Multimillion Dollar SoCal Pharmacy Oxycontin Scheme Put 900,000 Pills on Streets: Feds

Photo courtesy of Drug Enforcement Agency
Take these two and times it by 450,000.

A looming trial in Los Angeles involves: five medical professional defendants, including a Huntington Beach resident; Medicare and Medi-Cal being stung for $2.7 million in Oxycontin reimbursements; billings for $4.6 million in medical procedures that were not needed or never performed; and 900,000 Oxy pills eventually being sold on the streets, according to federal prosecutors. Two other Orange Countians were convicted in the wide-ranging case.

It's the outfall from Operation Dirty Lake, a two-year investigation by the FBI, DEA and state and local agencies. The remaining trial is scheduled to being Sept. 23 in the U.S. District Courthouse in downtown LA, where among those facing the music is Perry Tan Nguyen, the 54-year-old Surf City resident who owns St. Paul's Pharmacy in Huntington Park.

Nguyen's co-defendants are Arcadia pharmacist Theodore Yoon, 68; Pasadena pharmacist Phic Lim, 44; physician's assistant David Garrison; and unlicensed physician's assistant Eliza Budogova.

Matthew Cho, 48, a pharmacist who resides in Irvine, and Fountain Valley's Elizabeth Duc Tran, the 47-year-old owner of Mission Pharmacy in that OC city and Panorama City, are among 14 indictees who have pleaded guilty and have been sentenced or are awaiting their penalties. Of the 20 people originally indicted as part of Operation Dirty Lake, only one, Ashot Sanamian, remains a fugitive.

According to the feds: Recruiters (a.k.a. "cappers") found Medicare and Medi-Cal patients who were brought into a sham clinic, "treated" for non-existent medical problems and prescribed high doses of Oxycontin. "Runners" would then accompany the "patients" (who were compensated for their time) to select shady pharmacies, where the Oxy would given to the prescription holder, who would hand the pills over to the runners, who would get them to a middle man for distribution on the streets.

Hey, remember that Dubya-era controversy of Medicare's Part D program? Turns out, according to the gubment, this scheme exploited the part of the law that extends prescription drug coverage to "everyone with Medicare, regardless of income, health status, or prescription drug usage."

The focal point for federal investigators has been Lake Medical Group in LA, which between 2008-10 fraudulently billed Medicare for about $4.6 million and Medi-Cal for around $1.6 million, according to the indictment. That clinic was started by two since-convicted folks with no medical background or training. The hepcats call such a clinic a "pill mill."

Most of the Oxy were 80-milligram pills, the strongest available, which fetched $27 a pill on the streets, the feds claim. If Medicare and Medi-Cal denied the claims from the bogus prescriptions, the pharmacies would demand cash payments of about $1,200 a bottle, prosecutors add.

The scheme generated so much money that multiple bank deposits of less than $10,000 each were made to avoid deposit reports to the FBI, which is a crime. One clinic co-owner pumped $31,300 in one day into slot machines at San Manuel Bingo & Casino in Highland, according to the indictment, which also alleges proceeds were spent on new cars, jewelry and, in somewhat of a demented circle of drug life, more Oxycontin.

Email: Twitter: @MatthewTCoker. Follow OC Weekly on Twitter @ocweekly or on Facebook!

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paullucas714 topcommenter

None of them will go to jail. The trail of death in their wake will be paid for by defendants charged with minor possession.

DonkeyHotay topcommenter

@fishwithoutbicycle... take some pharmacology classes.

Opiods make WAY MORE EFFECTIVE analgesics than does most any other category of medicine ... hence their worldwide use by millions of people for 100s of years.

fishwithoutbicycle topcommenter

@DonkeyHotay @fishwithoutbicycle 

That may be true...but many have found pain relief with marijuana but it's still illegal in many parts of the country. It's just annoying that some folks (not you) would rather see someone ravaged by opiate addiction than even consider medical marijuana as an option...

DonkeyHotay topcommenter


1) Marijuana is NOT a very good analgesic, it does NOT block the Pain (opiod) Receptors. No one in any serious pain only uses marijuana -- though that's the hype and lies promoted by the Commercial Marijuana Pimps when propagandizing "medical" marijuana.

2) "Addiction", in and of itself, is not a bad thing. It merely describes the body's physical dependence upon a particular drug -- a drug that most often is actually performing as designed and desired -- alleviating PAIN and making life more livable for the user.

3) OPIODS make the best PAIN RELIEVERS, hence mankind's widespread use of them. "Addiction" to them, while using them therapeutically is mostly irrelevant. Opiod addiction can be "cured" once the opiods are no longer needed for pain relief -- MILLIONS of opiod addicts kick their habits every year, with or without clinical assistance.


fishwithoutbicycle topcommenter

@DonkeyHotay @fishwithoutbicycle 

Hmm...perhaps we're dealing with the "placebo effect" when it comes to marijuana as pain relief.

But if it works for some people then they should be free to "medicate" themselves that way...

Thanks for the info.

DonkeyHotay topcommenter

@fishwithoutbicycle ... Opium and Heroin have very real effects on reducing or eliminating pain 

... so if it works for some people then they should be free to "medicate" themselves that way, right?

fishwithoutbicycle topcommenter

@DonkeyHotay @fishwithoutbicycle 

Well, of course. I have a good friend who takes morphine daily just to be at a 6 or 7 on the pain scale. And I really feel for her when the pharmacy gives her grief when she needs a refill a couple of days if she were a criminal for being in so much pain. :-(

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