On January 15, 2021, the U. S. Department of Justice announced that a 54-year-old Mississippi businessman who co-owned numerous compounding pharmacies and pharmaceutical distributors was sentenced to 18 years in prison on his guilty plea to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering. He was also ordered to pay $287,659,569 in restitution and was ordered to forfeit $56,565,963, representing the proceeds he personally derived from the fraud scheme.
The government alleged that between 2012 and 2016, the defendant orchestrated a scheme to defraud TRICARE and other health care benefit programs by distributing compounded medications that were not medically necessary. As part of the scheme, the defendant and his co-conspirators allegedly adjusted prescription formulas to ensure the highest reimbursement without regard to efficacy; solicited recruiters to procure prescriptions for high-margin compounded medications and paid those recruiters commissions based on the percentage of the reimbursements paid by pharmacy benefit managers and health care benefit programs, including commissions on claims reimbursed by TRICARE; solicited (and at times paying kickbacks to) practitioners to authorize prescriptions for high-margin compounded medications; routinely and systematically waived and/or reduced copayments to be paid by beneficiaries and members, including utilizing a purported copayment assistance program to falsely make it appear as if the pharmacies were collecting copayments.
The government also alleged that the defendant further conspired with others to launder the proceeds of his fraud scheme by engaging in monetary transactions in amounts of over $10,000 in proceeds from the fraud scheme, including transactions relating to his participation in a sham intellectual property scheme.
The Special Agent in Charge of the FBI’s Jackson Field Office stated after the defendant’s sentencing, “This scheme to defraud TRICARE out of hundreds of millions of dollars not only diverted taxpayer money from essential services and medical care but victimized the brave men and women who selflessly serve or have served our country. The investigation into this specific scheme, which now spans across multiple states and FBI field offices, began in the FBI’s Jackson Field Office. I am incredibly proud of the relentless efforts made by our Special Agents, Intelligence Analysts and professional support staff, but also the assistance from our partner agencies which make cases like this successful. The FBI and our law enforcement partners are committed to seeking those that intend to steal from others for their own financial gain.”
TRICARE is the health care benefit program serving U.S. military, veterans, and their respective family members.
If you have information regarding false claims having been submitted to Medicare, Medicaid, TRICARE, other federal health care programs, or to other federal agencies/programs, and the information is not publically known and no actions have been taken by the government with regard to recovering the false claims, you should promptly consult with a False Claims Act attorney (also known as qui tam attorneys) in your U.S. state who may investigate the basis of your False Claims Act allegations and who may also assist you in bringing a qui tam lawsuit on behalf of the United States, if appropriate, for which you may be entitled to receive a portion of the recovery received by the U.S. government.
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