Former Brookline Physician Sentenced To Federal Prison For Fraud

BROOKLINE, MA — A former physician was sentenced in federal court after being convicted of health care fraud, money laundering, tax evasion, and conspiring to defraud the Internal Revenue Service, according to the United States Attorney's Office District of Massachusetts.

Dr. Pankaj Merchia, 52, of Brookline and Boca Raton, Florida, was sentenced on Friday, June 5, to 58 months in federal prison followed by three years of supervised release. He was also ordered to pay $1.85 million in restitution. Merchia was convicted in January following a 10-day federal trial on one count of health care fraud, three counts of money laundering, two counts of tax evasion, and one count of conspiracy to defraud the IRS.

Merchia was first indicted in December 2022 on health care fraud and money laundering charges. A superseding indictment filed in February 2023 added tax-related charges and named Dr. Shona Pendse as an alleged co-conspirator.

Federal prosecutors said Merchia carried out two separate health care fraud schemes. Between 2017 and 2019, he billed former patients' insurance companies for monthly rentals of Continuous Positive Airway Pressure and Bilevel Positive Airway Pressure machines despite not having treated some of those patients since at least 2011. In some cases, prosecutors said, the patients had already returned the devices. Authorities said Merchia used proceeds from the scheme to purchase a home in Brookline.

Merchia was also convicted of defrauding another insurance company out of more than $390,000 through claims involving a CPAP machine provided to his brother. After learning the insurer would not cover treatment rendered by a family member, prosecutors said Merchia created a new medical business and submitted claims through that entity. Authorities said he later used proceeds from the fraud to fund a $250,000 wire transfer and purchase at least $140,000 in securities.

According to prosecutors, Merchia also failed to report more than $6.5 million in income earned through his medical businesses between 2009 and 2019. To avoid paying taxes, he falsely claimed the businesses were owned by Pendse and fabricated a sale of the practices in 2008. Prosecutors said the pair then claimed large amortization deductions over multiple years based on the alleged transaction.

United States Attorney Leah B. Foley, IRS Criminal Investigation Boston Special Agent in Charge Thomas Demeo and Insurance Fraud Bureau of Massachusetts Executive Director Anthony M. DiPaolo announced the sentence. Assistant U.S. Attorney Neil J. Gallagher Jr. and Department of Justice Trial Attorney Ezra Spiro prosecuted the case.

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