Sixteen People Charged in $175,000,000 Insurance Fraud (compounded meds)

https://www.justice.gov/usao-sdfl/pr/sixteen-people-charged-175000000-insurance-fraud-scheme

Department of Justice
U.S. Attorney’s Office
Southern District of Florida

FOR IMMEDIATE RELEASE
Thursday, September 1, 2016

Sixteen People Charged in $175,000,000 Insurance Fraud Scheme
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A criminal Information charges sixteen defendants for their participation in a complex fraud scheme regarding the manufacture and distribution of compounded medications. The fraud involved material misrepresentations to health insurance providers and illegal payments to coconspirators and medical professionals, including physicians. The fraud generated in excess of $175,000,000 in criminal proceeds for the members of the criminal enterprise.
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According to the Information filed today, the defendants participated in a two-year conspiracy, which used various business entities, including Numed Care, LLC, ClinicalCorp, LLC, RX of Boca, and a compounding pharmacy located in Dallas, Texas (hereinafter referred to as “the Texas Compounding Pharmacy”'), to perpetrate a complex fraud on numerous health care insurance providers. The defendants prepared medications in bulk quantities which were alleged to be compounded medications for specific individualized patient needs. The defendants falsely represented to the health insurance providers that these medications were prepared in limited quantities for individual patients and were exempted from FDA inspection.

The health insurance providers compensated the defendants for the alleged costs of the ingredients for such medications. The defendants concealed from the health insurance providers that the defendants made illegal kickbacks to physicians for the issuance of the compounded medications. The defendants unlawfully provided the physicians with pre-printed prescription pads. In order to facilitate the fraudulent scheme, the defendants used mass marketing techniques and call centers, which made material misrepresentations in order to solicit potential patients. The defendants induced owners of failing pharmacies throughout the United States in order to perpetuate the fraud.
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