A federal jury found an internal medicine doctor and hospital owner guilty today for their roles in a multimillion health care fraud scheme, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Ryan K. Patrick of the Southern District of Texas.

Following a two-week trial, Harcharan Narang, 50, of Houston, Texas, and Dayakar Moparty, 47, of Houston, Texas,were found guilty of one count of conspiracy to commit health care fraud, 17 counts of health care fraud and three counts of money laundering. Sentencing is set for June 20, before U.S. District Judge Sim Lake of the Southern District of Texas, who presided over the trial.

Narang is a physician who owned and practiced at North Cypress Clinical Associates in Cypress, Texas. Moparty managed and operated Red Oak Hospital (Red Oak) in Houston, Texas. During the trial, evidence was admitted showing that Narang and Moparty unlawfully enriched themselves by submitting false and fraudulent claims for medical tests that were not medically necessary and/or not provided and then billed at Red Oak Hospital at a higher reimbursement rate.

Additionally, Narang and his co-conspirators falsified diagnostic referral forms to make the beneficiaries appear sicker on paper than they actually were, to receive higher reimbursement rates from health care benefit programs such as Blue Cross Blue Shield, Cigna and Aetna, the evidence showed. Moparty also instructed his employees to falsely bill the medical services at Red Oak and other entities associated with Moparty, when in fact the patients never received services at Red Oak and the other entities.

At trial, patients testified that they had merely bought a Groupon for weight loss shots, but after meeting with Narang, they all received the same battery of medical tests that were not needed or provided. According to the trial evidence, health care benefit programs paid Red Oak approximately at least $3.2 million, and Moparty then covertly paid Narang approximately $3 million dollars to various corporate entities owned by Narang.

Narang and Moparty’s co-conspirator, Gurnaib Sidhu, M.D., 67, of Houston, previously pleaded to conspiracy to commit health care fraud and is awaiting sentencing.

The investigation was conducted by the FBI and the U.S. Office of Personnel Management Office of Inspector General. Trial Attorney Drew Pennebaker of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Tina Ansari of the Southern District of Texas are prosecuting the case.

The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.