US Indian sentenced to 12 years for fraud

Houston, Dec. 15: An Indian-American man has been sentenced by a US court to 12 years in jail and ordered to pay $68 million for his involvement in an elaborate Internet scam that obtained a whopping $200 million by illegally selling addictive medicines to cyber customers and drug users.

Rakesh Jyoti Saran, 47, of Arlington in Texas was sentenced on December 11 to 144 months in federal prison, said US attorney, Mr James T. Jacks, of the Northern District of Texas. He was also asked to pay $68 million in restitution.

Saran, the last defendant to be sentenced in this case, pleaded guilty to one count of conspiracy to commit healthcare fraud and other federal offences, two counts of mail fraud and one count of conspiracy to distribute controlled substances.

He has been in federal custody since May 2009. Saran was arrested in 2005 on charges outlined in a 201-count federal indictment which alleged that he and five co-defendants conspired from 1999 to 2005 to commit healthcare fraud, wire fraud and money laundering and to illegally distribute controlled substances in a drug diversion scheme.

According to plea papers filed in court, Saran operated 23 Texas-incorporated pharmacies through two firms he owned — Carrington Healthcare Systems and Infinity Services Group.

Saran’s pharmacies purchased expensive pharmaceuticals — including addictive painkillers and psychiatric medications — by fraudulently representing to the wholesalers that the drugs were for distribution to prisons, hospital and other facilities.

The pharmacies then distributed the drugs without valid doctors’ prescriptions to Internet customers, drug users and others who paid up to four times the cost, authorities said.