Pharmacy company bribed doctors with hunting trips, gym passes in $54M scheme, feds say
Representatives of a Florida-based pharmacy were sentenced in what federal officials are calling a $54 million “fraudulent prescriptions scheme.”
Three men were sentenced in the scheme in which officials said the company bribed doctors to funnel prescriptions to their company, Florida Pharmacy Solutions, according to a Nov. 15 news release from the Department of Justice.
FPS made compounded prescriptions, which consist of combining or altering ingredients to create a product for the patient’s individual need.
FPS is accused of targeting physicians who served patients on TRICARE, which is a health insurance plan for military members and their families.
The men received sentences ranging from a year-and-a-half to over four years in prison in connection to the scheme, officials said. The men sentenced included:
A 60-year-old Alabama man who was a co-owner and CEO
A 55-year-old Florida man who was co-owner and senior sales manager
A 60-year-old Florida man who was a lead sales representative
They were all ordered to pay restitution to TRICARE. A fourth defendant was sentenced in April.
‘Millions of dollars in kickbacks’
Two of the defendants pleaded guilty and one proceeded to trial, where he was found guilty.
FPS found the most expensive way to create the prescription compounded creams they specialized in, according to officials.
Doing so allowed them to maximize the benefits they received from TRICARE, officials said. From 2012 to 2015, the company billed the health insurance program for $54 million, according to the release.
In the end, the company received more than $41 million in the scheme, federal officials said in a sentencing memorandum.
The company bribed the physicians with “lavish” hunting trips, expensive dinners and gym memberships to solicit “exorbitant reimbursement payments” from TRICARE, officials said in the release and memorandums.
The CEO paid the two other men “millions of dollars in kickbacks based on a percentage of the amount that TRICARE reimbursed for their prescriptions, which provided an incentive to seek prescriptions for the most expensive compounded drugs possible, including pain and scar creams,” according to the release.
The senior manager set up companies to “receive and funnel” the kickbacks, officials said.
“The Defendant is not a first-time offender who made a single bad decision,” officials wrote of the CEO in a sentencing memorandum. “The Defendant’s crimes represent several years of ongoing, intentional fraudulent and illegal conduct designed to enrich himself and his co-conspirators.”
Adam Allen, the attorney for the CEO, told McClatchy News in an emailed statement that other than his client’s time at FPS, he lived a “law-abiding life.”
“He is 60 years old,” Allen wrote. “So time before and after FPS he was living a law abiding life. His time with FPS lasted 7 years. So the Government is right it was not a single offense for example a bank robbery. But he also is not a person who has a long history of multiple unrelated criminal offenses.”
The attorney for the co-owner and senior sales manager who proceeded to trial could not comment on the case due to the possibility of an appeal.
He was found guilty on two counts of soliciting and receiving illegal health care kickbacks and three counts of offering and paying illegal health care kickbacks, officials said in June.
McClatchy News could not immediately reach the lead sales representative’s attorney Nov. 15.
Eventually, TRICARE stopped reimbursing FPS, and the defendants were charged in 2020.
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