Pharmacy Owner Pleads Guilty As Part Of Largest Health Care Fraud Case Ever In Mississippi

[nitpicker]

https://www.justice.gov/usao-sdms/pr/pharmacy-owner-pleads-guilty-part-largest-health-care-fraud-case-ever-mississippi-0

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

FOR IMMEDIATE RELEASE
Thursday, August 9, 2018

Pharmacy Owner Pleads Guilty As Part Of Largest Health Care Fraud Case Ever In Mississippi

Nationwide Compound Pharmacy Fraud Scheme Involved Almost a Quarter of a Billion Dollars

Hattiesburg, Miss. – Thomas Edward Spell, Jr., 50, of Ridgeland, pled guilty today before U.S. District Judge Keith Starrett to a Criminal Information outlining his role in a more than $240 million dollar scheme to defraud TRICARE, the health care benefit program serving our nation’s military, veterans, and their respective family members, announced U.S. Attorney Mike Hurst, FBI Special Agent in Charge Christopher Freeze, IRS-Criminal Investigation Acting Special Agent in Charge Thomas J. Holloman, III, and Special Agent in Charge John F. Khin of the Defense Criminal Investigative Service’s Southeast Field Office.

Spell’s case is part of the largest health care fraud scheme ever investigated and prosecuted in the State of Mississippi. The investigation is ongoing and prosecutions are continuing nationwide, including in states such as California, Tennessee, Arkansas, and Connecticut. Spell will be sentenced by Judge Starrett on October 16, 2018 at 10:30 a.m.
(snip)

From approximately August 2014 through January 2016, Spell owned and operated a pharmacy in Madison County, Mississippi, and several other pharmacies across the United States. During this time, Spell and other co-conspirators marketed compounded medications at his pharmacies. Rather than formulating compounded medications based on the individualized needs of patients, formulas were selected to maximize profit based upon reimbursements fromTRICARE and other health care benefit programs. At the direction of Spell and his co-conspirators, Spell’s pharmacies submitted fraudulent claims to TRICARE and other health care benefit programs. The result was that TRICARE reimbursed Spell’s pharmacies on these fraudulent claims totaling over $243 million.

In order to further their scheme, Spell and his co-conspirators waived TRICARE’s requirement that a beneficiary make a copayment to receive medicine. Instead, Spell and his co-conspirators had their employees purchase prepaid debit cards and money orders to use towards a copayment for a beneficiary, with Spell and his co-conspirators reimbursing their employees. Additionally, Spell and his co-conspirators paid kickbacks and bribes to marketers in order to obtain prescriptions for compounded medications from prescribers for beneficiaries who were covered by the most lucrative health care benefit programs, including TRICARE, irrespective of whether the compounded medications were medically necessary for the treatment of beneficiaries.

As a result of this fraudulent activity, Spell personally obtained over $29 million in proceeds from the illegal scheme. Spell used these proceeds to fund bank accounts and investment accounts in his name, in the name of familymembers, and in the name of various business entities. Spell also used these proceeds to lend money and to purchase vehicles, boats, and property. The United States is seeking forfeiture of these assets listed in the Information.
(snip)