Pharmacist Jailed in Elaborate Insurance Scam : Fraud: Donald Levine of Sherman Oaks, among 16 arrested in raids, is accused of netting $3 million in phony charges.


A Sherman Oaks pharmacist was arrested Wednesday morning and charged with carrying out an elaborate workers’ compensation scam that involved underfilling prescriptions and swapping generic drugs for brand names, authorities said.

The scam--the first of its kind in California, according to the state Department of Insurance--netted Donald Lewis Levine, 57, more than $3 million in phony charges over a four-year period, said Deputy Dist. Atty. Betty Munisoglu.

Levine, owner of Sherman Oaks Plaza Pharmacy, his wife, Sharon, 56, and two employees were among 16 people throughout Los Angeles County arrested this week in a sweep designed to “tighten the screws” on insurance fraud, said Dist. Atty. Gil Garcetti.


The raids were coordinated by the Department of Insurance and the district attorney’s office. Suspects were charged with everything from falsifying workers’ compensation claims to staging car accidents for the insurance money.

The most unusual scheme, however, involved Levine, who faces up to 10 years in prison on several fraud and theft charges, authorities said.

In some cases, according to authorities, a customer receiving workers’ compensation benefits would bring Levine a prescription for a brand-name drug and Levine would provide a cheaper generic version, but bill at the brand-name price. In other cases, Levine would provide the customer with the strength of the drug noted on the prescription but bill workers’ compensation for a more powerful, expensive dosage, authorities said. Or Levine would simply underfill a prescription, giving the patient 50 doses instead of the 100 specified on the prescription, authorities said.

For even greater profit, authorities said, Levine would combine the methods.

In one case, according to Munisoglu, Levine received a prescription for 200 Motrin, a brand-name form of the analgesic ibuprofen. He dispensed 60 generic ibuprofen instead, worth $18.08. Then he billed for 200 Motrin--worth $79.53--but bumped up the cost even more, to $86, Munisoglu said.

The workers’ compensation system, which provides benefits for employees injured on the job, was an easy target, Munisoglu said.

“They have no contact with the patient, (and) they never see the prescription,” she said. “It is a pay-as-you go system. There are none of the normal checks and balances.”


Garcetti, who along with state Insurance Commissioner Chuck Quackenbush announced the raids, said that although Levine’s arrest was the first in California for workers’ compensation fraud by a pharmacist, it may not be the last.

“There are currently additional investigations going on of other pharmacists throughout Los Angeles,” Garcetti said.

Among others arrested during the sweep was 50-year-old Betty Jean Corkum of Lancaster, who allegedly received $26,758 from Blue Cross/Blue Shield for prescription medications between 1989 and 1992. The problem, authorities said, was Corkum wasn’t insured with the company, and was filing for the benefits of a person with a similar name.