Orange County Psychiatrist Sentenced to More than Four Years in Federal Prison for Writing Illegal Opioid Prescriptions to Drug Dealer

On June 19, 2019, a psychiatrist who practiced at a Santa Ana clinic was sentenced to 57 months in federal prison for issuing prescriptions for controlled substances, such as oxycodone, hydrocodone, alprazolam and amphetamine salts, to a non-patient in exchange for cash, admitting in his plea agreement that the prescriptions were without a medical purpose and he knew the drugs would be diverted and sold on the street.

Dr. Robert Tinoco Perez was sentenced by Judge Andrew J. Guilford. Dr. Perez pleaded guilty on February 25, 2019 to one felony count of conspiracy to distribute controlled substances.

Dr. Perez admitted that he wrote prescriptions for “patients” he had never met or examined, including an undercover officer. Dr. Perez admitted that he created fictitious medical records for drug customers to provide justification for their prescriptions.

Sacramento Man Sentenced to 3 Years in Prison for Causing Misbranded Drugs to Be Sold Online As Weight Loss and Fat Burner Pills

The U.S. Food and Drug Administration (FDA) has stepped up criminal enforcement where misbranded drugs are being sold online to consumers. On May 29, 2019, Scott Edward Cavell of Sacramento was sentenced by U.S. District Judge John A. Mendez to three years in prison for causing misbranded drugs to be introduced into interstate commerce for weight loss. 

According to plea agreement and court documents, between 2015 and 2017, Mr. Cavell, with others, developed a plan to market and sell a drug, 2,4-Dinitrophenol (also known as DNP), as a weight loss drug and “fat burner” despite knowing that DNP is not approved by the FDA as a substance for human consumption. Mr. Cavell sold DNP in pill form and called it a fertilizer — a term under which is it legally sold in other circumstances.

Lengthy Sentence Imposed Upon Patient Recruiter for Home Health Services Where Illegal Kickbacks Were Paid to Doctors and Patients

A Houston, Texas patient recruiter and home health agency owner was sentenced to 188 months in prison today for her role in a $20 million scheme to pay illegal health care kickbacks to physicians and Medicare beneficiaries in order to fraudulently bill for medically unnecessary home health services, and to launder the proceeds. Health care fraud sentences continue to get longer. One recent case involved a lengthy sentence even though it was part of a guilty plea. 

On May 29, 2019, a Houston, Texas patient recruiter Egondu "Kate" Koko was sentenced to 188 months (over 15 years) in federal prison for her role in a federal health care fraud case where she admitted she paid illegal kickbacks to physicians and Medicare beneficiaries in order to fraudulently bill for medically unnecessary home health services for four other home health agencies and her own. 

The sentence came after Ms. Koko pleaded guilty in October 2018 to one count of conspiracy to pay and receive health care kickbacks and one count of conspiracy to launder monetary instruments. This sentence was lengthier than the norm since there was a money laundering count as in her plea she admitted she laundered the proceeds through another person's bank account. 

Podiatrist Sentenced in Upcoding Medicare Fraud Case for Patients Seen at Assisted Living Facilities

Years ago, health care fraud cases would generally only be brought for outright fraud where there was ghost billing for patients not seen or other type of fraud. However, upcoded billing is now being charged more often when there is a significant pattern. A recent case involving a podiatrist illustrates this.

On May 17, 2019, podiatrist Loren Wessel of Tucson, Arizona was sentenced by U.S. District Judge James Soto for his role in a Medicare fraud scheme to serving a 24-month term of imprisonment. Mr. Wessel had previously pleaded guilty to Health Care Fraud. The Court also ordered Wessel to pay $965,985 in restitution to the Centers for Medicare and Medicaid Services.

In the plea agreement, Mr. Wessel admitted that from 2008 through June 2016 that he as a licensed podiatrist defrauded Medicare out of hundreds of thousands of dollars. In his plea agreement, Mr. Wessel admitted he submitted false claims to Medicare. As part of his practice, Mr. Wessel conceded that he regularly provided routine podiatry care for patients at assisted living facilities in and around Tucson, but fraudulently billed Medicare for more complex and significantly more expensive services that he had not performed. To further this upcoding, Mr. Wessel admitted that he falsely documented patients’ medical records with alleged ailments they did not have and with care Mr. Wessel did not provide.

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law

Ten Individuals Affiliated With Compounding Pharmacy, Including Owners, Pharmacist, Billing Manager, Sales Reps and Nurse Practitioner, Charged in Compounding Prescription Drug Case

In compounding cases, it is usually some very high billed creams that get attention. In a recent case, the government alleges that the defendants’ fraudulent conduct caused a prescription plan administrator to pay over $29,000 for one tube of a cream advertised as treating “general wounds.”
Another red flag in compounding cases are call centers with marketers. A recent case in Alabama has both. This case is also significant since it targeted many people who worked at the compounding pharmacy including sales representatives, billers, managers in addition to the owners and pharmacist.

On May 6, 2019, ten defendants were charged in a 103-count indictment, including a nurse practitioner, owners, a pharmacist, managers, sales representatives and billers, of an Alabama based pharmacy, Northside Pharmacy doing business as Global Compounding Pharmacy. 

The indictment charges them with fraudulently billing health care insurers and prescription drug administrators for over $200 million in prescription drugs.  An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.  The charges stem from a larger investigation that has to date resulted in 18 additional individuals being charged and signing plea agreements. 

According to the indictment, Global which allegedly described itself as “one of the top three largest compounding pharmacies in the United States,” primarily shipped compounded and other drugs from its Alabama facility, but did most of its prescription processing, billing and customer service at its “call center” in Clearwater, Florida. The company hired sales representatives who were located in various states and were responsible for generating prescriptions from physicians and other prescribers.  The company also worked with affiliated pharmacies.

The indictment describes a multi-faceted operation in which the defendants billed for medically unnecessary drugs.  The indictment alleges that the wrongdoing included:  

• paying prescribers to issue prescriptions; 
• directing employees to get medically unnecessary drugs for themselves, family members, and friends, to be filled and billed by Global and other related pharmacies; 
• altering prescriptions to add non-prescribed drugs including controlled substances such as Tramadol and Ketamine; 
• automatically refilling prescriptions—often as many as 12 times—regardless of patient need; 
• routinely waiving and discounting co-pays to induce patients to obtain and retain medically unnecessary drugs; and 
• billing for drugs without patients’ knowledge and hiding that conduct from patients by mailing the drugs to the home of Global's owner and president.  

According to the indictment, the defendants evaded and obstructed audits and questions about billings through various efforts, including by providing false information in response to audits and diverting their billing through affiliated pharmacies.  The defendants allegedly billed health insurance plans and their prescription plan administrators over $200 million and were paid over $50 million.

Owners of Arizona Home Health Care Business Sentenced to Prison for Medicare Health Care Fraud and Misprision of a Felony

A husband and wife owner of a home health business in Tucson, Arizona have been sentenced after guilty pleas in federal court. The case involved upcoding of services, billing for services of physicians or nurse practitioners when those professionals did not perform the services and for the forging of some names of the Medicare providers. Husband owner Stephen Allen Lamont pled guilty to federal health care fraud. 

The wife Elvia Lorena Lamont plead guilty to "misprision of a felony" which is a felony that does not have fraud as an element and we attorneys like to use it where possible as an alternative plea. Misprision of a felony is used where someone knows of a felony but conceals it and does not make it known to others. Usually, with misprision of a felony one would expect probation, but in this case both owners received a federal prison sentence.

In his plea agreement, Mr. Lamont admitted that he knowingly submitted false claims for services to Medicare. Mr. Lamont admitted that he fraudulently billed for services that were provided by nurses, medical assistants and a phlebotomist as if they had been performed by a medical doctor or nurse practitioner. Mr. Lamont also admitted that he upcoded or billed at the highest complexity level in order to increase the billings. 

On some occasions, Mr. Lamont admitted that he forged the signature of a medical doctor or other Medicare-approved provider before the claims were submitted for reimbursement. Elvia Lamont admitted that she knowingly shared in the proceeds from the Medicare fraud and concealed it from authorities.