$149 million healthcare fraud case: Former sovereign health CEO accused of orchestrating massive insurance scam targeting vulnerable patients
Indian-origin psychiatrist and businessman Dr. Tonmoy Sharma, founder and former CEO of Sovereign Health Group, has been arrested in Los Angeles for allegedly masterminding a $149 million healthcare fraud scheme. The 61-year-old faces four counts of wire fraud, one count of conspiracy, and three counts of illegal remunerations for patient referrals, reported timesofindia.indiatimes.com.
Sharma’s now-defunct addiction treatment empire allegedly exploited vulnerable patients and manipulated private insurance systems for massive financial gain, according to U.S. federal prosecutors.
Sovereign Health Group was once a prominent addiction and mental health treatment provider operating across Southern California and several other states. According to court documents, between 2014 and 2020, the company aggressively enrolled patients and billed private insurers exorbitantly—often without patients’ full knowledge or consent.
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The scheme included deceitful marketing practices, fake promises of foundation-funded treatment, and manipulation of insurance enrollment processes. Sovereign employees allegedly used patients’ personal details—like birth dates and Social Security numbers—to fraudulently enroll them in private health plans, often without their awareness
At Sharma’s direction, the company misrepresented “qualifying life events” to obtain insurance coverage outside standard enrollment windows. Employees were also instructed to alter patients’ reported income to secure coverage under Affordable Care Act (ACA) plans, which offered better reimbursement rates than Medicaid.
In addition, Sovereign Health is accused of paying over $21 million in illegal kickbacks to patient brokers in exchange for referrals—an act that further deepened the fraudulent enterprise.
Originally from Dibrugarh, Assam, Sharma completed his MBBS from Dibrugarh University before moving to the UK, where his medical license was revoked. He later moved to California, where he rebuilt his career—only to now face federal prosecution.
If convicted, Sharma could face significant prison time and financial penalties under U.S. federal law.
