National Enforcement Action Brings Charges against 601
Individuals Responsible for Over $2 Billion in Fraud Losses and 84 Opioid Cases
Involving 13 Million Illegal Dosages
BIRMINGHAM – The U.S. Attorney’s Office for the Northern
District of Alabama this week charged five employees, including a district and
an operations manager, of an Alabama-based compounding pharmacy with
participating in a conspiracy to generate prescriptions and defraud health care
insurers and prescription drug administrators out of tens of millions of
dollars.
U.S. Attorney Jay E. Town announced the charges against
employees of Northside Pharmacy, based in Haleyville and doing business as
Global Compounding Pharmacy, as part of a nationwide health care fraud
takedown. Global’s compounding and shipping facility was in Haleyville, but the
pharmacy did its prescription processing, billing and customer service at its
“call center” in Clearwater, Florida.
Attorney General Jeff Sessions and Department of Health and
Human Services Secretary Alex M. Azar III today announced the largest ever
health care fraud enforcement action involving 601 charged defendants across 58
federal districts, including 165 doctors, nurses and other licensed medical
professionals, for their alleged participation in health care fraud schemes
involving more than $2 billion in false billings. Of those charged, 162
defendants, including 76 doctors, were charged for their roles in prescribing
and distributing opioids and other dangerous narcotics. Thirty state Medicaid
Fraud Control Units participated in today’s arrests. In addition, HHS announced
today that from July 2017 to the present, it has excluded 2,700 individuals
from participation in Medicare, Medicaid, and all other federal health care
programs, which includes 587 providers excluded for conduct related to opioid
diversion and abuse.
Attorney General Sessions and Secretary Azar were joined in
the announcement by Acting Assistant Attorney General John P. Cronan of the
Justice Department’s Criminal Division, FBi Deputy Director David L. Bowdich,
Drug Enforcement Administration Assistant Administrator John Martin, HHS-Office
of Inspector General Deputy Inspector General Gary Cantrell, IRS Criminal
Investigation Deputy Chief Eric Hylton, Centers for Medicare and Medicaid
Services Deputy Administrator and Director of the Center for Program Integrity
Alec Alexander, and Defense Criminal Investigative Service Director Dermot F.
O’Reilly.
Today’s enforcement actions were led and coordinated by the
Criminal Division, Fraud Section’s Health Care Fraud Unit in conjunction with
its Medicare Fraud Strike Force partners, a partnership between the Criminal
Division, U.S. Attorney’s Offices, the FBI and HHS-OIG. In addition, the operation includes the
participation of the DEA, DCIS, IRS-CI, Department of Labor, other various
federal law enforcement agencies, and State Medicaid Fraud Control Units.
The charges announced today aggressively target schemes
billing Medicare, Medicaid, TRICARE, a health insurance program for members and
veterans of the armed forces and their families, and private insurance
companies for medically unnecessary prescription drugs and compounded
medications that often were never even purchased or distributed to beneficiaries.
The charges also involve individuals contributing to the opioid epidemic, with
a particular focus on medical professionals involved in the unlawful
distribution of opioids and other prescription narcotics, a particular focus
for the Department. According to the CDC, approximately 115 Americans die every
day of an opioid-related overdose.
“Health care fraud is a betrayal of vulnerable patients, and
often it is theft from the taxpayer,” said Attorney General Sessions. “In many
cases, doctors, nurses, and pharmacists take advantage of people suffering from
drug addiction in order to line their pockets. These are despicable crimes.
That’s why this Department of Justice has taken historic new steps to go after
fraudsters, including hiring more prosecutors and leveraging the power of data
analytics. Today the Department of Justice is announcing the largest health
care fraud enforcement action in American history. This is the most fraud, the
most defendants, and the most doctors ever charged in a single operation — and
we have evidence that our ongoing work has stopped or prevented billions of
dollars’ worth of fraud. I want to thank our fabulous partners with the FBI,
DEA, our Health Care Fraud task forces, HHS, the Defense Criminal Investigative
Service, IRS Criminal Investigation, Medicare, and especially the more than
1,000 federal, state, local, and tribal law enforcement officers from across
America who made this possible. By every measure we are more effective at
finding and prosecuting medical fraud than ever.”
U.S. Attorney Town
said, “The defendants in the north Alabama case helped their employer, Global
Compounding Pharmacy, defraud millions from Medicare, Blue Cross Blue Shield of
Alabama and other insurance systems by pushing unnecessary medications and
billing for reimbursement. The greed of these defendants, and this company,
resulted in the distribution of medication when there was no need, with the
primary focus on profit rather than the efficacy of care. The costs are not
just monetary, but have social and health impacts on us all.”
“Every dollar recovered in this year’s operation represents
not just a taxpayer’s hard-earned money – it’s a dollar that can go toward
providing healthcare for Americans in need,” said HHS Secretary Azar. “This year’s
Takedown Day is a significant accomplishment for the American people, and every
public servant involved should be proud of their work.”
According to court documents, defendants from the national
sweep allegedly participated in schemes to submit claims to Medicare, Medicaid
and TRICARE for treatments that were medically unnecessary and often never
provided. In many cases, the charges are that patient recruiters, beneficiaries
and other co-conspirators were paid cash kickbacks in return for supplying beneficiary
information to providers, so that the providers could then submit fraudulent
bills to Medicare. Collectively, the doctors, nurses, licensed medical
professionals, health care company owners and others charged are accused of
submitting a total of more than $2 billion in fraudulent billings. The number
of medical professionals charged is particularly significant, because virtually
every health care fraud scheme requires a corrupt medical professional to be
involved in order for Medicare or Medicaid to pay the fraudulent claims.
Aggressively pursuing corrupt medical professionals not only has a deterrent
effect on other medical professionals, but also ensures that their licenses can
no longer be used to bilk the system.
In the Global Compounding Pharmacy case in north Alabama,
the defendants are charged with taking part in a multi-faceted, multi-million
dollar scheme to defraud multiple insurance plans and their third-party
pharmacy benefit managers by billing for fraudulent, often high-dollar prescriptions
that Global would fill and bill for reimbursement. To maximize proceeds, Global
engaged in additional fraudulent practices including automatically refilling
and billing for prescriptions, regardless of patient need, and routinely
waiving co-pays to incentivize patients to accept unnecessary medications and
refills, according to charges and plea agreements in the case.
The U.S. Attorney’s Office, through separate informations
filed in U.S. District Court, and all with associated plea agreements, charged
Global Operations Manager JEFFREY SOUTH, District Manager ANGIE NELSON, sales
representatives RODDRICK BOYKIN and DAWN WHITTEN, and biller STACEY CARDOZO.
The informations charge each of the defendants with one count of conspiracy to
commit wire fraud, mail fraud and health care fraud. South, Nelson, Boykin and
Whitten also are charged with varying counts of health care fraud, and Whitten
also faces a charge of aggravated identity theft.
The charges against South, 47, of Florence, Alabama, Nelson,
40, of Santa Rosa Beach, Florida, Boykin, 45, of San Antonio, Texas, Whitten,
55, of Columbus, Georgia, and Cardozo, 28, of Largo, Florida, add to eight
Global sales representatives previously charged by the U.S. Attorney’s Office
and who all have pled guilty to the conspiracy and scheme.
“These defendants, motivated by pure greed, helped conduct a
complicated scheme to obtain unnecessary, high-priced medications, purely to
gain the insurance reimbursement,” said Birmingham FBI Field Office Special
Agent in Charge Johnnie Sharp Jr. “Rooting out health care fraud is central to
the well-being of both our citizens and the overall economy. Health care fraud
costs the country tens of billions of dollars a year, and the FBI seeks to
identify and pursue investigations against the most egregious offenders
involved in health care fraud through investigative partnerships with other
federal agencies.”
According to court documents, Global hired sales representatives
who were located in various states and were responsible for generating
prescriptions from physicians and other prescribers. To generate a high volume
of prescriptions, Global hired representatives who were married or related to
doctors and other prescribers, and encouraged sales representatives to
volunteer at doctors’ offices where they would review patient files and push
Global’s products to patients, according to court documents.
The FBI, U.S. Postal Inspection Service, HHS-OIG, DCIS and
IRS-CI, investigated the Global cases, which Assistant U.S. Attorneys Chinelo
Dike-Minor, Don Long and Nicole Grosnoff are prosecuting.
The Medicare Fraud Strike Force operations are part of a
joint initiative between the Department of Justice and HHS to focus their
efforts to prevent and deter fraud and enforce current anti-fraud laws around
the country. The Medicare Fraud Strike Force operates in 10 locations
nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force
has charged over 3,700 defendants who, collectively, have falsely billed the
Medicare program for more than $14 billion.
A complaint, information, or indictment is merely an
allegation, and all defendants are presumed innocent until proven guilty beyond
a reasonable doubt in a court of law.
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