TUSTIN: Tonmoy Sharma, the founder and former CEO of Sovereign Health Group, once a prominent addiction treatment provider, has been arrested on charges of orchestrating a massive $149 million insurance fraud. Sharma, 61, of Tustin, was apprehended on May 29 at Los Angeles International Airport and faces an eight-count federal grand jury indictment, including four counts of wire fraud, one count of conspiracy, and three counts of illegal remunerations for patient referrals.
According to the US Attorney’s Office, Sharma allegedly directed a sophisticated scheme that submitted over $149 million in fraudulent claims to health insurers between 2014 and 2020. A significant portion, more than $29 million, reportedly stemmed from bogus urinalysis claims, involving frequent and unnecessary comprehensive panel testing billed at inflated rates, often without proper authorization.
The indictment further details how Sharma allegedly masterminded aggressive patient acquisition tactics. A "sham organization" disguised as a foundation was purportedly used by Sovereign employees to illicitly obtain patient data, including names and social security numbers. This information was then allegedly used to fraudulently enroll patients into private health insurance plans, fabricating "qualifying life events" and manipulating income figures to secure government-subsidized plans while avoiding lower-reimbursing Medicaid. Some patients were even allegedly impersonated by staff during calls to insurance companies.
Additionally, Sharma and co-defendant Paul Jin Sen Khor, 45, Sovereign’s cash management supervisor, are accused of a substantial kickback scheme. Over $21 million in illegal payments were allegedly funnelled to patient brokers, disguised through "sham contracts" for "marketing hours." Khor has pleaded not guilty, with his trial set for July 29. If convicted, Tonmoy Sharma faces potentially lengthy prison sentences, with each wire fraud count alone carrying a statutory maximum of 20 years.
