Texas Surgeon Sentenced in $145M Fraud Scheme

An orthopedic surgeon from Texas was sentenced to 102 months in federal prison and ordered to pay more than $13 million in restitution for his role in a $145 million scheme to defraud the U.S. Department of Labor through fraudulent claims for prescription compound creams.

According to court documents and evidence presented at trial, Dr. Michael Taba, 61, of KcKinney, accepted bribes from pharmacy owners in exchange for prescribing medically unnecessary compounded medications to injured federal workers covered by the Department of Labor's Office of Workers' Compensation Programs (DOL-OWCP).

The pharmacy owners operated three locations in Fort Worth and Arlington and paid Taba and other doctors millions in illegal payments.

Evidence showed the creams were mixed in pharmacy backrooms by untrained teenagers at a cost of roughly $15 per prescription, then billed to DOL-OWCP and Blue Cross Blue Shield more than $145 million, and were paid over $90 million for prescriptions referred by Taba and other providers.

Many patients testified that creams were ineffective and, in some cases, caused painful skin rashes. On Nov. 16, 2023, a federal jury in the Northern District of Texas convicted Taba on one count of conspiracy to commit health care fraud and three counts of health care fraud.

"The Department is committed to protecting victims and combating fraud against the United States wherever it is found," said Assistant Attorney General A Tysen Duva of the Justice Department's Criminal Division. "Today's sentence is the result of years of tireless efforts by our prosecutors and agency partners who investigated this complex fraud scheme and brought to justice the defendants responsible for stealing tens of millions of dollars from the American people."

Inspectors General from the U.S. Postal Service, Department of Labor, and Department of Veterans Affairs, along with IRS Criminal Investigation, emphasized their continued commitment to combating fraud, waste, and abuse in federal health care programs.

The sentencing highlights federal authorities' ongoing efforts to safeguard public funds and protect patients from fraudulent medical practices, as well as the legal consequences facing providers who exploit federal health care systems for personal gain.