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A doctor who operates a medical clinic in West Hollywood where he specializes in treating HIV patients has been taken into custody pursuant to federal charges that allege he engaged in a long-running scheme to defraud health insurance companies in connection with the brand-name human growth hormone Serostim.

James T. Lee, 71, of West Hollywood, was taken into custody on Tuesday afternoon after being escorted from Austria by federal law enforcement agents.

After a federal grand jury returned a 10-count indictment on June 6, Lee was arrested in Vienna at the request of the United States. Lee subsequently waived extradition and agreed to return to the United States.

The indictment against Lee charges him with one count of conspiracy to commit health care fraud, six counts of health care fraud, one count of making false statements relating to health care matters, and two counts of witness tampering.

Lee allegedly engaged in a scheme to divert Serostim – an injectable human growth hormone that is FDA-approved for HIV-positive patients – from legitimate HIV patients to other people who purchased the drug for its purported anti-aging properties. The Food and Drug Administration has approved Serostim for use only by HIV patients with wasting or cachexia who are also receiving antiretroviral therapy.

According to the indictment, from at least May 2011 until February 2019, Lee wrote prescriptions for Serostim to HIV patients, who obtained the drugs and used their Medicare Part D benefits to pay for the drugs. Lee then then illegally purchased the Sersotim back from patients, so that he could re-sell the Serostim. Lee allegedly re-sold the Serostim for a significant profit to other patients who were not HIV-positive, and who used the human growth hormone to build muscle and for other cosmetic purposes.

The indictment alleges a second part of the scheme in which Lee allegedly submitted claims to health insurance companies for Serostim injections, claims that were fraudulent because Lee did not actually provide the Serostim injections to the patients at his office. According to the indictment, many of the patients did not receive the full amount of Serostim that Lee billed to the insurance companies, or they received Serostim that Lee had purchased from other patients.

Lee allegedly twice engaged in witness tampering during meetings with a patient that were recorded without Lee’s knowledge. During those meetings, Lee encouraged the patient to provide false information to federal agents who were investigating the case. Lee coached the patient to lie about the Serostim scheme, including by falsely stating that kickback payments from Lee were merely overpayments from the insurance companies, according to the indictment.

During the course of the conspiracy, Lee and his co-conspirators submitted at least $14.2 million in claims to the insurance companies for Serostim injections, which resulted in payments of approximately $5.9 million, according to the indictment. The scheme allegedly defrauded Health Net, which is a private health benefit plan, and the Government Employees Hospital Association, which is a health benefit plan that provides health insurance coverage to certain former United States government employees.