Camden, New Jersey- On 17th September 2020, U.S. Attorney Craig Carpenito announced that three previous managers of a compounding chemist based in Louisiana were indicted on a twenty-four charge with utilizing the chemist to swindle New Jersey and military health welfare programs.
Christopher Kyle Johnson, age 41, from Mandeville, Louisiana; Christopher Casseri, age 52, from Baton Rouge Louisiana; and Trent Brockmeier, age 58, from Pigeon Forge, Tennessee, were indicted with conspiracy to perpetrate health care fraud scheme and wire fraud and a second conspiracy to perpetrate identity theft by using a persons’ private identifying information without their authorization. Casseri was further indicted for frequently lying to federal agents when grilled. Brockmeier and Johnston would face additional indictments of conspiracy to perpetrate money laundering and strong charges of money laundering for transactions involving over 43 million USD in illegal gains they acquired from the plot.
The suspects were expected to appear in front of U.S. Magistrate Judge Ann Marie Donio via videoconference. The issue was transferred to U.S. District Judge Robert B. Kugler in Camden.
As per the charges:
Central Rexall Drugs was a trade chemist located in Louisiana that created compounded drugs, which are specialty drugs blended by a chemist to meet the individual health need of a particular patient. In 2013, Brockmeier and Johnston signed a contract with Hayley Taff, Central Rexall’s chief executive officer- who admitted guilt on 12th August 2020 to conspiracy to perpetrate health care fraud- to take over the administration of the chemist and develop the compounding business in the trade for 90% of the proceeds. Johnston became the general counsel, and Brockmeier became senior operation officer. They employed Casseri as the deputy president of sales to control the outside sales forces of Central Rexall.
Brockmeier, Casseri, and Johnston discovered that some insurance programs provided by a particular company named in the charge as “Pharmacy Benefits Administrator” would remunerate thousands of USDs for a month’s supply of particular compounded drugs- such as antifungal, pain, and scare lotions, as well as vitamin blends. The health program for the New Jersey state and local education and government workers, such as firefighters, state troopers, teachers, and municipal police officers, had that insurance plan, as did TRICARE, which covers current and previous members of the military and their dependents.
The 3 suspects produced compounded drugs and changed the ingredients in the drugs to acquire high remuneration rather than serve the patients’ health requirements. To ascertain which ingredients and blends gave rise to high insurance remunerations, Brockmeier, Casseri, and Johnston made Central Rexall employees issue the Pharmacy Benefits Administrator falsified prescription allegations to examine various blends of ingredients, but the prescriptions never existed. By trial and error utilization of those falsified allegations, Brockmeier, Casseri, and Johnston produced compounded drugs with the blending of ingredients that were selected sorely based on the sum of money that insurance would remit rather than on the medical capacity to serve the health requirements of the patients. They ordered Central Rexall to dispatch compounded drugs based purely on monetary profit, without any research or examination to indicate that the blend of ingredients was productive.
When the Pharmacy Benefits Administrator terminated covering one blend, the suspects would create a compounded drug with a different blend of ingredients based purely on the insurance remuneration and without taking into consideration the medical need or effectiveness of the new mixture. Central Rexall would then issue the new compounded drug to patients, even though the new blend of ingredients was not medically equal to the blend initially prescribed for the patients, without informing the patients or physicians about the contrast.
Brockmeier, Casseri, and Johnston managed and operated the outside sales force which utilized different procedures to make physicians to prescribe those drugs and patient to use them, such as signing prescriptions without the patient visiting the physician or being aware of the drug, having drugs or refills requested with the patients’ consent, and remitting patients to accept the drugs and remitting physicians to remit them.
Brockmeier, Casseri, and Johnston, and their accomplices resulted in more than 50 million USD in fraudulent insurance allegations for compounded drugs that were medically unnecessary. Johnston collected more than 34 million USD, and Brockmeier collected more than 5 million USD in illegal gains, and Casseri collected a bonus of 200,000 USD.
The charge also indicted Brockmeier, Casseri, and Johnston with a second plot to perpetrate identity theft. The suspects exploited the patients’ dates of birth, names, and identifying data (as well as insurance data) without their authorization from already existing Central Rexall prescriptions and utilized the data to create the falsified test allegations to the Pharmacy Benefits Administrator.
The health care fraud and wire fraud charge bear a maximum potential punishment of twenty years in federal prison and a 250,000 USD fine, or double the profit or loss from the crime. The false declaration charge and the conspiracy to perpetrate identity theft charge each bears a maximum term of 5 years in federal prison and a 250,000 USD fine, or double the total profit or loss from the crime. The money-laundering accusations bear a maximum term of ten-years imprisonment and a 250,000 USD fine or double the total profit or loss from the crime or over twice the total of the criminally acquired property used in the transactions.
U.S. Attorney Carpenito commended the investigation team, which included the IRS-Criminal Investigation, under the supervision of Special Agent Michael Montanez in Charge in Newark; the Defense Criminal Investigative Service, Southeast Field Office, led by Special Agent in Charge Cyndy Bruce; the U.S. Department of Labor-Office of Inspector General, under the supervision of Special Agent in Charge Michael C. Mikulka, New York Region; and the special agents of the FBI’s Atlantic City Resident Agency in Newark, led by Special Agent in Charge George M. Crouch, Jr. He also commended the Divisions of Pensions and Financial Transactions in the State Attorney General’s Office, under the supervision of Division Chief Aimee Nason and Attorney General Gurbir S. Grewal for helping in the investigation leading to the indictment.
Assistant U.S. Attorneys of the U.S. Attorney’s Office in Camden Christina O. Hud and R. David Walk, Jr. stood in for the government in the proceeding.
The accusations and charges contained in the lawsuit are just allegations, and the suspects are considered to be innocent until or unless found guilty.
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