The founder and former CEO of the addiction treatment provider appeared in first court on Friday after being arrested on several federal charges, including insurance fraud.
A federal investigation into the sovereign health group, which operated multiple addiction treatment centers in Southern California, has been underway since the FBI stormed the sovereign treatment facility, San Clemente headquarters and Tonmoi Sharma’s home in San Juan Capistrano in June 2017. The business eventually closed in 2018.
However, even after the closure, an NBCLA investigation found that former CEO Tonmoy Sharma operates a San Juan Capistrano-approved residential processing facility under the name Dana Shores Recovery.
Sharma, who was arrested at LAX on Thursday afternoon, has been accused of filing fraudulent claims of more than $149 million with a private insurance company and accepting $21 million for illegal kickbacks of patient referrals.
Sharma was charged with four wire fraud against referral to a clinical treatment facility, one conspiracy, and three illegal fees.
“From 2014 to 2020, sovereigns often charged private insurers with private insurers for drug addicts and mentally ill patients at a high network,” the Department of Justice said in a statement. “In Sharma’s instructions, sovereign employees actively pursued patients through various forms of marketing and instructed them to contact the company with a free phone number.”
Federal officials also claim that when potential patients ask for inquiries about Sovereign Health services, employees misrepresent the services and costs, informing patients that the patients will be paid by donations through the counterfeiting foundation.
Organizations that federal investigators call “scheming” for sovereign employees will use patient personal information, including social security numbers, to order unnecessary tests and treatments without physician approval, the Justice Department said.
“The sovereign also filed numerous claims with insurance companies, including urine tests, after the doctors were not working in the sovereign,” the federal agency alleged.
Another NBCLA investigation found that Sovereign Health reached a $11 million settlement with Brandon Nelson’s family after Sovereign Health committed Suidide at the Sovereign San Clemente treatment facility.
Nelson’s parents said they only realized the scope of the sovereign’s false promise in 2024 after Brandon’s death.
“It’s going to be a house manager, a psychiatrist who is 24/7 monitoring for psychologists. They’ll be in group therapy,” said Rose Nelson, Brandon’s mother.
Paul Zinn Sen Hall, 45, of Irvine, who managed the sovereign finances, was also arrested this week on suspicion of conspiracy to refer a clinical treatment facility and illegal compensation. After pleading not guilty, Khor posted a $200,000 bail.
If convicted, Sharma will face a statutory maximum sentence of 20 years in federal prison for each wire fraud count.
Sharma and Khor will have up to five years in federal prisons due to conspiracy numbers, and up to 10 years in federal prisons for each illegal pay.
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