WEST HOLLYWOOD—James T. Lee, 71, of West Hollywood, a doctor who specialized in treating HIV patients was taken into custody on Tuesday, July 2. Lee allegedly defrauded health insurance companies with a brand name human growth hormone Serostim. 

Serostim is an injectable hormone that is used on HIV patients with wasting or cachexia to increase physical strength and body mass. The federal grand jury returned with a 10-count indictment on June 6. 

Lee is being charged with one count of conspiracy to commit health care fraud, six counts of health care fraud,  one count of making false statements relating to health care matters, and two counts of witness tampering. 

Between May 2011 to February 2019, Lee allegedly bought the medication back from the patients, then re-sold it to a new patient. His patients also did not receive the full amount of medication, according to the indictment. A total of $14.2 million in claims were submitted to insurance companies for the medications submitted by Lee and his co-conspirators, and it resulted in approximately $5.9 million, according to the indictment.

The Federal Bureau of Investigation; the Food and Drug Administration, Office of Criminal Investigations; and the Office of Personnel Management, Office of Inspector General are investigating the case.

The scheme allegedly defrauded Health Net, which is a private health benefit plan, and the Government Employees Hospital Association, which is a health benefit plan that provides health insurance coverage to certain former United States government employees. Medicare paid at least $1.4 million based on Serostim prescriptions that were issued by Lee and filled by patients who sold at least some of the drugs to Lee.

Each of the health care fraud counts charged in the indictment carries a statutory maximum sentence of 10 years in prison. The false statement counts carries a statutory maximum sentence of five years in prison. The witness tampering counts each carry a statutory maximum sentence of 20 years in prison. The indictment also contains criminal forfeiture allegations that seek the forfeiture of the ill-gotten gains derived from the criminal offenses.

Written By Maydeen Merino, Tameara Lewis and Casey Jacobs