LOS ANGELES (CN) — The mastermind behind the 1-800-GET-THIN fraud scheme that billed insurance companies hundreds of millions of dollars for forged sleep studies and unnecessary Lap-Band surgeries was sentenced to 7 years in federal prison.
Julian Omidi, 54, is also facing as much as $98 million in restitution and forfeiture. The exact amount will be determined at a later hearing.
U.S. District Judge Dolly Gee at Monday's hearing allowed Omidi to stay out of prison on bond while he appeals his sentence and conviction.
Government prosecutors had asked for a sentence of 22 years, even though under federal sentencing guidelines, Omidi could be sent to prison for life given the high amount of "intended" financial losses to his victims, including TRICARE, the U.S. military's health care program.
The judge said she believed that the crimes Omidi had committed were serious but that the federal guidelines for fraud convictions were disproportionate.
"You could have earned a fine living without resorting to fraud," she told Omidi, referring to his family background and education. "You should have known better."
Omidi, before the judge imposed the sentence, told her that he was sorry and ashamed to be standing before the court.
"I live in constant remorse," he said. "I worked hard all my life and tried to do the right thing. I didn't want to harm anyone."
Omidi's lawyers had asked for a sentence of as low as 24 months in prison, arguing that the actual losses to the insurers were far less than the intended losses the government claimed and that two years incarceration would be sufficient punishment for a middle-aged man who has never been to prison before.
"A lengthy period of incarceration is not necessary to protect the public from Mr. Omidi or deter him from committing future crimes," his attorneys said in their sentencing request. "He is 54 years old and not a danger to society. He has no criminal history and the offense conduct occurred a decade ago."
The judge rejected the argument that she shouldn't look at the intended loss from the health care fraud in determining Omidi's sentence, but she reduced the overall amount to accommodate his lawyers' argument that many of the Lap-Band surgeries might have been medical necessity not withstanding the falsified sleep studies.
The 1-800-GET-THIN billboards were an ubiquitous sight along Southern California freeways, promoting Lap-Band surgery to the obese, until government investigations and whistleblower lawsuits began to unravel the illegal practices behind the marketing campaign. The U.S. first seized $110 million in assets from Omidi and his business in 2014 and four years later charged him with fraud.
Omidi, according to the government, spearheaded the 1-800-GET-THIN scheme.
"He did so from a position of power, as a member of the wealthy family that controlled GET THIN, and wielded that power over mostly low-wage workers in chaotic, high-pressure, and almost abusive environment where employees often stayed and followed his directions only because they were dependent upon GET THIN for the ability to stay in the country or upon the paycheck or health insurance provided," prosecutors said in asking for a 22-year prison term.
The government also cited the "epidemic" of health care fraud plaguing Southern California in support of a lengthy sentence that would deter others from engaging in such schemes.
In December 2021, a jury found Omidi guilty of 28 counts of mail fraud, as well as additional counts of wire fraud, identity theft, conspiracy to commit money laundering and making false statements related to health matters.
Prosecutors with the U.S. Attorney’s Office in LA argued at trial that Omidi, a physician whose license was revoked in 2009, was a micromanager who instructed others to falsify sleep studies to make it appear patients suffered from severe sleep apnea, which would justify their need for Lap-Band surgery. Omidi also ordered patients’ weight and height to be altered, according to the prosecution, so that it would appear that their body mass index was above a critical threshold.
Omidi's defense tried to shift the blame to Charles Klasky, the manager of the sleep-study program who had struck a plea deal with the government and was their key witness. In a posttrial bid to throw out the jury verdict and even the underlying indictment, Omidi's attorneys argued that prosecutors relied on Klasky's purportedly false claim that a lawyer affiliated with 1-800-GET-THIN threatened him on the morning he was to meet with U.S. attorneys, and that his life would be over if he made a deal with the government.
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