South Bay doctor indicted for unlawfully distributing hydrocodone and health care fraud
SAN JOSE, Calif. – A federal grand jury has indicted South Bay doctor Venkat Aachi, charging him with distributing hydrocodone outside the scope of his professional practice and without a legitimate medical need. He was also charged with health care fraud related to the submission of false and fraudulent claims regarding the health care benefits, announced U.S. Drug Enforcement Administration Special Agent in Charge Chris Nielsen. Also involved in the announcement were United States Attorney Alex G. Tse; Federal Bureau of Investigation Special Agent in Charge John F. Bennett; U.S. Department of Health and Human Services Office of the Inspector General Special Agent in Charge Steven J. Ryan; and the California Department of Justice Bureau of Medi Cal Fraud and Elder Abuse.
According to the indictment filed Oct. 9, 2018, and unsealed Friday, Oct. 12, 2018, on six occasions from Nov. 27, 2017, through March 5, 2018, Aachi, 52, of Saratoga, Calif., was a licensed physician in the state of California when he distributed hydrocodone to two individuals knowing that the distribution was outside the scope of his professional practice and not for a legitimate medical purpose. Further, on July 2, 2018, Aachi allegedly submitted to an insurance company a false and fraudulent claim for payment for healthcare benefits, items, and services. In sum, Aachi is charged with six counts of distributing drugs outside the scope of professional practice.
Aachi made an initial appearance on Oct. 12, 2018, before U.S. Magistrate Judge Virginia K DeMarchi. At that time, he was arraigned on the indictment, entered a plea of not guilty, and was released on bond. Aachi is scheduled to appear next before Magistrate Judge DeMarchi on Oct. 22, 2018, for a further bond hearing.
An indictment merely alleges that crimes have been committed, and Aachi, like all defendants, is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of 20 years' imprisonment and a fine of $1,000,000, for each count of illegal distribution of hydrocodone. In addition, if convicted, the defendant faces 10 years in prison and a $250,000 fine. Additional fines, restitution, and additional periods of supervised release also could be ordered at sentencing. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Shailika Kotiya is prosecuting the case with the assistance of Rawaty Yim. This prosecution is the result of investigations by the DEA, FBI, HHS-OIG, and BMFEA. Through the BMFEA, the California Department of Justice regularly works with other law enforcement agencies to investigate and prosecute fraud perpetrated on the Medi Cal program against a wide variety of healthcare providers, including doctors and pharmaceutical companies. This case was investigated and prosecuted by member agencies of the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state, and local law enforcement agencies.
