Thursday, March 26, 2009

Woman Pleads Guilty To Mail Fraud And Causing Fertility Drugs To Be Dispensed Without Prescription

On March 9, 2009, Heidi Benham, a former patient of a fertility clinic plead guilty in Massachussets federal court before U.S. District Judge Douglas P. Woodlock to an Indictment charging eight counts of mail fraud and seven counts of causing prescription drugs to be dispensed without a prescription.

At the plea hearing, the prosecutor told the Court that had the case proceeded to trial, the Government’s evidence would have proven that, beginning in approximately February 2001 and continuing through October 2005, Benham created a scheme to obtain prescription fertility drugs through fraud. As part of this scheme, Benham caused her health insurance plan to pay for the drugs she obtained via fraud, and then sold these drugs for profit via classified advertisements that Benham placed on the Internet.

Benham had originally been a patient seeking fertility treatments when she began this conduct. Benham called certain specialty pharmacies that carried prescription drugs used in fertility treatments and falsely claimed that she was a representative of a physician’s office. In the call, Benham told the pharmacies that the physician had either prescribed or authorized a refill of a prescription of certain fertility drugs for herself. Relying upon these false statements, the pharmacies sent various prescription fertility drugs to Benham’s residence and billed her health insurance plan for the drugs. The Government estimated that Benham’s health insurance plan paid more than $500,000 in insurance claims in connection with fraudulent prescriptions for fertility drugs that were provided.

Upon receipt of the prescription fertility drugs, Benham sold the drugs for profit to customers throughout the country using Internet classified advertisements that she posted on various Internet bulletin boards. The government estimated that Benham received approximately $160,000 from her sales of these drugs. Judge Woodlock scheduled sentencing for June 16, 2009. The maximum sentence Benham faces is up to 20 years imprisonment, to be followed by 3 years of supervised release and a fine of over $1,000,000. Benham also may be ordered to forfeit $160,000.

Post-Script - Sentencing:  Sentencing was held July 10, 20110, and Ms. Benham was sentenced to three years' imprisonment followed by three years' supervised release.

Attorney Comments: The pharmacies who were targeted by this woman also face financial repercussions in that the health insurers who paid them may seek recovery of the funds on the ground that the drugs were dispensed without a valid prescription. The repayment demand would depend in part on the records maintained by the pharmacy and whether there was independent verification with the medical office. Our office worked on a number of cases where prescription medications used to treat HIV positive patients were obtained by patients fraudulently and resold and the physicians and pharmacies involved were at risk civilly and criminally. Compliance is key in this area -- especially where the medications are expensive.

Any questions or comments should be directed to: Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals and businesses in civil, business, administrative and criminal proceedings, with a specialty in health care providers.

Posted by Tracy Green, Esq.
Phone 213-233-2260


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