Sohail Mamdani, Multimillion Dollar Disability Insurance Fraud, California 2022

A federal grand jury charged Merced County Doctor Sohail Mamdani, 46, of Los Banos, with mail fraud and money laundering in connection to a disability insurance fraud scheme, and unlawful use of a DEA registration number and fraudulently obtaining possession of a controlled substance, U.S. Attorney Phillip A. Talbert announced.

The California Employment Development Department (EDD) runs a Disability Insurance program that offers worker-funded benefits to people who meet certain requirements and have had those requirements verified by their physician or medical practitioner. Mamdani was a medical doctor operating a clinic called Walk-In Medical Clinic in Los Banos.

According to court documents, between February 2020 and March 2022, Mamdani submitted over 6,000 initial claims to EDD for disability insurance payments despite having never seen or treated the majority of the claimants. As part of the fraud, Mamdani would charge the purported patient a fee for both the initial disability claim and any supplemental claims. In addition, in order to avoid federal reporting requirements, Mamdani structured financial transactions.

The investigation reveals potential intended losses to EDD of up to $99 million dollars with potential actual losses of over $53 million.

Mamdani is separately charged with unlawfully using another doctor’s DEA registration number for the purpose of unlawfully obtaining controlled substances. Additionally, Mamdani wrote a number of fraudulent prescriptions in the names of other individuals in order to obtain controlled substances himself.

This case is the product of an investigation by the Drug Enforcement Administration, the Federal Bureau of Investigation, and the California Employment Development Department.

Assistant U.S. Attorneys Alexandre Dempsey and Michael Tierney are prosecuting the case.

Defendant: Sohail Mamdani, 46, of Los Banos, California

Criminal Charges: Mail fraud, money laundering, unlawful use of a DEA registration number, and fraudulently obtaining possession of a controlled substance

City and State: Los Banos, California

Exact Date: October 20, 2022

Sentence or Outcome: Not convicted, awaiting trial

Exact Dollar Amounts: $99 million (potential intended losses), $53 million (potential actual losses)

Source: https://www.justice.gov/usao-edca/pr/merced-county-doctor-indicted-multimillion-dollar-disability-insurance-fraud-scheme