SAN JOSE – South Bay doctor Venkat Aachi was sentenced today to 24 months in prison for health care fraud and for distributing hydrocodone outside the scope of his professional practice and without a legitimate medical need, announced United States Attorney David L. Anderson, Drug Enforcement Administration (DEA) Special Agent in Charge Chris Nielsen, Federal Bureau of Investigation Special Agent in Charge John F. Bennett, U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) Special Agent in Charge Steven J. Ryan, and the California Department of Justice Bureau of Medi-Cal Fraud and Elder Abuse (BMFEA).  The sentence was handed down by the Honorable Edward J. Davila, U.S. District Judge.

Aachi, 52, of Saratoga, pleaded guilty to the charges on March 25, 2019.  According to the plea agreement, Aachi was a licensed physician who operated a pain clinic in San Jose and maintained a DEA registration number authorizing him to prescribe controlled substances.  Aachi admitted that from September 18, 2017, through July 2, 2018, he wrote hydrocodone-acetaminophen prescriptions that were outside the scope of his professional practice and not for a legitimate medical purpose.  

“Dr. Venkat Aachi went from doctor to drug dealer when he prescribed highly addictive painkillers without a physical examination or legitimate medical need,” stated DEA Special Agent in Charge Chris Nielsen. “Regardless of title or degree, no one is above the law.  DEA will hold medical practitioners accountable if they operate outside the scope of their professional practice, putting patients and lives others at risk.”

“Physicians who unlawfully prescribe opioids are directly contributing to the opioid crisis,” said FBI Special Agent in Charge John F. Bennett. “Venkat Aachi violated his oath and the trust of our community by illicitly pushing controlled substances to persons without need. The FBI, along with our local, state and federal partners, will continue to investigate and pursue medical professionals who violate the public's trust and defraud our healthcare system.”

The plea agreement describes transactions in which Aachi improperly distributed hydrocodone.  For example, in November of 2017, he wrote a prescription enabling a patient to receive 90 hydrocodone-acetaminophen pills.  Aachi did not conduct a physical examination of the patient nor discuss the patient’s pain or response to prior medication.  Aachi acknowledged that he knew the prescriptions were not for a legitimate medical purpose and that he did not write the prescriptions in the usual course of his professional practice.  Aachi also admitted that on July 2, 2018, he falsely submitted to an insurance company a false and fraudulent claim for payment for healthcare benefits, items, and services.  Aachi admitted he acted with the intend to defraud the insurance company.

In filings submitted by the government in connection with Aachi’s sentencing, the government wrote that over the course of just one year, Aachi wrote 5,992 prescriptions for controlled substances, the majority of which were for narcotics.  Further, from September 2017, to July 2018, four undercover law enforcement agents posed as new patients.  They visited Aachi about four times each, and after each visit, they received a prescription for a schedule II controlled substance with little to no physical examination.  

A federal grand jury indicted Aachi on October 9, 2018, charging him with six counts of distributing drugs outside the scope of professional practice, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(C), and one count of health care fraud, in violation of 18 U.S.C. § 1347. Aachi pleaded guilty to one count under each statute. 

In addition to the prison term, Judge Davila ordered Aachi to serve 3 years of supervised release and ordered him to pay $82,616.85 in restitution.  Judge Davila ordered Aachi to begin serving his sentence on January 22, 2020.    

Assistant U.S. Attorney Shailika Kotiya is prosecuting the case with the assistance of Andy Ding.  This prosecution is the result of investigations by the DEA, FBI, HHS-OIG, and the BMFEA. Through the BMFEA, the California Department of Justice regularly works with other law enforcement agencies to investigate and prosecute fraud perpetrated on the Medi-Cal program against a wide variety of healthcare providers, including doctors and pharmaceutical companies.  

 

SAN JOSE – South Bay doctor Venkat Aachi pleaded guilty to distributing hydrocodone outside the scope of his professional practice and without a legitimate medical need, and to health care fraud, announced United States Attorney David L. Anderson, Drug Enforcement Administration (DEA) Special Agent in Charge Chris Nielsen, Federal Bureau of Investigation Special Agent in Charge John F. Bennett, U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) Special Agent in Charge Steven J. Ryan, and the California Department of Justice Bureau of Medi-Cal Fraud and Elder Abuse (BMFEA).  The guilty plea was accepted by the Honorable Edward J. Davila, U.S. District Judge.

According to the plea agreement, Aachi, 52, of Saratoga, was a licensed physician in the state of California who operated a pain clinic in San Jose.  He maintained a DEA registration number authorizing him to prescribe controlled substances.  Aachi admitted that from September 18, 2017, through July 2, 2018, he wrote hydrocodone-acetaminophen prescriptions that were outside the scope of his professional practice and not for a legitimate medical purpose.  The plea agreement describes transactions in which Aachi improperly distributed hydrocodone.  For example, in November of 2017, he wrote a prescription enabling a patient to receive 90 hydrocodone-acetaminophen pills.  Aachi did not conduct a physical examination of the patient nor discuss the patient’s pain or response to prior medication.  Aachi acknowledged that he knew the prescriptions were not for a legitimate medical purpose and that he did not write the prescriptions in the usual course of his professional practice.  

Further, Aachi admitted that on July 2, 2018, he falsely submitted to an insurance company a false and fraudulent claim for payment for healthcare benefits, items, and services.  Aachi admitted he acted with the intend to defraud the insurance company.

On October 9, 2018, a federal grand jury indicted Aachi and charged him with six counts of distributing drugs outside the scope of professional practice, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(C), and one count of health care fraud, in violation of 18 U.S.C. § 1347. Aachi pleaded guilty to one count under each statute. 

Aachi remains free on bail pending sentencing.  Judge Davila scheduled Aachi’s sentencing hearing for July 1, 2019.   

Aachi faces a maximum sentence of 20 years in prison and a fine of $1,000,000 for the illegal distribution of hydrocodone count and 10 years in prison and a $250,000 fine for the health care fraud count.  Additional fines, restitution, and additional periods of supervised release also could be ordered at sentencing.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

Assistant U.S. Attorney Shailika Kotiya is prosecuting the case with the assistance of Andy Ding.  This prosecution is the result of investigations by the DEA, FBI, HHS-OIG, and the BMFEA. Through the BMFEA, the California Department of Justice regularly works with other law enforcement agencies to investigate and prosecute fraud perpetrated on the Medi Cal program against a wide variety of healthcare providers, including doctors and pharmaceutical companies.  This case was investigated and prosecuted by member agencies of the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state, and local law enforcement agencies. 

 

SAN JOSE– A federal grand jury has indicted South Bay doctor Venkat Aachi, charging him with distributing hydrocodone outside the scope of his professional practice and without a legitimate medical need, and with health care fraud related to the submission of false and fraudulent claims regarding the health care benefits, announced United States Attorney Alex G. Tse, Drug Enforcement Administration (DEA) Special Agent in Charge Chris Nielsen, Federal Bureau of Investigation Special Agent in Charge John F. Bennett, and U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) Special Agent in Charge Steven J. Ryan.

According to the indictment filed October 9, 2018, and unsealed Friday, October 12, 2018, on six occasions from November 27, 2017, through March 5, 2018, Aachi, 52, of Saratoga, Calif., was a licensed physician in the state of California when he knowingly distributed hydrocodone to two individuals knowing that the distribution was outside the scope of his professional practice and not for a legitimate medical purpose.  Further, on July 2, 2018, Aachi allegedly submitted to an insurance company a false and fraudulent claim for payment for healthcare benefits, items, and services.  

In sum, Aachi is charged with six counts of distributing drugs outside the scope of professional practice, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(C), and one count of health care fraud, in violation of 18 U.S.C. § 1347.  

An indictment merely alleges that crimes have been committed, and Aachi, like all defendants, is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of 20 years imprisonment and a fine of $1,000,000, for each count of illegal distribution of hydrocodone.  In addition, if convicted, the defendant faces 10 years in prison and $250,000 for the violation of 18 U.S.C. § 371.  Additional fines, restitution, and additional periods of supervised release also could be ordered at sentencing.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

Aachi made an initial appearance on October 12, 2018, before U.S. Magistrate Judge Virginia K DeMarchi.  At that time, he was arraigned on the indictment, entered a plea of not guilty, and was released on bond.  Aachi is scheduled to appear next before Magistrate Judge DeMarchi on October 22, 2018, for a further bond hearing.

Assistant U.S. Attorney Shailika Kotiya is prosecuting the case with the assistance of Rawaty Yim.  This prosecution is the result of investigations by the DEA, FBI, HHS-OIG, and the California Department of Justice Bureau of Medi Cal Fraud and Elder Abuse (BMFEA). Through the BMFEA, the California Department of Justice regularly works with other law enforcement agencies to investigate and prosecute fraud perpetrated on the Medi Cal program against a wide variety of healthcare providers, including doctors and pharmaceutical companies.  This case was investigated and prosecuted by member agencies of the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state, and local law enforcement agencies.