 2010 for negligence and other charges related to ordering unnecessary tests and even a wheelchair for a patient who did not need one.

Jennifer Simoes, a medical board spokeswoman, said cases such as the recent OxyContin indictment illustrate "how important it is for consumers to check out our website to see if their doctor has a disciplinary action against them, or to file a complaint if they are not getting quality care."

Story courtesy of our media partners at California Watch (A Project of the Center for Investigative Reporting)

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