E. Martin Estrada, U.S. Attorney | U.S. Attorney's Office for the Central District of California
The founder and former CEO of Sovereign Health Group, Tonmoy Sharma, was arrested on charges related to a federal grand jury indictment. The indictment accuses him of submitting over $149 million in fraudulent claims to health insurers and paying more than $21 million in illegal kickbacks for patient referrals.
Sharma, 61, from Tustin, was apprehended at Los Angeles International Airport. He is expected to appear in United States District Court in Los Angeles for arraignment. The charges against him include four counts of wire fraud, one count of conspiracy, and three counts of illegal remunerations for referrals.
Paul Jin Sen Khor, 45, from Irvine and a former cash management supervisor at Sovereign Health Group, was also arrested. He faces one count each of conspiracy and illegal remunerations for referrals. Khor pleaded not guilty during his arraignment in Santa Ana's United States District Court. A trial date has been set for July 29.
The indictment reveals that Sovereign Health Group once operated as a significant addiction treatment provider across Southern California and other states between 2014 and 2020. During this period, the company billed private insurance companies at high out-of-network rates under Sharma's direction.
Sovereign employees were instructed by Sharma to pursue patients through marketing strategies that included misrepresentations about payment coverage by a non-existent foundation funded by donations from former patients. This ruse allowed the company to collect personal information used to obtain health insurance coverage fraudulently.
Furthermore, Sovereign submitted over $29 million in unauthorized urinalysis test claims under Sharma's guidance through its laboratory Vedanta Laboratories Inc., often without physician authorization or after physicians had left the organization.
To secure additional patients, Sharma and Khor allegedly paid illegal kickbacks disguised as "marketing hours" through sham contracts with patient brokers.
Both defendants are presumed innocent until proven guilty beyond a reasonable doubt in court. If convicted on all charges, Sharma could face up to 20 years per wire fraud count while both defendants face potential sentences for conspiracy and illegal remuneration counts.
The investigation is being conducted by the FBI along with the United States Department of Health and Human Services Office of Inspector General and the California Department of Health Care Services. Assistant United States Attorney Solomon Kim is prosecuting the case.
