Coos Bay Healthcare Business Owner Pleads Guilty in $2.1 Million Healthcare Fraud Conspiracy

PORTLAND, Ore. — A Coos Bay healthcare business owner has pleaded guilty in federal court to conspiring to defraud government healthcare programs and private insurers through a years-long billing scheme that caused more than $2.1 million in losses.

Mehrdad Gerami, 67, an Iranian national residing in Coos Bay, pleaded guilty Wednesday to one count of conspiracy to commit healthcare fraud, according to the U.S. Attorney’s Office for the District of Oregon.

Federal prosecutors said Gerami owned and operated Coastal Diagnostic Testing Group (CDTG), which provides sleep diagnostic services at locations in Coos Bay, Brookings, Reedsport, Florence and Roseburg.

According to court documents, from 2021 through the present, Gerami and his employees fraudulently billed the U.S. Department of Health and Human Services, the Department of Veterans Affairs, and numerous private insurance companies for costly in-office sleep studies when patients had actually undergone less expensive at-home sleep studies.

Prosecutors also alleged that during periods of low productivity, Gerami directed employees to submit claims for sleep studies that never occurred, using patient information to generate fraudulent billings.

Authorities said Gerami oversaw all aspects of the business and instructed employees to carry out the fraudulent billing practices. The estimated financial loss from the scheme totals $2,124,363.41.

Gerami was charged by criminal information on June 22, 2026.

He faces a maximum sentence of 10 years in federal prison, a $250,000 fine, and up to three years of supervised release. Sentencing is scheduled for Jan. 26, 2027, before a U.S. District Court judge.

As part of his plea agreement, Gerami has agreed to pay full restitution to the victims.

The case was investigated by the U.S. Department of Health and Human Services Office of Inspector General and the Department of Veterans Affairs Office of Inspector General. Assistant U.S. Attorneys Joseph Huynh and Julia Jarrett are prosecuting the case.

Federal officials noted the prosecution aligns with the Department of Justice’s National Fraud Enforcement Division, established earlier this year to investigate and prosecute fraud involving taxpayer-funded benefit programs. The initiative also supports the Trump administration’s Task Force to Eliminate Fraud, which focuses on reducing fraud, waste and abuse in federal benefit programs.