11th Circuit Affirms Convictions, Sentencing of Physician Involved in Health Care Fraud Conspiracy

The Eleventh Circuit on Monday denied an appeal by a man found to have played a role in a conspiracy involving health care fraud and unlawfully dispensing controlled substances, affirming his original convictions and sentence.

The court explained that Arman Abovyan, a primary care physician, was an instrument in a conspiracy orchestrated by nonphysician Kenneth Chatman. Chatman, despite having no medical training, was operating two substance abuse facilities in South Florida and recruited Abovyan, despite him lacking substance abuse treatment expertise, to be medical director of the facilities.

Abovyan’s complicity, according to the court, was shown in his liberal propensity to order urine drug tests for patients, each costing between $1,000 and $6,000. He later admitted to the FBI that he was following Chatman’s orders to test every patient two or three times per week — without regard to the patient’s specific background, and often without following up with patients about results.

“Even if a patient were addicted only to cocaine, Abovyan admitted they would ‘test for everything,’” the court said. “In many instances, this meant that a lab tested specimens for over 100 substances, including drugs that would not meaningfully inform treatment because they were non-addictive or rarely abused.”

Abovyan also admitted that he was paid $5,000 per month, so Chatman would be able to use his medical license to bill insurance, given Chatman had no such ability.

Further, lacking a license to do so, Abovyan prescribed Suboxone — a controlled substance containing Schedule III narcotic buprenorphine — to his patients, often “without actually examining patients, making assessments, or creating individualized treatment plans.”

After Abovyan’s trial and witness testimonies, he was indicted on conspiracy to commit health care fraud and for unlawfully dispensing controlled substances, namely buprenorphine.

The defendant argued on appeal that the evidence brought against him was “insufficient” to show that he was knowingly participating in the health care fraud conspiracy. He did not deny the existence of the overall conspiracy, but contended that the evidence did not show anything more than negligence on his part. Regarding his alleged unlawful prescription of buprenorphine, he argued that the government could not prove that the prescriptions were not for “legitimate” purposes or that they “were outside the scope of professional practice,” the court explained.

The Eleventh Circuit disagreed, affirming that all counts against him and his sentencing of 135 months were valid. The court saw the applicability of the criteria for participating in a conspiracy: “(T)he government must prove beyond a reasonable doubt (1) that a conspiracy existed; (2) that the defendant knew of it; and (3) that the defendant, with knowledge, voluntarily joined it,” according to United States v. Vernon. Abovyan asserted that the government needed direct evidence that showed he had agreed to join the conspiracy; however, the court said it is “well settled” that circumstantial evidence or inferences may be sufficient proof, such as the mere fact that Abovyan cooperated with Chatman to do “what (Chatman) wanted,” which in itself “advanced the healthcare fraud scheme.” The evidence of Abovyan ordering the excessive and expensive drug tests that often were medically unnecessary and the lack of debriefing with patients are among the examples of evidence from which it could be inferred that the defendant was in on the scheme, according to the Circuit.

Concerning Abovyan’s prescriptions of buprenorphine, the court found, via an expert witness on addiction treatment, that not only was Abovyan not fit to dispense the drug because of a lack of proper licensing, but his reasoning for prescribing it was illegitimate. The witness, Dr. Kelly Clark, explained that unless augmented by a full treatment plan, the drug by itself is not considered medical treatment for addiction. Abovyan would fill prescriptions often without physically examining patients prior, making it not possible for him to know whether it was right for each patient, the court explained. Further, per his own admittance, he delegated prescription of the drug to his nurse practitioners, to whom he would give blank prescription pads for the purpose of writing prescriptions for the controlled substance. The court concluded that this constituted affirmation of his conviction for unlawful controlled substance dispensing.

Abovyan is represented by Markus/Moss.