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Star witness in 1-800-GET-THIN fraud trial sentenced to probation

Charles Klasky spent 11 days on the witness stand, leading to the conviction of the "puppet master" of the $250-million fraud scheme.

LOS ANGELES (CN) — The government's star witness in the trial that led to the conviction of the mastermind of the 1-800-GET-THIN fraud scheme was sentenced to probation for his role in the conspiracy.

Charles Klasky, 73, got 3 years probation including 8 months home confinement as well as 400 hours community service at his sentencing Wednesday in Los Angeles. The amount of restitution he will have to pay the victims of the lap-band surgery scheme will be determined at a hearing in January.

In 2021, Klasky testified for 11 days at the trial of Julian Omidi, the man who with his mother and brother controlled the 1-800-GET-THIN network of companies that promoted and performed lap-band surgeries and who was found guilty of orchestrating a fraud that cost insurers more than $250 million.

Prosecutors with U.S. Attorney's Office in LA cited the unusual extent of his corporation, which included four proffer sessions with them in 2017 and 2018 and 19 trial preparation sessions last year, in addition to his testimony at the trial, which was mostly under vigorous cross-examination by Omidi's lawyer.

"The number of meetings and hours of testimony here were both extraordinary and a function of the breadth of the scheme, which continued for nearly six years in various permutations, involved multiple co-schemers who often held in shadowy roles not always consistent with their job descriptions, and operated within a secretive and byzantine web of cooperations and nominees," prosecutors said in their recommendation for probation.

Klasky admitted that as the manager of 1-800-GET-THIN's sleep study program, he falsified sleep studies at the behest of Omidi to get obese patients preapproved by their insurers for lap-band surgery.

Insurers typically preapproved patients with a body mass index of 40 or more for the surgery. If they had a BMI of 35 or more, insurers would also need at least one severe co-morbidity such as obstructive sleep apnea before they would preapprove the procedure. The sleep studies were used to fabricate fake apnea reports to get the patients preapproved for the surgeries they didn't really need.

Klasky didn't benefit financially from the fraud scheme other than by keeping his job, which he desperately needed to maintain the health benefits necessary to care for himself and his wife, his lawyer said in his bid for leniency. He admitted his wrongdoing and started cooperating with the government as soon as the FBI searched his home in March 2016.

"In light of the fact that Mr. Klasky was the key witness in the trial of Julian Omidi and has lived an otherwise exemplary life, we believe that Judge Gee’s sentence in this matter was both fair and appropriate," his lawyer, Bill Fleming, said Wednesday. 

Omidi and his co-defendants at last year's trial unsuccessfully sought to blame Klasky for the manipulation of sleep study reports. This year Omidi, again unsuccessfully, tried to get his conviction thrown out, arguing Klasky had lied on the witness stand about a threat to his life made shortly before he began cooperating with the investigation.

Omidi is scheduled to be sentenced in November.

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