By: Richard L. Smith
A West New York financial advisor was sentenced to 41 months in prison for defrauding public health insurance plans out of over $4 million and laundering the proceeds, the U.S. Department of Justice announced.
Kaival Patel, 55, was convicted in December 2023 on charges including conspiracy to commit wire fraud and health care fraud, multiple counts of health care fraud, and money laundering.
The sentencing was handed down by U.S. District Judge Edward S. Kiel in Camden federal court.
“Patel took advantage of health insurance plans meant for New Jersey state and local government employees, orchestrating a scheme to obtain reimbursements for unnecessary compound prescription medications,” said U.S. Attorney Philip R. Sellinger.
Patel operated ABC Healthy Living LLC to market compound prescription medications—customized drugs requiring physician prescriptions.
Exploiting insurance reimbursement policies, Patel and his conspirators recruited his family member, a Newark-based medical doctor, to authorize prescriptions for patients without medical need.
They also enlisted corrections officers to obtain fraudulent prescriptions and colluded with a pharmacist to inflate medication costs.
The fraudulent scheme targeted high-reimbursement medications, such as scar creams, pain creams, and vitamins, resulting in millions of dollars in illicit gains.
Patel then laundered the proceeds through financial transactions they were tied to the conspiracy. 
To date, 48 individuals have been convicted or pleaded guilty in connection with the broader conspiracy.
In addition to his prison term, Patel was sentenced to three years of supervised release and ordered to pay $4.72 million in restitution.