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A Beverly Hills workers’ compensation orthopedic surgeon has pleaded guilty to two felony counts of billing fraud for selling marked-up goods to his practice from his own medical supply company over several years.

Gil Tepper M.D. is permanently disqualified from being a provider in the workers’ compensation system and is prohibited from operating any physician-owned medical supply distribution company.

Tepper was ordered to pay more than $1.7 million in restitution to nine insurance companies. The defendant was also sentenced to six months of electronic monitoring and must complete 300 hours of community service.

About $1.1 million in restitution will be paid from Tepper’s frozen funds and he must pay the remaining amount by sentencing on Jan. 28, 2020. If Tepper doesn’t comply with the terms of the plea agreement, he faces a possible maximum sentence of six years in state prison.

According to his arrest warrant, Tepper created and founded Metalink Distributors, which held itself out to be a manufacturer and supplier of medical hardware products. Prosecutors claimed Tepper employed an alleged co-conspirator Dr. Jorge Vital as the Director of Patient Financial Services for MMMC.

During a 2016 raid, officials seized records showing that Tepper used Metalink as a fraudulent shell company to receive healthcare reimbursement payments from insurance companies and government programs through workers’ compensation claims.

MMMC allegedly purchased surgical hardware implants and medical devices from FDA registered surgical hardware suppliers, distributers and manufacturers. Then Vital and Tepper allegedly made it appear that MMMC purchased its surgical hardware from Metalink by creating Metalink invoices with grossly inflated costs, with an average markup 300% over the actual costs.

But MMMC never ordered nor received surgical hardware from Metalink. Vital supposedly instructed MMMC employees to submit the misleading Metalink invoices to numerous insurance companies, including Liberty Mutual, Sedgwick, Farmers, ICW Group Insurance Companies, and Berkshire Hathaway Homestate Companies.

Tepper testified in his deposition in 2012 that he was not aware where Metalink ordered their surgical hardware from and denied ever owning Metalink.

His co-defendant, Jorge Antonio Vital ,is charged with eight counts of workers’ compensation insurance fraud and one count each of conspiracy to commit a crime and attempted perjury under oath, all felonies. The charges include an allegation of taking property valued at more than $3.2 million.

A pre-preliminary hearing for Vital is scheduled for Feb. 19 in Department 50 of the Foltz Criminal Justice Center.

The case was investigated by the District Attorney’s Bureau of Investigation. Case BA456262 was prosecuted by Head Deputy District Attorney Jennifer Lentz Snyder of the Healthcare Fraud Division.