Today another defendant pleaded guilty in a long-standing inquiry into a prescription drug-billing plan scheme that spuriously billed health insurers over $200 million in medical claims. The billing scheme involved Haleyville, Northside Pharmacy, an Ala.-based pharmacy trading as Global Compounding Pharmacy. Jay E. Town, U.S. Attorney, the Federal Bureau of Investigation Special Agent in Charge, Johnnie Sharp, Jr., U.S. Department of Health and Human Services, Office of Inspector General, Derrick L. Jackson, Special Agent in Charge, Defense Criminal Investigative Service Special Agent in Charge Cynthia Bruce, Adrian Gonzalez, United States Postal Inspector in Charge of Houston, and Andrew Thornton, Acting Special Agent in Charge of the Internal Revenue Service-Criminal Investigation made the guilty petition announcement.
Jeffrey Black, of Destin, Florida, age 55, took a plea of guilt to one count of conspiracy to undertake health care and mail fraud, 8 counts of health care fraud, one account of the conspiracy to pay kickbacks to a doctor, and seven accounts of squandering the proceeds of health care fraud before Judge L. Scott Coogler of the U.S. District court. According to the guilty plea, Black is the former co-owner, vice president and chief operating officer of Northside Pharmacy trading as Global Compounding Pharmacy.
“Each year, Health care fraud is estimated to be in the hundreds of billions. We see just how unbearable and critical the ramifications frauds related to health care can be,” said Jay E. Town U.S. Attorney. “This plea—and the 21 before it just in this inquiry—should relay a message to would-be criminals that those who decide to embezzle from our health insurance programs will be held liable.”
“Black schemed with others and compromised his ethics to line his pockets with the proceeds of fake claims,” said Johnnie Sharp, Jr. FBI Special Agent in Charge. “I applaud the brilliant work conducted by my agents and our great partners to hold Black and others liable who work to swindle American taxpayers through health care fraud schemes.”
“The Defense Criminal Investigative Service (DCIS) is dedicated to going after unethical individuals like Jeffrey Black who intend on swindling and cheating the healthcare system serving our military and veterans, TRICARE. DCIS applauds the efforts of the U.S. Attorney’s Office in the Northern District of Alabama requiring compensation to TRICARE for prescriptions that were medically nonessential or even utilized by many of the recipients,” stated Cynthia A. Bruce Special Agent in Charge, DCIS, Southeast Field Office.”
“Today’s guilty plea is the result of noteworthy team efforts to protect an array of state-funded healthcare programs,” stated Derrick L. Jackson Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “The OIG is dedicated to breaking down intricate fraud schemes such as this one.”
“In addition to sabotaging public health and safety, health care fraud cheats Americans of more than eighty billion dollars per annum in higher premiums and increased out of pocket expenses”, said Adian Gonzalez, Postal Inspector in Charge of Houston. “The United States Postal Inspection Service is devoted to investigations together with our law enforcement partners whenever fraudsters attempt to involve the U.S. Mail in their fraudulent schemes, as is in this charge against John Jeremy Adams, who was trading as Global Compounding Pharmacy.”
Today’s plea should serve as an exemplar to any medical practitioner contemplating exploiting their patients for profit: you will be arrested, you will be charged, and you will pay a high price for your actions,” stated Andrew Thornton, Jr. Acting Special Agent in Charge IRS Criminal Investigation, Atlanta Field Office. “IRS-CI remains dedicated to working with our law enforcement agencies to prosecute those seeking to profit themselves at the expense of the government and their patients.”
“As elaborated in the plea agreement, Black’s actions and position in the fraud scheme took advantage of veterans for personal financial benefits,” stated Special Agent in Charge, VA Office of Inspector General David Spilker. “VA OIG is dedicated to working with our law enforcement agencies to point out and investigate those who undertake healthcare fraud against VA programs.”
Mr Black’s guilty plea brings the total number of co-conspirators who have pleaded guilty to the charges to 23. Two nurses, a vice president of sales, district manager, an operations manager and several other sales representatives, have also pleaded guilty. The trial against the four remaining co-conspirators is scheduled for June 29th, 2020.
According to the guilty plea, Mr Black took part in a scheme to cause the pharmacy he co-owned to invoice prescription drugs that were not necessary medically. He paid physicians to prescribe and ordered employees to get drugs that were medically unnecessary for them, their friends, and family members, to modify prescriptions to add drugs that were not prescribed, to instinctively refill patient prescriptions regardless of need, to regularly waive and discount co-pays to persuade patients to obtain and keep medically unnecessary drugs, and without the knowledge of the patients’ invoice for drugs. According to the guilty plea, when prescription drug administrators tried to police this behaviour, the defendants avoided and blocked those efforts, including providing fake information in regards to audits and redirecting their billings through affiliate pharmacies.
The scheme earmarked several health insurance programs, including Alabama plan pharmacy-Blue Cross Blue Shield, as well as programs offering health insurance to the old, disabled, uniformed service officers, and veterans – TRICARE, Medicare, CHAMPVA, among others. In addition, the plot targeted Medtronic health insurance, a medical device company, where Black had worked before. Black would engage individuals known to be on Medtronic’s health insurance plans and order them to get prescriptions for medically nonessential drugs for themselves, family members, and their friends, and then pay them kickbacks for these prescriptions. Black and one of his family member personally got a number of these medically nonessential prescriptions for scar and wound creams, including multiple for over $20,000 per tube.
The maximum sentence for health care and mail fraud cases is 20 years in federal prison and a fine of $250,000. The maximum punishment for health care fraud is 10 years in federal prison and a fine of $250,000. The maximum sentence for a kickback conspiracy sentence is 5 years in federal prison and a fine of $250,000. The maximum punishment for spending fraud proceeds charge is 10 years in federal prison and a fine of $250,000.
The case was investigated by IRS-CI, HHS-OIG, Federal Bureau of Investigation, DCIS, and USPIS. The prosecuting team was made up of U.S. Attorney’s Don Long, Edward Canter, and Chinelo Dike-Minor. The Inspector General Criminal Investigation Division, Veteran Affairs Office, provided help in the investigations.
Do you know of any individual or medical practitioner involved in such fraudulent schemes? If you do, don’t hesitate to approach a legal professional. Healthcare fraud is a serious crime. If you or anyone you know has witnessed any of the above situations or know of any company defrauding the healthcare program, our Healthcare Fraud Group is more than willing to help you. We can offer our assistance in legal matters pertaining to healthcare fraud. We are dedicated to providing you with the help that you need in dealing with legal disputes. We will give advice and suggestions on how you can move forward with your situation. Reach us now at 888-402-4054.
