Compounding Pharmacist Found Guilty In $21.8M Health Care Fraud Case

The United States Department of Justice announced on March 11, 2020 that a federal jury in Texas has found a 75-year-old pharmacist guilty of charges related to health care fraud, wire fraud, and money laundering. After a six-day trial, the jury convicted the pharmacist on one count each of conspiracy to pay and receive kickbacks, conspiracy to commit health care fraud, conspiracy to commit money laundering as well as 11 counts of health care fraud and three counts of wire fraud.

The federal government alleged that the pharmacist and others billed the federal government approximately $21.8 million for medically unnecessary compound gels and creams that were predicated on illegal kickback payments by creating a scheme to generate compounded pain cream prescriptions and bill health care programs for injured state and federal employees. The defendants allegedly created a separate entity called Wellington Advisors to receive the program money from the Department of Labor (DOL) – Office of Workers Compensation Programs and Federal Employees Compensation Act. The pharmacist allegedly attempted to disguise illicit kickback payments as legitimate “marketing” expenses and continued to ship patients compound gels and creams even after patients repeatedly complained they did not want them.

The pharmacist’s 68-year-old wife reportedly pleaded guilty in January 2020 to one count of conspiracy to pay kickbacks and is awaiting sentencing. The pharmacist’s sentencing is scheduled for May 27, 2020. Another defendant, a 48-year-old legal permanent resident of India, is considered a fugitive and a warrant remains outstanding for his arrest in connection with the charges.

In announcing the conviction, the U.S. Department of Justice stated, “The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, the Health and Human Services (HHS) Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.”


What Is A Compounding Pharmacy?

According to the Alliance for Pharmacy Compounding, “Many patients have unique health needs off-the-shelf, manufactured medications cannot meet. For these patients, personalized medications – prescribed by licensed practitioners and prepared by trained, licensed pharmacists – often are the only solution. Working with a physician, a compounding pharmacist can prepare customized medications and meet the individual needs of children, adults, and animals: – When required medications unavailable from pharmaceutical companies; – When the patient is allergic to certain preservatives, dyes, or binders in available off-the-shelf medications; – When treatment requires tailored dosage strengths (for example, an infant); – When a pharmacist can combine several medications to increase compliance; – When a patient cannot ingest the medication in its commercially available form; – When medications require flavor additives to make them more palatable for patients.”

The compounding industry now makes up an estimated one to three percent of the $300 billion dollar U.S. prescription market.


There are approximately 56,000 community-based pharmacies in the United States, with about one half of them directly serving local patients and doctors. About 7,500 compounding pharmacies specialize in advanced compounding services; about 3,000 of these pharmacies make sterile products.


If you or a loved one suffered injuries (or worse) as a result of a bad drug/defective drug in the United States, you should promptly seek the legal advice of a pharmaceutical claim lawyer in your state who may investigate your drug claim for you and represent you in a claim against a pharmaceutical company, if appropriate.

Visit our website or call us toll-free in the United States at 800-295-3959 to find drug claim lawyers in your state who may assist you.

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This entry was posted on Monday, April 13th, 2020 at 5:22 am. Both comments and pings are currently closed.


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