TUSTIN, Calif. (Diya TV) — The founder and former CEO of Sovereign Health Group, once a prominent addiction treatment provider across Southern California, was arrested last week on charges of orchestrating a sweeping, multi-million dollar health care fraud and kickback scheme, according to federal prosecutors.
Tonmoy Sharma, 61, of Tustin, was taken into custody on May 29 at Los Angeles International Airport upon returning to the United States. He is named in an eight-count federal grand jury indictment that alleges he oversaw the submission of more than $149 million in fraudulent claims to private health insurers and paid over $21 million in illegal kickbacks to patient brokers.
The indictment, unsealed by the U.S. Attorney’s Office for the Central District of California, charges Sharma with four counts of wire fraud, one count of conspiracy, and three counts of illegal remunerations for patient referrals. If convicted, he faces up to 20 years in federal prison for each wire fraud count, five years for conspiracy, and 10 years for each illegal remuneration count.
Prosecutors allege that between 2014 and 2020, Sharma ran a sophisticated scheme through Sovereign Health and its affiliated laboratory, Vedanta Laboratories Inc., billing insurance companies for unnecessary or unauthorized services—particularly costly urinalysis tests. Sovereign employees allegedly administered both rapid cup tests and comprehensive panel screenings as frequently as three times per week, even when physicians had not approved the tests or were no longer associated with the company.
According to the indictment, Sharma directed his employees to submit these high-priced claims to insurers under the names of doctors who had either not authorized the procedures or were no longer employed at Sovereign. More than $29 million in claims came from these urinalysis tests alone.
The government also accuses Sharma of exploiting a fabricated foundation, which was presented to prospective patients as a charitable organization funded by donations from former clients. In reality, the so-called foundation served as a front for Sovereign staff—acting under Sharma’s direction—to collect personal information from patients such as names, birth dates, and Social Security numbers. Employees allegedly used this data to fraudulently enroll individuals in private insurance plans, often manipulating income and inventing qualifying life events to secure Affordable Care Act subsidies and avoid lower-paying Medicaid reimbursements.
Sovereign staff also reportedly impersonated patients during calls to insurance companies, a tactic used to activate and manage fraudulent policies without patient consent. These plans were then billed for services that may not have been authorized, medically necessary, or properly rendered.
Alongside Sharma, federal authorities arrested Paul Jin Sen Khor, 45, of Irvine, who served as Sovereign’s cash management and accounts payable supervisor. Khor faces one count of conspiracy and one count of illegal remuneration for referrals. He pleaded not guilty during a June 4 arraignment in Santa Ana federal court and was released on $20,000 bond, with a trial scheduled for July 29.
To boost patient intake, Sharma and Khor allegedly paid millions in kickbacks to patient brokers, disguising the payments as compensation for “marketing hours.” These transactions were reportedly routed through sham contracts intended to conceal their true purpose, prosecutors said.
Assistant U.S. Attorney Solomon Kim of the Major Frauds Section is prosecuting the case. The investigation is being led by the FBI, the U.S. Department of Health and Human Services Office of Inspector General, and the California Department of Health Care Services, with support from the IRS, the U.S. Department of Labor, and the Office of Personnel Management.
