Massachusetts physician represented himself at trial after co-defendant’s case severed, billed for
A federal jury convicted Massachusetts sleep medicine physician, Dr. Pankaj Merchia, on nine felony counts after deliberating just four hours, finding he defrauded health insurers of more than $760,000 while evading federal income taxes.
Merchia, a Brookline resident who operated multiple sleep medicine clinics across three states, represented himself at trial after his co-defendant’s case was severed two weeks before trial. His convictions included health care fraud, money laundering, conspiracy to defraud the IRS, and tax evasion.
From 2017 to 2019, the defendant fraudulently billed insurance companies millions of dollars for sleep apnea machines that had not been used by his former patients for years,” according to the U.S. Attorney’s office announcement of the verdict.
The case centers on a fraud scheme that continued for six years after federal investigators explicitly warned Merchia in May 2013 that he could not bill insurers for treating family members—a prohibition he circumvented through shell companies and false representations while continuing to bill for his own brother’s alleged care.
The Scheme
Merchia’s fraud began in January 2013 when he started billing a health insurer for CPAP machine services provided to an immediate family member. According to prosecutors, between 2013 and June 2017, he personally submitted approximately $34,000 in claims for a relative’s respiratory equipment.
On May 23, 2013, FBI and OPM-OIG agents executed a search warrant at Merchia’s Virginia residence and interviewed him about billing healthcare insurers for services to immediate family members. After being informed of the prohibition, Merchia acknowledged that he apparently violated that rule.
Rather than halt the billing, Merchia continued for another four years. When Harvard Pilgrim Health Care denied most claims in 2017, he shifted tactics, routing the same family member’s bills through CPAP Clinical Services, LLC, a Maryland company he controlled, billing $6,723.95 over five months.
When Harvard Pilgrim sought to recoup payments citing the family member exclusion, Merchia claimed through an employee that he didn’t own CPAP Clinical—a statement prosecutors proved false.
The Brother’s CPAP Machine
In 2017, despite the 2013 warning, Merchia billed Harvard Pilgrim approximately $1,300 monthly for treating his brother, Vikas Merchia, for sleep apnea. He charged under his own name and through CPAP Clinical, totaling about $34,000. Harvard Pilgrim paid approximately $18,000 before discovering the family relationship in November 2017 and demanding repayment.
Between January and August 2018, Harvard Pilgrim sent collection letters with no response. On July 8, 2018, Samir Brahimi from Harvard Pilgrim emailed Standard Medical Billing (an entity Merchia controlled), noting the insurer “does not reimburse contracted providers for treatment or service rendered to immediate family members.”
On August 29, 2018, one of Merchia’s employees responded falsely, claiming the claims “were submitted in error” and that “Dr. Merchia does not own CPAP ClinicalServices, LLC.”
The Backdated Claims
After Harvard Pilgrim stopped payments in November 2017, Merchia created a new Maryland entity in August 2018: CPAP Concierge, LLC. Beginning in January 2019, he submitted backdated bills spanning December 2017 through February 2019 for his brother’s care through this new entity.
This time, Merchia dramatically inflated his rates. While CPAP Clinical had charged roughly $790 for HCPCS code E0470 (BiPAP machine rental), CPAP Concierge charged roughly $42,037 for the same code. The equipment Merchhia billed retailed for approximately $1,300.
In March 2019, Harvard Pilgrim paid $390,108 for these backdated claims. Merchia deposited the check into a Capital One account for Tribase LLC, another entity he controlled.
By April 2019, Harvard Pilgrim’s Special Investigations Unit discovered the connection and demanded medical records and repayment. Merchia confirmed receipt but ignored repeated requests. On November 22, 2019, he responded with false statements, denying ownership of CPAP Clinical and falsely claiming his brother had been diagnosed at Brigham & Women’s Hospital by unrelated physicians. Hospital records showed no such diagnosis or treatment.
In total, Merchia obtained over $400,000 from Harvard Pilgrim for a single $1,300 CPAP machine for his brother.
Additional Victims
The scheme extended beyond family billing. According to the government’s trial brief, Merchia routinely billed insurers hundreds of thousands of dollars for patients who had not used CPAP or BiPAP machines in years, claiming he had not previously billed them and was entitled to do so retroactively.
One patient received a BiPAP machine from Merchia in 2009, used it for six months, then returned it to his office. Between January 2017 and July 2019, Merchia billed United Healthcare over $500,000 for this patient’s continued use of the returned device. United Healthcare paid over $100,000.
Another patient received a CPAP machine in 2009, used it for 90 days, then moved to Texas and discarded it in 2012. In January 2017, Merchia began billing the patient’s new insurer, CIGNA, for continued use, with dates of service nearly 5 years after the patient discarded the device.
A third patient received a BiPAP machine in 2009 and used it regularly, but received no replacement accessories after the first year. Between January and November 2017, Merchia charged United Healthcare approximately $300,000, including about $80,000 for replacement accessories the patient never received.
When the patient confronted Merchia about the charges, he claimed her prior insurer had never paid for the BiPAP, and he was entitled to charge the new insurer. He also promised not to bill for a replacement device he provided. Despite this promise, between February and July 2019, Merchia billed United Healthcare approximately $200,000 for replacement accessories through CPAP Concierge.
Merchia’s employees fielded numerous calls from angry patients who discovered through Explanation of Benefits statements that he was billing for devices they hadn’t used in years. Employee Joye Thomas told Merchia about these complaints, and he instructed her on what to tell patients to dismiss their concerns.
Money Laundering
Prosecutors traced fraud proceeds through several transactions. On October 23, 2017, Merchia entered into a purchase agreement for 617 Boylston Street in Brookline for $2.1 million. On December 15, 2017, he transferred $2,049,010 from his TD Bank account in the name of Spanish River D3 LLC to complete the purchase.
IRS-CI Special Agent Charles Shevlin traced the funds back to Merchia’s fraud. In August 2017, approximately $1.2 million in payments from healthcare insurers were deposited into a TD Bank account for CPAP Clinical. The funds flowed through multiple accounts Merchia controlled, ultimately funding the Brookline purchase.
In April 2019, after Harvard Pilgrim’s investigation began, Merchia moved money rapidly. On April 18, he transferred $250,000 from the Capital One Tribase account to another account in the name of Sleepheart of Virginia. On May 21, he used $325,000 from the Tribase account (including approximately $140,000 from the Harvard Pilgrim payment) to purchase Federated Treasury Obligated Funds.
The Tax Conspiracy
Merchia was originally charged with co-defendant Dr. Shona Pendse, a Brookline nephrologist. Though not legally married, Merchia and Pendse held themselves out as a married couple, participated in a religious marriage ceremony in 2005, lived together in Great Falls, Virginia, and had three children together.
According to prosecutors, between 2008 and 2020, Merchia and Pendse conspired to defraud the IRS by fabricating a 2008 sale of Sleepheart of Massachusetts, LLC to Sleepheart of Virginia, LLC, falsely appraising the entity at $30 million. Using this fabricated sale, Merchia claimed approximately $2 million in yearly tax deductions for 15 consecutive years on his individual returns.
Between 2009 and 2019, Merchia’s various entities received more than $10 million in gross receipts from healthcare insurers. Yet from 2009 to 2011, he filed returns claiming barely $170,000 in total gross income.
In January 2013, Merchia filed a return reporting a $14.95 million capital gain from the purported sale of Sleepheart, paying approximately $2.25 million. When the IRS requested documentation, he provided an “August 13, 2014” document titled “Memorialization of Sale Agreement,” claiming the parties couldn’t locate the original agreement. The IRS later discovered the document had been created retroactively.
During an IRS audit, Merchia maintained that Pendse was the sole owner of Sleepheart and he only received $1 per year for his services, “much like the founders of Google and AOL,” claiming he lived off savings. In reality, Merchia had joint signatory authority over accounts and used them to pay student loans, credit card bills, and personal expenses.
Merchia provided the IRS with a purported $15 million promissory note signed by Pendse. According to the document’s metadata, Merchia created it in September 2014—not in 2012 as claimed.
The superseding indictment against Pendse charged her with conspiracy to defraud the IRS and two counts of tax evasion for 2019 and 2020. In July 2019, she accepted a position at Kowa Research Institute at $300,000 annually. She provided her employer with an IRS Form W-4 claiming she was “exempt” from withholding. As a result, Kowa withheld minimal federal income taxes from her wages in 2019 and 2020. Pendse did not file timely tax returns for those years.
The Severance
On October 13, 2025—two weeks before trial—Pendse’s attorney filed an assented motion to sever her case from Merchia’s, citing concerns under Bruton v. United States regarding her confrontation rights if tried as a co-defendant with Merchia. The motion noted that Merchia had moved to represent himself and that his statements and actions throughout the trial could prejudice Pendse. The motion also stated it was “likely that the case against Ms. Pendse would be resolved short of trial following the conclusion of the case against the Co-Defendant.”
The government consented to the severance. Pendse’s case remains pending.
Self-Representation
Merchia’s decision to represent himself after his attorney, Jason Benzaken, moved to withdraw on September 23, 2025, did not go well. The U.S. Attorney’s Office requested a Faretta hearing to ensure Merchia understood the risks, warning that statements to government counsel could be used against him and that he was giving up the right to have counsel question him in an organized manner.
The jury’s swift four-hour deliberation suggested they found the government’s evidence overwhelming.
Pattern of Deception
Throughout the scheme, Merchia employed what employees and attorneys described as a “shell game” to conceal his control over multiple entities. Attorney Robert Ratcliffe, who worked for Merchia in 2016, testified that ownership of various entities was “fluid” and would be transferred regularly among Pendse, Merchia, and Merchia’s father. When Ratcliffe needed to speak with an entity’s owner, Merchia would informally “transfer” ownership to himself, make the decision, then transfer ownership back.
Merchia confided to employee Phillip Cohen, a physician assistant, that he would inundate insurance companies with claims, and they would never know it was him because he would break claims up among several entities and tax identification numbers. Merchia also discussed his software skills, including a product called “Knowledge Manager” that could “bulk bill” healthcare insurers.
What’s Next
Merchia likely faces a recommendation of substantial prison time. Health care fraud carries a maximum 10-year sentence, money laundering up to 10 years per count, conspiracy to defraud the IRS up to five years, and tax evasion up to five years per count. The government seeks forfeiture of the Brookline property and all fraud proceeds.
Merchia’s sentencing has not been scheduled. Pendse’s case remains pending following the severance.
