Ocean Springs man indicted in healthcare fraud case involving businessman Ken Ritchey

James Wesley “Trey” Martin III is the latest person arrested on a federal charge as a result of an investigation into an alleged healthcare fraud scheme involving Ocean Spring businessman Kenneth Ritchey.

The 30-year-old man from Ocean Springs pleaded not guilty Thursday during his arraignment on a federal charge of making false statements.

Martin appeared in federal court in Gulfport with his attorney, Tristen Russell Armer. He faces up to 5 years in prison and up to $250,000 in fines if convicted.

Judge Bradley Rath allowed Martin to remain free on a $25,000 unsecured bond.

New federal charges detail how Coast businessman ‘exploited’ COVID fears across Southeast

Martin is accused of committing the crime while working as a warehouse manager and permit holder for Gulf Coast Pharmaceuticals Plus, LLC. Ritchey controls and operates the Ocean-Springs-based business.

According to the charging document, Martin created the fraudulent paperwork at Ritchey’s direction for Jada Gilbert, the pharmacist in charge at Blue Ribbon Pharmacy in Harris County, Texas.

Gilbert called Martin to ask that he create the fraudulent paperwork after CVS Caremark decided to audit Gilbert’s pharmacy in 2019.

In April, Gilbert pleaded guilty in federal court in Gulfport to a federal charge of conspiracy to commit healthcare fraud.

As part of her plea, Gilbert admitted to conspiring with others to create fraudulent invoices and purchase logs for high-adjudication pharmaceutical products, namely specialized products to treat burns that she had never ordered or dispensed.

Gilbert admitted she was trying to conceal her crime when she submitted the fraudulent paperwork to CVS benefit managers during the audit in an attempt to prevent a claw back of over $330,000 her pharmacy received from CVS through the benefits program.

More on Ken Ritchey case

Martin is the latest to face arrest over alleged crimes involving Ritchey and GCPP.

Florida man pleads guilty in alleged medical equipment price gouging scheme

Ritchey is awaiting trial on federal charges that include 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.

He is accused of defrauding healthcare providers, such as Veterans Affairs hospitals, out of $18 million.

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 allegedly 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 only one of the 12 alleged co-conspirators involving the price-gouging scheme. Reich has been assisting federal authorities in their investigation.

Assistant U.S. Attorney Jonathan Buckner and Sara Porter are prosecuting the case.