Patel was convicted following an 11-day trial before US District Judge Robert B Kugler.
A 54-year-old Indian-American was found guilty on 11 counts of defrauding public health insurance plans out of more than $4 million and transacting in the criminal proceeds, authorities have said.
Kaival Patel of West New York in New Jersey was convicted on December 7 of one count of conspiracy to commit wire fraud and health care fraud, four counts of health care fraud. He was also convicted of one count of conspiracy to commit money laundering by transacting in criminal proceeds, and five counts of money laundering by transacting in criminal proceeds, the US Justice Department said in a statement last week.
Patel created and operated a company called ABC Healthy Living LLC to market compound prescription medications.
Patel and his conspirators approached the Indian-American's family member, a medical doctor who owns and operates a clinic in Newark convinced him to authorise prescriptions for the compound medications for patients who had no medical need for the prescriptions and received commissions for the compound medication prescriptions, the statement said.
Certain state and local government employees who had insurance get reimbursements up to thousands of dollars for a one-month supply of certain compound medications such as vitamins, scar creams, pain creams, libido creams, and acid reflux medications.
Patel conspired with a compounding pharmacist to add unnecessary ingredients to the compound medications to further increase their cost and augment his illicit profits.
He engaged in a series of financial transactions to receive proceeds from the health care fraud and wire fraud conspiracy, the statement added.
Attorney Philip R. Sellinger said Patel was convicted following an 11-day trial before US District Judge Robert B Kugler.
"This defendant lined his own pockets by taking advantage of health insurance plans for New Jersey state and local government employees, defrauding them of millions of dollars by conspiring to obtain reimbursements for medically unnecessary compound prescription medications," the statement said.
"The defendant enriched himself by defrauding the New Jersey public health insurance plans out of more than $4 million," Tammy L Tomlins, Special Agent in Charge of IRS - Criminal Investigation, Newark Field Office, said.
"Today's conviction is the result of the great investigative work of IRS-CI Special Agents and our law enforcement partners and their commitment to protect the integrity of our health care systems," Tomlins said.
On the count of conspiracy to commit wire fraud and health care fraud, Patel faces a maximum penalty of 20 years in prison and a fine of $250,000 or twice the gross pecuniary loss from the offence, whichever is greatest.
On each of the remaining 10 counts, he faces a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross pecuniary gain or loss from the offence, whichever is greatest.
His sentencing is scheduled for April 10 next year.