HOUSTON – Attorney General Ken Paxton’s Medicaid Fraud Control Unit secured justice as Mohamad Mokbel, a 59-year-old Houston man, was convicted on 15 counts of healthcare fraud for a massive pharmaceutical-compounding fraud scheme.
Mokbel orchestrated the fraudulent billing of expensive topical creams through his company, 4M Pharmaceuticals, leading to over $160 million in illicit claims. From 2014 to 2021, Mokbel operated 14 pharmacies using straw owners. During this time, he fraudulently billed government health care programs for medically unnecessary topical creams and other medications. His scheme involved purchasing beneficiaries’ personal information and submitting falsified prescriptions to generate massive profits. He now faces up to 20 years in federal prison and could be ordered to pay up to $160 million in restitution.
The investigation was led by Sergeant Kurt Nelson, Sergeant Mike Price, Captain Alex Chancia, and Investigative Auditors Diane Glick and Kalpana Patel of Paxton’s Medicaid Fraud Control Unit, in cooperation with the FBI, IRS Criminal Investigation, Homeland Security Investigations, HHS-OIG, and the FDA. The case was prosecuted by Assistant U.S. Attorney Kathryn Olson, formerly of Paxton’s office, and Assistant U.S. Attorney Adam Goldman.
“Fraudulent schemes like the one perpetrated by Mr. Mokbel undermine our health care system and exploit hardworking taxpayers,” said Attorney General Paxton. “We remain committed to bringing individuals who steal from public programs to justice.”
Since 2021, the MFCU has recovered more than $612 million in settlements, judgments, and restitution for Texas taxpayers. The MFCU receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $20,944,200 for fiscal year 2023. The remaining 25 percent, totaling $6,981,395, is funded by the State of Texas. For every dollar of state funding, the OAG’s MFCU has recovered more than 49 dollars for taxpayers over the last 3 years.