Judge imposes 58-month sentence, orders $1.85 million restitution
Four months after a federal jury convicted Brookline sleep physician Dr. Pankaj Merchia of healthcare fraud, money laundering, conspiracy to defraud the IRS, and tax evasion, a federal judge has sentenced him to nearly five years in prison.
On June 5, 2026, U.S. Senior District Court Judge Nathaniel M. Gorton sentenced Dr. Merchia to 58 months in federal prison, followed by three years of supervised release. The Court also ordered him to pay $1,847,931.95 in restitution, imposed a $20,000 fine, and assessed $700 in special assessments.
Judge Gorton ordered Merchia to self-surrender to the Bureau of Prisons by 2:00 p.m. on July 17, 2026.
The sentence follows Merchia’s February conviction on seven counts arising from a scheme prosecutors alleged involved fraudulent billing of health insurers for sleep apnea equipment and services, as well as a long-running tax fraud scheme involving millions of dollars in unreported income.
Agency Checklists previously reported on the jury’s conviction following Merchia’s decision to represent himself at trial.
Prosecutors sought more than six years
The government’s sentencing memorandum urged the Court to impose a 78-month prison sentence, arguing that Merchia’s conduct reflected a decade-long pattern of fraud directed at both healthcare insurers and the Internal Revenue Service.
Although prosecutors calculated actual losses associated with the seven patients who testified at trial at approximately $742,406, they argued that the intended loss exceeded $7.1 million.
The government also sought sentencing enhancements based on what it characterized as sophisticated means, abuse of a position of trust as a physician, and obstruction of justice. Prosecutors argued that Merchia testified falsely at trial, submitted false documents during IRS proceedings, and filed lawsuits against former patients who were potential government witnesses.
In urging a substantial prison sentence, prosecutors described Merchia as a highly educated physician who believed the rules governing physicians, taxpayers, and citizens did not apply to him.
Defense argued guidelines overstated the conduct
Defense counsel urged the Court to impose either a non-incarceratory sentence or a prison term of no more than 22 months.
The defense argued that the advisory sentencing guidelines overstated the seriousness of the offenses and contended that much of the government’s loss calculations resulted from unusual payment circumstances rather than a deliberate effort to obtain millions of dollars from insurers.
Counsel also argued that Merchia had provided actual medical services and equipment to patients involved in the case and characterized the disputed claims as misguided efforts to obtain payment for care rather than a traditional billing fraud involving entirely fictitious services.
The defense further pointed to Merchia’s lack of criminal history, his decades as a practicing physician, and his medical condition, severe sleep apnea, which counsel argued would make any prison sentence more difficult for him than for a typical inmate.
In requesting leniency, counsel also noted that Merchia had previously returned approximately $300,000 in insurance overpayments identified during an audit and did not live what the defense characterized as a lavish lifestyle.
Court lands near bottom of guideline range
As is often the case in white-collar criminal prosecutions, sentencing largely turned on application of the federal sentencing guidelines.
The Probation Office calculated an advisory guideline range of 57 to 71 months. Prosecutors argued for a higher calculation that would have produced a range of 70 to 87 months and supported a 78-month sentence.
Judge Gorton ultimately rejected both the government’s request for a substantially longer sentence and the defense’s request for a major downward departure. By imposing a 58-month prison term, the Court sentenced Merchia near the bottom of the Probation Office’s recommended guideline range.
Pendse trial scheduled for November
Attention now shifts to Merchia’s former business partner and co-defendant, Dr. Shona Pendse, a Brookline nephrologist whose case was severed before Merchia’s trial.
Pendse remains charged with conspiracy to defraud the IRS and tax-related offenses arising from the government’s allegations concerning a purported $30 million sale of the sleep medicine business and related tax filings.
Following an April status conference, Judge Gorton scheduled Pendse’s jury trial to begin on Nov. 9, 2026.
Court filings also show that Pendse’s appointed counsel later moved to withdraw after the Court determined she was no longer eligible for court-appointed representation and would need to retain private counsel.
A closely watched insurance fraud prosecution
The sentencing concludes one phase of a prosecution that attracted attention within the insurance industry because of allegations that Merchia used multiple business entities to submit claims to health insurers for sleep apnea equipment and related services that prosecutors contended were not reimbursable.
While Merchia’s criminal case now moves into the appellate period, the government continues to pursue its case against Pendse, with trial scheduled later this year.
