West New York Financial Advisor Sentenced for $4 Million Health Care Fraud

Kaival Patel, a financial advisor from West New York, was sentenced to 41 months in prison after being convicted of defrauding public health insurance plans of more than $4 million. Patel, 55, also faces three years of supervised release and has been ordered to pay $4.72 million in restitution.

The scheme involved exploiting public health insurance plans for New Jersey state and local government employees. Patel set up a company called ABC Healthy Living LLC, which marketed compounded medications—specialty prescriptions made by pharmacists to address individual patient needs. These medications can be costly and are covered by certain insurance plans.

Patel worked with his family member, a medical doctor in Newark, to authorize prescriptions for compounded medications even when patients didn’t need them. Corrections officers were recruited to visit the doctor’s office and obtain prescriptions solely to facilitate the fraud. Patel also collaborated with a pharmacist to include unnecessary ingredients in the medications to increase their cost, further inflating insurance reimbursements.

Using these fraudulent prescriptions, Patel collected large insurance payouts and disguised the proceeds through financial transactions. Over time, the scheme generated millions of dollars, all while patients received medications they didn’t need.

The case was part of a larger investigation that has led to 48 people being convicted or pleading guilty for their roles in similar schemes. Federal agencies, including the FBI and IRS, played key roles in uncovering the fraud. U.S. Attorney Philip R. Sellinger emphasized the seriousness of the crime, noting that Patel manipulated the system for personal gain at significant cost to public resources.