Mississippi businessman sentenced in COVID fraud scheme that cost VA hospitals millions
A judge Wednesday sentenced former Ocean Springs businessman to serve five years in prison for his role in a multi-million dollar healthcare fraud case that involved the hoarding of scare personal protective gear during the COVID-19 pandemic
Kenneth Ritchey had denied wrongdoing initially but later pleaded guilty to six counts of conspiracy to commit healthcare fraud and wire fraud, one count of making false statements, conspiracy to defraud the United States, and conspiracy to hoard designated scarce materials as a result of the same investigation.
His arrest came after federal authorities raided his wholesale distribution business in Ocean Springs and seized various PPE gear and other items.
300,000 masks. 21,850 gloves. MS Coast businessman pleads guilty to COVID-19 price gouging
He defrauded healthcare providers, such as Veterans Affairs hospitals, out of $18 million.
In addition to prison, Judge Sul Ozerden fined Ritchey $50,000 and ordered him and a co-defendant to pay $281,086 in restitution.
The judge allowed Ritchey to remain free pending his assignment to a federal prison.
Price-gouging PPE gear
The indictment against Ritchey says that the PPE gear he was selling was marked up as much as 300% over costs, and providers bought them out of fear of being unable to get the equipment during the national emergency due to the COVID-19 pandemic.
To carry out the scheme, Ritchey directed his employees, including the head buyer for GCPP, Branden J. Reich of Broward County, Florida, to buy the PPE gear and paid him and others, for example, 50 cents for each N-95 mask they acquire plus expenses.
Reich, 36, worked at GCPP’s Fort Lauderdale branch.
Reich has already pleaded guilty to a federal charge of conspiracy to commit healthcare fraud as part of the PPE price-gouging scheme involving PPE gear. He is scheduled for sentencing later this month.
Third employee pleads guilty
Another former employee of Ritchey’s is awaiting sentencing on a federal charge of his role in the healthcare fraud scheme.
James Wesley “Trey” Martin III pleaded guilty earlier in August to a federal charge of making false statements. He is facing a maximum prison sentence of up to 5 years. His sentencing is set in November.
Martin, of Ocean Springs, committed the crimes while he worked as a warehouse manager and permit holder for GCPP. According to authorities, Martin created fraudulent invoices and purchases logs for Texas pharmacist, Jada Gilbert, so she could try to cover up her own fraudulent activity.
Martin produced the paperwork after Gilbert called him to ask that he create the fictitious paperwork after she learned of an unexpected audit CVS Caremark planned for her pharmacy in Harris, Texas.
Florida man pleads guilty in alleged medical equipment price gouging scheme
Gilbert, who has already been sentenced for prison for her role in the scheme, went through Ritchey, who controls and operates GCPP, to get Martin to go forward with her request.
Gilbert needed the paperwork to try to cover up how she never received or dispensed or received certain costly pharmaceutical products at her Texas pharmacy.
Assistant U.S. Attorney Jonathan Buckner and Sara Porter are prosecuting the cases against Ritchey, Reich and Martin.
