On October 12, 2018, the District Court for the Eastern
District of Tennessee unsealed a 32-count indictment charging four individuals
and seven companies in a $1 billion health care fraud scheme. The court also
unsealed an additional two plea agreements and an information charging another
individual and his company for their role in the scheme.
Andrew Assad, 33, of Palm Harbor, Florida, Peter Bolos, 41,
of Lutz, Florida, and Michael Palso, 44, of Odessa, Florida, were indicted
along with their compounding pharmacies, Synergy Pharmacy Services, located in
Palm Harbor, and Precision Pharmacy Management, located in Clearwater.
Co-conspirator Larry Everett Smith, 48, of Pinellas Park, Florida, also a
pharmacy compounder, and his companies Tanith Enterprises, ULD Wholesale Group,
Alpha-Omega Pharmacy, all located in Clearwater, Germaine Pharmacy located in
Tampa, Florida, and Zoetic Pharmacy located in Houston, Texas, were all also
named as defendants. All the defendants were charged with conspiracy to commit
health care fraud, mail fraud, and introducing misbranded drugs into interstate
commerce.
On September 26, 2018, HealthRight LLC, a telemedicine
company with locations in Pennsylvania and Florida, and Scott Roix, 52, of
Seminole, Florida, and the CEO of HealthRight, pleaded guilty to felony
conspiracy for their roles in the telemedicine health care fraud scheme in a
criminal information. Roix and HealthRight LLC, also pleaded guilty to
conspiring to commit wire fraud in a separate scheme for fraudulently
telemarketing dietary supplements, skin creams, and testosterone.
The indictment alleges that from June 1, 2015 through April
1, 2018, these individuals and companies, together with other persons and
companies known to the grand jury, conspired to deceive tens of thousands of
patients and more than 100 doctors located in the Eastern District of Tennessee
and across the country for the purpose of defrauding private health care
benefit programs such as Blue Cross Blue Shield of Tennessee out of
approximately $174,000,000. The indictment further alleges that the defendants
submitted not less than $931,000,000 in fraudulent claims for payment.
According to the indictment, the defendants set up an
elaborate telemedicine scheme in which HealthRight fraudulently solicited
insurance coverage information and prescriptions from consumers across the
country for prescription pain creams and other similar products. The indictment
states that doctors approved the prescriptions without knowing that the
defendants were massively marking up the prices of the invalidly prescribed
drugs, which the defendants then billed to private insurance carriers.
Assad, Bolos, Palso, and Smith appeared in court on October
11, 2018 before U.S. Magistrate Judge Anthony E. Porcelli in the U.S. District
Court for the Middle District of Florida. All four individual defendants were
released on bond and are scheduled for an initial appearance and arraignment in
the U.S. District Court in the Eastern District of Tennessee before U.S.
Magistrate Judge Clifton Corker on October 25, 2018.
If convicted, Assad, Bolos, Palso, and Smith face a term of
up to 20 years in prison as to each mail fraud charge, up to 10 years in prison
for the conspiracy, and up to three years in prison for introducing misbranded
drugs into interstate commerce. Additionally, they face fines of up to $250,000
and up to three years of supervised release as to each count. The companies
face fines of up to twice the gross loss sustained as a result of the
conspiracy. The indictment also seeks forfeiture of approximately $154,000,000.
In addition to their roles in the health care fraud
conspiracy, the Information filed against Roix and HealthRight charged each of
them with conspiring to commit wire fraud as part of a scheme to use
HealthRight’s telemarketing facilities to fraudulently sell millions of
dollars’ worth of products such as weight loss pills, skin creams, and
testosterone supplements through concocted claims of efficacy and intentionally
deficient customer service designed to stall consumer complaints.
Roix and HealthRight pleaded guilty before U.S. District
Judge J. Ronnie Greer of the Eastern District of Tennessee. Roix faces a
statutory maximum sentence of 5 years of imprisonment for each conspiracy. The
Court set sentencing for February 13, 2019.
The investigation was coordinated by Assistant U.S.
Attorneys T.J. Harker, David Gunn, and Anne-Marie Svolto of the U.S. Attorney’s
Office for the Eastern District of Tennessee, and Trial Attorney John Claud for
the Department’s Consumer Protection Branch. Assistant U.S. Attorneys T.J.
Harker and David Gunn will prosecute the telemedicine conspiracy for the U.S.
Attorney's Office for the Eastern District of Tennessee. Trial Attorney John
Claud will represent the Department's Consumer Protection Branch in court
proceedings.
The investigation was conducted by the Nashville, Tennessee
office of the U.S. Department of Health & Human Services Office of
Inspector General; the Nashville office of the Food and Drug Administration
Office of Criminal Investigations; the Buffalo, New York, office of the U.S.
Postal Inspection Service; the Knoxville and Johnson City, Tennessee, offices
of the Federal Bureau of Investigation; the Atlanta, Georgia, Office of
Personnel Management Office of the Inspector General; and the Tampa, Florida,
office of Homeland Security Investigations. The U.S. Marshals Service also
assisted in the investigation and the forfeiture of assets.
Members of the public are reminded that an indictment
constitutes only charges and that every person or company is presumed innocent
until guilt has been proven beyond a reasonable doubt.
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