Merced County Doctor Indicted for Multimillion Dollar Disability Insurance Fraud Scheme, Money Laundering, and Unrelated Drug Charges | USAO-EDCA

FRESNO, California — On October 20, 2022, a federal grand jury indicted Sohail Mamdani, 46, of Los Banos, of mail fraud and money laundering related to a disability insurance fraud scheme and unlawful use of a DEA registration number and fraudulent possession of a controlled substance, US Attorney Phillip A. Talbert announced.

The California Employment Development Department (EDD) operates a disability insurance program that provides employee-funded benefits to individuals who meet certain requirements and have those requirements verified by their physician or health practitioner. Mamdani was a doctor who ran a clinic called the Walk-In Medical Clinic in Los Banos.

According to court documents, Mamdani filed over 6,000 initial claims for disability benefits with EDD between February 2020 and March 2022, although he had never seen or treated the majority of the claimants. As part of the scam, Mamdani would charge the alleged patient a fee for both the original disability claim and any additional claims. In addition, Mamdani structured financial transactions to avoid federal reporting requirements. The investigation identified potential intended losses for EDD of up to $99 million with potential actual losses in excess of $53 million.

Mamdani is separately accused of unlawfully using another doctor’s DEA registration number to obtain unlawfully controlled substances. In addition, Mamdani issued a number of fraudulent prescriptions on behalf of others to obtain self-controlled substances.

This case is the result of an investigation by the Drug Enforcement Administration, the Federal Bureau of Investigation and the California Employment Development Department. Assistant US Attorneys Alexandre Dempsey and Michael Tierney are prosecuting the case.

If convicted of mail fraud, Mamdani faces the maximum statutory sentence of 20 years in prison and a fine of up to $250,000 or up to double the gross profit or gross loss generated by the fraud. He faces a maximum statutory sentence of 20 years in prison and a fine of up to twice the value of the property involved in the transactions or up to $500,000 if convicted of money laundering. He also faces the maximum statutory sentence of four years in prison and a $250,000 fine on each of the drug-related charges. However, any penalty would be determined at the discretion of the court after considering all applicable legal factors and the Federal Sentencing Guidelines, which consider a number of variables. The charges are just allegations; the accused shall be presumed innocent until and unless proven guilty beyond a reasonable doubt.