7 Charged in Valley Medi-Cal Scheme

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Times Staff Writer

Four doctors and three others used a Van Nuys pharmacy to bilk Medi-Cal out of more than $500,000, then laundered the money through a Glendale company that makes imitation Beluga caviar, authorities alleged this week.

In filing charges, the state attorney general’s office said the accused stole the identities of Medi-Cal beneficiaries, wrote phony prescriptions and used the MTC Pharmacy at 7211 Van Nuys Blvd. to bill the program for drugs that were never ordered.

Collin Wong, director of the attorney general’s Bureau of Medi-Cal Fraud, said the case is particularly troubling because “four board-certified doctors who should have been able to make a living in their profession instead gave in to their own avarice and greed. They used their patients as unwitting pawns in an elaborate program to fleece the Medi-Cal system.”


Most of the prescriptions were for Aricept, a costly drug prescribed for Alzheimer’s disease.

But half a dozen of the listed patients told investigators they do not have Alzheimer’s or memory loss and never received the drug, which costs $430 for 100 tablets.

The pharmacy was a shell, the attorney general alleged. It had few walk-in customers, did not keep regular business hours and was understocked. Records showed the pharmacy acquired only $37,550 in medication from July 2000 through April 2001, while collecting more than $505,000 in reimbursements from Medi-Cal.

The money from Medi-Cal, the state’s health program for the needy, allegedly was used to set up Royal Caviar, which makes a soy-based product designed to look and taste like the real thing.

Atty. Gen. Bill Lockyer filed health-care fraud and other charges Thursday in Los Angeles County Superior Court against caviar company owners Robert Khatchatrian and his wife, Asmik Aroutiounian; Norik Yeghisian, who worked at the pharmacy and the caviar company; and Glendale doctors Armen Kazanchian, Vahan Madatovian, Noune Pashinian and Vagharshak Pilos- syan. If convicted, they face prison terms of six to 12 years.

Attorney Clint Feddersen, who represents Khatchatrian and Aroutiounian and is general counsel to the caviar company, said Khatchatrian sold his interest in the pharmacy three years ago. His clients have been out of the country on business for three months and have done nothing wrong, he said.


The others involved, or their attorneys, could not be reached immediately for comment.