India Tribune Newsdesk
Santa Ana, CA: Tonmoy Sharma, a prominent Indian-origin psychiatrist and entrepreneur, was arrested at Los Angeles International Airport on May 29 in connection with a massive $149 million healthcare fraud scheme. Sharma, 61, is the founder and former CEO of Sovereign Health Group, a now-defunct addiction treatment network that once operated multiple facilities across the United States. Originally from Guwahati, Assam, Sharma earned his MBBS from Dibrugarh University in 1987 and later built a high-profile career in psychiatry, gaining international recognition for his research on schizophrenia and mental health.
Sharma now faces an eight-count federal indictment, including four counts of wire fraud, one count of conspiracy, and three counts of illegal remunerations for patient referrals to clinical treatment facilities. He was taken into custody by federal authorities and is expected to appear in court in downtown Los Angeles. Alongside him, co-defendant Paul Jin Sen Khor, 45, of Irvine, who served as Sovereign’s accounts payable supervisor, was also arrested. Khor pleaded not guilty and was released on a $20,000 bond pending a July 29 trial.
The indictment alleges that between 2014 and 2020, under Sharma’s direction, Sovereign Health Group fraudulently billed private health insurers more than $149 million for addiction and mental health treatment services, including over $29 million for unauthorized urinalysis tests. Sovereign aggressively recruited patients through misleading marketing, promising coverage through a fictitious foundation, while secretly enrolling patients in private insurance plans without their knowledge or consent. Employees were directed to falsify insurance applications, fabricate qualifying life events, and misstate income levels to gain more lucrative private insurance reimbursements over Medicaid.
Sovereign also submitted thousands of fraudulent claims for comprehensive urinalysis tests, which were often not authorized by physicians or conducted under their supervision. These tests, billed at significantly higher rates than basic drug screens, were administered as frequently as three times per week per patient. In many instances, physicians listed on the claims no longer worked at Sovereign or had not approved the procedures.
In addition to billing fraud, Sharma and Khor allegedly paid more than $21 million in illegal kickbacks to patient brokers in exchange for referrals. These transactions were masked through sham contracts and invoices labeled as “marketing hours” to conceal their true nature.
Sovereign Health Group’s operations were raided by the FBI and other federal agencies as early as 2017, and the company eventually shut down in 2018. Sharma, once lauded for his contributions to mental health and dual diagnosis treatment, now faces the possibility of decades in federal prison. Each wire fraud charge carries a maximum sentence of 20 years, while conspiracy and illegal remuneration charges carry sentences of up to five and 10 years respectively.
The investigation, led by the FBI and multiple federal health oversight agencies, remains ongoing. While the indictment outlines serious allegations, Sharma and his co-defendant are presumed innocent until proven guilty in a court of law.
