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Friday, April 30, 2021
Multiple Defendants Sentenced in a Major Compounding Pharmacy Fraud Conspiracy
Department of Justice
U.S. Attorney’s Office
Northern District of Alabama
FOR IMMEDIATE RELEASE
Thursday, April 29, 2021
Multiple Defendants Sentenced in a Major Compounding Pharmacy Fraud Conspiracy
TUSCALOOSA, Ala. – This week, Chief U.S. District Judge L. Scott Coogler sentenced two dozen defendants who were part of a major conspiracy to commit health care fraud, announced U.S. Attorney Prim F. Escalona, Federal Bureau of Investigation Special Agent in Charge Johnnie Sharp, Jr., U.S. Department of Health and Human Services, Office of Inspector General, Special Agent in Charge Derrick L. Jackson, Defense Criminal Investigative Service Special Agent in Charge Cynthia Bruce, United States Postal Inspector in Charge, Houston Division, Adrian Gonzalez, and Internal Revenue Service Criminal Investigation Special Agent in Charge James E. Dorsey.
The defendants sentenced included an array of company executives and managers, a prescriber, billers, and sales representatives. Among those sentenced this week were:
John Jeremy Adams, 40, of Panama City Beach, Florida, the president and CEO of Global Compounding Pharmacy (Global), who directed the fraud and made millions from it, was sentenced to 170 months in prison on one count of conspiring to commit health care fraud and mail fraud, 19 counts of health care fraud, one count of conspiring to pay kickbacks to a prescriber, and 8 counts of spending the proceeds of health care fraud. Adams pleaded guilty to the charges in May 2020.
James A Mays, III, 45, of Winfield, Ala., was sentenced to 102 months in prison on one count of conspiring to commit health care fraud and mail fraud, twelve counts of health care fraud, and three counts of money laundering based on spending the proceeds of health care fraud. Mays was the pharmacist who handled Global’s compounding operation and made millions during the conspiracy. Mays pleaded guilty to the charges in February 2021.
Jessica Linton, 38, of Clearwater, Florida, was sentenced to 132 months in prison on one count of conspiracy, thirteen counts of health care fraud, three counts of mail fraud, and seven counts of aggravated identity theft. Linton was the manager in charge of Global’s billing center; she altered and added prescriptions, billed insurers for medically unnecessary prescriptions, and helped hide the fraud from auditors. In February 2021, a federal jury convicted Linton of these charges.
John Gladden, 51, of Tallahassee, Florida, was sentenced to 64 months in prison on one count of conspiracy, six counts of health care fraud, one count of mail fraud, and one count of aggravated identity theft. Gladden, a district manager for Global during most of 2015, directed his sales representatives to get medically unnecessary prescriptions for themselves and their family members and profited from the scheme. In February 2021, a federal jury convicted Gladden of these charges.
Phillip Marks, 52, of St. Augustine, Florida, was sentenced to 36 months in prison on one count of conspiracy and twelve counts of health care fraud. Marks served as a manager of the sales managers and, in 2015, pressured subordinates to get unnecessary prescriptions for themselves and their family members. Marks made more than $400,000 during his time at Global. He pleaded guilty to the charges in September 2018.
“The health care fraud conspiracy and scheme executed by these defendants caused health insurance companies to lose millions of dollars,” U.S. Attorney Escalona said. “These defendants manipulated the system for their own personal gain without regard for patient need or medical necessity. I applaud our prosecutors and law enforcement partners for their commitment and hard work on this complex investigation and prosecution.”
The sentencings came after an extensive investigation into a prescription drug billing scheme involving a Haleyville, Ala.-based pharmacy, Northside Pharmacy, doing business as Global Compounding Pharmacy. More than two dozen defendants pleaded guilty to charges, and two additional defendants went to trial in February 2021.
From 2013 to 2016, this large-scale conspiracy billed insurers for massive quantities of medically unnecessary prescription drugs. The scheme involved directing employees to get medically unnecessary drugs for themselves, family members, and friends, changing prescriptions to add non-prescribed drugs because insurance would pay for them, automatically refilling prescriptions regardless of patient need, routinely waiving and discounting co-pays to induce patients to get and keep medically unnecessary drugs, and billing for drugs without patients’ knowledge. When prescription drug administrators attempted to police this conduct, the conspirators hid their fraud and obstructed detection efforts—including by lying to auditors and diverting their billing through affiliated pharmacies. The scheme targeted multiple health insurance plans, including the pharmacy’s Blue Cross Blue Shield of Alabama plan, as well as plans providing health insurance to the elderly, disabled, members of the military, and veterans—Medicare, TRICARE, and CHAMPVA, among others.
The scheme resulted in pharmacy benefit managers paying Global nearly $50 million in claims in just a two-year period. Global received more than $13 million from prescriptions written by prescribers who were either paid cash to write them or whose spouses worked as Global sales reps. One nurse practitioner who wrote prescriptions was paid kickbacks in paper bags filled with thousands of dollars in cash and left in her car. Global also received over $8.4 million for prescriptions Global employees got for themselves—including from doctors they had never seen as patients. In some cases, Global was paid as much as $30,000 or more for a single tube of compounded cream.
The FBI, HHS-OIG, DCIS, USPIS, and IRS-CI investigated the cases. Assistant U.S. Attorneys J.B. Ward, Edward Canter, and Don Long prosecuted the case. The U.S. Department of Veterans Affairs Office of Inspector General, Criminal Investigations Division, aided in the investigation.
Wednesday, April 28, 2021
Tuesday, April 27, 2021
| 04/20/2021 | 03/24/2021 | Sky Global Food Inc | Division of West Coast Imports | Foreign Supplier Verification Program (FSVP) | ||
| 04/20/2021 | 04/12/2021 | Hou Fu Biotech - Jiangsu Co., Ltd | Center for Drug Evaluation and Research | Finished Pharmaceuticals/Unapproved New Drug/Misbranded/Adulterated |
| 04/27/2021 | 04/05/2021 | American Specialty Pharmacy, Inc. dba ASP Cares | Office of Pharmaceutical Quality Operations, Division II | Compounding Pharmacy/Adulterated Drug Products | ||
| 04/27/2021 | 04/08/2021 | Groupe Cyrenne Inc. dba HomeoAnimal | Center for Veterinary Medicine | Unapproved New Animal Drug Products | ||
| 04/27/2021 | 04/08/2021 | Exela Pharma Sciences LLC | Office of Pharmaceutical Quality Operations, Division II | Unapproved New Drug/Compounding/Misbranding | ||
| 04/27/2021 | 04/13/2021 | Orphic Nutrition | Office of Human and Animal Food Operations –West Division 5 | New Drug/Misbranded | ||
| 04/27/2021 | 04/15/2021 | pharmacygeoff.md | Center for Drug Evaluation and Research | Finished Pharmaceuticals/Unapproved New Drug/Misbranded | ||
| 04/27/2021 | 04/15/2021 | Joe Wise Pharmacy, Inc., dba Wise Pharmacy | Division of Pharmaceutical Quality Operations IV | Compounding Pharmacy/Adulterated Drug Products | ||
| 04/27/2021 | 04/23/2021 | KV Liquids LLC | Center for Tobacco Products | Family Smoking Prevention and Tobacco Control Act/Adulterated/Misbranded | ||
| 04/27/2021 | 04/23/2021 | Electric Freedom Inc dba Crown7 | Center for Tobacco Products | Family Smoking Prevention and Tobacco Control Act/Adulterated/Misbranded | ||
| 04/27/2021 | 04/23/2021 | DIY Vapor Supply LLC | Center for Tobacco Products | Family Smoking Prevention and Tobacco Control Act/Adulterated/Misbranded | ||
| 04/27/2021 | 04/23/2021 | RP Vapors, Inc. | Center for Tobacco Products | Family Smoking Prevention and Tobacco Control Act/Adulterated/Misbranded |
High Importance! Animal Drugs
As part of the FDA’s effort to protect animals, the agency issued a warning letter to Group Cyrenne Inc. dba HomeoAnimal. The company sells a “Virus Defense Kit” containing “Immunopet,” “Silverpet,” and “Cordyceps,” and misleadingly represents that the products can mitigate, prevent, treat, diagnose, or cure COVID-19 in pets. The company also markets unapproved drugs for conditions such as cancer, epilepsy, heartworm, parvovirus, and anemia. The FDA requested the company take action to cease the sale of any unapproved and unauthorized products for the treatment or prevention of COVID-19. Pet owners concerned about COVID-19 should consult with their veterinarians
High Importance!
- As part of the FDA’s effort to protect consumers, the agency issued a warning letter to an operator of one website, www.pharmacygeoff.md for marketing unapproved drugs for multiple diseases, including COVID-19. Drugs that have circumvented regulatory safeguards may be contaminated, counterfeit, contain varying amounts of active ingredients or contain different ingredients altogether. Consumers can visit BeSafeRx to learn about how to safely buy medicine online. Consumers concerned about COVID-19 should consult with their health care provider.
Monday, April 26, 2021
Owner Of Illegal Racehorse Doping Websites Pleads Guilty In Manhattan Federal Court Scott Mangini Peddled Performance-Enhancing Drugs Including “Blast Off Red Blood Builder,” “Extreme Explosion,” “Oral Epo,” and “Green Speed”
Owner Of Illegal Racehorse Doping Websites Pleads Guilty In Manhattan Federal Court
Scott Mangini Peddled Performance-Enhancing Drugs Including “Blast Off Red Blood Builder,” “Extreme Explosion,” “Oral Epo,” and “Green Speed”
Audrey Strauss, the United States Attorney for the Southern District of New York, announced that SCOTT MANGINI pled guilty today to conspiring to unlawfully distribute adulterated and misbranded drugs with the intent to defraud and mislead, in connection with the charges filed in United States v. Robinson et al., 20 Cr. 162 (JPO). MANGINI pled guilty before U.S. District Judge J. Paul Oetken, and will be sentenced on September 10, 2021, before Judge Oetken.
U.S. Attorney Audrey Strauss said: “Scott Mangini created and flooded the supply side of a market of greed that continues to endanger racehorses through the sale of performance-enhancing drugs. Mangini designed and created dozens of products intended for use by those engaged in fraud and animal abuse. His products were manufactured with no oversight of their composition, in shoddy facilities, despite prior efforts by state and federal regulators to shut down Mangini’s operation and strip his license. Mangini’s guilty plea underscores that our Office and our partners at the FBI are committed to the prosecution and investigation of corruption, fraud, and endangerment in the horse racing industry.”
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