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Compounding Pharmacy Fraud

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Healthcare Fraud: it’s not just Medicare and Medicaid

Posted  10/17/18
Last year, the U.S. Department of Justice recovered $2.4 billion in settlements and judgments involving fraud in the healthcare industry perpetrated against government payors. But government programs like Medicare and Medicaid aren’t the only targets of massive healthcare fraud schemes. A recent Department of Justice press release announced the unsealing of a 32-count indictment containing charges against four...

September 17, 2018

In the largest healthcare fraud case ever to come out of Mississippi, the co-owner of two Mississippi-based compounding pharmacies, Marco Bisa Hawkins Moran, has pleaded guilty to defrauding TRICARE of more than $22 million. As part of the fraud, Moran and others allegedly paid kickbacks to doctors and marketers to prescribe drugs for beneficiaries covered by TRICARE and other lucrative health benefit programs. Additionally, they allegedly selected formulas meant to maximize profits instead of benefit individuals, and submitted fraudulent reimbursement claims to TRICARE. The case spanned multiple states across the country, including California, Tennessee, Arkansas, and Connecticut, with twelve people charged and nine convicted so far. USAO SDMS

September 13, 2018

One of the owners of an unnamed compounded drug marketing company has pleaded guilty to defrauding a state employee health benefit plan. According to the complaint, over the course of a year, Robert Madonna and others bribed a number of state employees to obtain prescriptions for medically unnecessary but expensive compounded drugs, including vitamins and creams to manage fungus, pain, and scars. The alleged fraud caused more than $2 million in losses to the New Jersey State Health Benefits Plan. Madonna will now pay $2,092,791 in restitution and be sentenced early next year to a possible maximum of 10 years in prison and a $250,000 fine. USAO NJ

September 11, 2018

Through a tip by Connecticut State Comptroller, Kevin Lembo, a Florida-based compounding pharmacy, Assured, Rx, along with multiple individuals—many of them former and current Connecticut state government employees—have been sued by the State of Connecticut for alleged violations of the Connecticut False Claims Act. The pharmacy is accused of paying kickbacks to co-defendants Nicholas and Lisette Maulucci, who then paid other individuals to file reimbursement claims from a state employee health plan for expensive compound drugs manufactured by Assured, Rx. Through their actions, the Mauluccis allegedly received kickbacks totaling upward of $2.6 million, and cost the Connecticut Pharmacy Benefit Plan approximately $10.9 million. CT AG

June 7, 2018

Mississippi physician Albert Diaz was sentenced to 42 months in prison for prescribing medically unnecessary compounded medications to TRICARE patients he had not examined and falsifying medical records to make it appear he had treated the patients. The fraud cost TRICARE and other insurers more than $3 million. DOJ

April 26, 2018

Nicholas A. Borgesano Jr., owner of Florida pharmacy A to Z Pharmacy was sentenced to 180 months in prison and ordered to pay $54 million in restitution for his role in a massive compounding pharmacy fraud scheme. DOJ

March 30, 2018

Larry B. Howard, the owner of an Orlando-based Fertility Pharmacy, was sentenced to serve 160 months in prison and forfeit over $4.3 million for his role in a kickback scheme involving pain and scar creams that resulted in the payment of approximately $4.3 million in false and fraudulent claims to TRICARE. DOJ

United States Targets a Private-Equity Firm and Pharmacy in a Whistleblower Case

Posted  02/26/18
By the C|C Whistleblower Lawyer Team On Friday the Wall Street Journal reported on the U.S. government’s decision to intervene in a False Claims Act qui tam case against pharmacy Diabetic Care Rx LLC and the private equity firm that holds a controlling stake in the pharmacy, Riordan Lewis & Haden Equity Partners (“RLHEP”). Diabetic Care is a compounding pharmacy that mixes different ingredients to create...

Fraudster of the Week -- Pharmacy Fraudster Steven Butcher

Posted  02/16/18
By the C|C Whistleblower Lawyer Team On Wednesday, former pharmaceutical sales representative Steven Butcher admitted to running a $45 million scheme to swindle both federally-funded and private health care benefit programs.  Butcher was charged with one count of conspiracy to commit health care fraud and one count of conspiracy to violate the Anti-Kickback Statute, a law designed to remove financial incentives...

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