Florence man arrested in nationwide health care fraud takedown

BIRMINGHAM – The U.S. Attorney’s Office for the Northern District of Alabama this week charged five employees, including a district and an operations manager, of an Alabama-based compounding pharmacy with participating in a conspiracy to generate prescriptions and defraud health care insurers and prescription drug administrators out of tens of millions of dollars.
U.S. Attorney Jay E. Town announced the charges against employees of Northside Pharmacy, based in Haleyville and doing business as Global Compounding Pharmacy, as part of a nationwide health care fraud takedown. Global’s compounding and shipping facility was in Haleyville, but the pharmacy did its prescription processing, billing and customer service at its “call center” in Clearwater, Florida.
Attorney General Jeff Sessions and Department of Health and Human Services Secretary Alex M. Azar III this week announced the largest ever health care fraud enforcement action involving 601 charged defendants across 58 federal districts, including 165 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $2 billion in false billings. Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units participated in today’s arrests. In addition, HHS announced today that from July 2017 to the present, it has excluded 2,700 individuals from participation in Medicare, Medicaid, and all other federal health care programs, which includes 587 providers excluded for conduct related to opioid diversion and abuse.
Attorney General Sessions and Secretary Azar were joined in the announcement by Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, FBi Deputy Director David L. Bowdich, Drug Enforcement Administration Assistant Administrator John Martin, HHS-Office of Inspector General Deputy Inspector General Gary Cantrell, IRS Criminal Investigation Deputy Chief Eric Hylton, Centers for Medicare and Medicaid Services Deputy Administrator and Director of the Center for Program Integrity Alec Alexander, and Defense Criminal Investigative Service Director Dermot F. O’Reilly.
Today’s enforcement actions were led and coordinated by the Criminal Division, Fraud Section’s Health Care Fraud Unit in conjunction with its Medicare Fraud Strike Force partners, a partnership between the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG. In addition, the operation includes the participation of the DEA, DCIS, IRS-CI, Department of Labor, other various federal law enforcement agencies, and State Medicaid Fraud Control Units.
The charges announced aggressively target schemes billing Medicare, Medicaid, TRICARE, a health insurance program for members and veterans of the armed forces and their families, and private insurance companies for medically unnecessary prescription drugs and compounded medications that often were never even purchased or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department. According to the CDC, approximately 115 Americans die every day of an opioid-related overdose.
“Health care fraud is a betrayal of vulnerable patients, and often it is theft from the taxpayer,” said Attorney General Sessions. “In many cases, doctors, nurses, and pharmacists take advantage of people suffering from drug addiction in order to line their pockets. These are despicable crimes. That’s why this Department of Justice has taken historic new steps to go after fraudsters, including hiring more prosecutors and leveraging the power of data analytics. Today the Department of Justice is announcing the largest health care fraud enforcement action in American history. This is the most fraud, the most defendants, and the most doctors ever charged in a single operation — and we have evidence that our ongoing work has stopped or prevented billions of dollars’ worth of fraud. I want to thank our fabulous partners with the FBI, DEA, our Health Care Fraud task forces, HHS, the Defense Criminal Investigative Service, IRS Criminal Investigation, Medicare, and especially the more than 1,000 federal, state, local, and tribal law enforcement officers from across America who made this possible. By every measure we are more effective at finding and prosecuting medical fraud than ever.”
U.S. Attorney Town said, “The defendants in the north Alabama case helped their employer, Global Compounding Pharmacy, defraud millions from Medicare, Blue Cross Blue Shield of Alabama and other insurance systems by pushing unnecessary medications and billing for reimbursement. The greed of these defendants, and this company, resulted in the distribution of medication when there was no need, with the primary focus on profit rather than the efficacy of care. The costs are not just monetary, but have social and health impacts on us all.”
“Every dollar recovered in this year’s operation represents not just a taxpayer’s hard-earned money – it’s a dollar that can go toward providing healthcare for Americans in need,” said HHS Secretary Azar. “This year’s Takedown Day is a significant accomplishment for the American people, and every public servant involved should be proud of their work.”
According to court documents, defendants from the national sweep allegedly participated in schemes to submit claims to Medicare, Medicaid and TRICARE for treatments that were medically unnecessary and often never provided. In many cases, the charges are that patient recruiters, beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of submitting a total of more than $2 billion in fraudulent billings. The number of medical professionals charged is particularly significant, because virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims. Aggressively pursuing corrupt medical professionals not only has a deterrent effect on other medical professionals, but also ensures that their licenses can no longer be used to bilk the system.
In the Global Compounding Pharmacy case in north Alabama, the defendants are charged with taking part in a multi-faceted, multi-million dollar scheme to defraud multiple insurance plans and their third-party pharmacy benefit managers by billing for fraudulent, often high-dollar prescriptions that Global would fill and bill for reimbursement. To maximize proceeds, Global engaged in additional fraudulent practices including automatically refilling and billing for prescriptions, regardless of patient need, and routinely waiving co-pays to incentivize patients to accept unnecessary medications and refills, according to charges and plea agreements in the case.
The U.S. Attorney’s Office, through separate informations filed in U.S. District Court, and all with associated plea agreements charged Global Operations Manager JEFFREY SOUTH, District Manager ANGIE NELSON, sales representatives RODDRICK BOYKIN and DAWN WHITTEN, and biller STACEY CARDOZO. The informations charge each of the defendants with one count of conspiracy to commit wire fraud, mail fraud and health care fraud. South, Nelson, Boykin and Whitten also are charged with varying counts of health care fraud, and Whitten also faces a charge of aggravated identity theft.
The charges against South, 47, of Florence, Alabama, Nelson, 40, of Santa Rosa Beach, Florida, Boykin, 45, of San Antonio, Texas, Whitten, 55, of Columbus, Georgia, and Cardozo, 28, of Largo, Florida, add to eight Global sales representatives previously charged by the U.S. Attorney’s Office and who all have pled guilty to the conspiracy and scheme.
“These defendants, motivated by pure greed, helped conduct a complicated scheme to obtain unnecessary, high-priced medications, purely to gain the insurance reimbursement,” said Birmingham FBI Field Office Special Agent in Charge Johnnie Sharp Jr. “Rooting out health care fraud is central to the well-being of both our citizens and the overall economy. Health care fraud costs the country tens of billions of dollars a year, and the FBI seeks to identify and pursue investigations against the most egregious offenders involved in health care fraud through investigative partnerships with other federal agencies.”
According to court documents, Global hired sales representatives who were located in various states and were responsible for generating prescriptions from physicians and other prescribers. To generate a high volume of prescriptions, Global hired representatives who were married or related to doctors and other prescribers, and encouraged sales representatives to volunteer at doctors’ offices where they would review patient files and push Global’s products to patients, according to court documents.
The FBI, U.S. Postal Inspection Service, HHS-OIG, DCIS and IRS-CI, investigated the Global cases, which Assistant U.S. Attorneys Chinelo Dike-Minor, Don Long and Nicole Grosnoff are prosecuting.
The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in 10 locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,700 defendants who, collectively, have falsely billed the Medicare program for more than $14 billion.
A complaint, information, or indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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