Department of Justice

U.S. Attorney’s Office

Southern District of Florida

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FOR IMMEDIATE RELEASE

Wednesday, January 26, 2022

Former South Florida Pharmacy Executive Pleads Guilty to $88 Million Health Care Fraud Conspiracy Targeting Military Health Care Programs

Miami, Florida – A Palm Beach County, Florida man has pleaded guilty to his role in a multi-million-dollar conspiracy to defraud Tricare and CHAMPVA through a South Florida compounding pharmacy fraud scheme.

As part of his guilty plea, 58-year-old Matthew Smith admitted his role in fraudulently billing Tricare and CHAMPVA for expensive, medically unnecessary compound drugs from a Broward pharmacy. Tricare and CHAMPVA are the health care benefit programs for the United States Department of Defense and Department of Veterans Affairs.  In furtherance of the scheme, Smith—then executive vice-president of the pharmacy—and his co-conspirators paid approximately $40 million in kickbacks to patients, patient recruiters and doctors in exchange for their ordering expensive pain creams, scar creams and vitamins without regard to the beneficiaries’ actual medical needs.  The drugs were formulated to maximize profit without legitimate therapeutic value.  The reimbursement rates sometimes reached $15,000 for a one-month supply.  In addition, the pharmacy did not charge beneficiaries the mandatory copayments, something that the co-conspirators concealed.  The fraudulent billings caused a loss to the programs of approximately $88 million.

Smith pled guilty to one count of conspiring to commit health care fraud.  Sentencing is scheduled for April 5, at 3:00 p.m., in Miami, before U.S. District Judge Roy K. Altman. Smith faces up to 10 years in federal prison.

U.S. Attorney Juan Antonio Gonzalez of the Southern District of Florida; Special Agent in Charge Cynthia A. Bruce, Department of Defense Inspector General’s Defense Criminal Investigative Service (DCIS), Southeast Field Office; Special Agent in Charge David Spilker, Veterans Affairs, Office of Inspector General (VA-OIG), Southeast Field Office; Special Agent in Charge George L. Piro of the FBI Miami; and Special Agent in Charge Justin C. Fielder, FDA Office of Criminal Investigations’ Miami Field Office, made the announcement.

“Fraudsters steal exorbitant amounts of money from our government health programs through prescription medication fraud schemes,” said U.S. Attorney Gonzalez. “Those who use kickback payments and fraudulent billing activities to defraud vital public programs will be held accountable.”

“Compounding pharmacy fraud bilked the Defense Health Agency of over a billion dollars and exploited not only the military, but all citizens,” said DCIS Special Agent in Charge Bruce.  “I thank the U.S. Attorney’s Office and our investigative team for their tireless effort to untangle this web of crime, trace the assets, and hold these individuals accountable.”

“The defendant pleaded guilty for his abhorrent conduct in defrauding multiple federal healthcare programs meant to benefit deserving veterans and their families,” said Special Agent in Charge David Spilker of the Department of Veterans Affairs Office of Inspector General’s Southeast Field Office. “The VA OIG is committed to continuing its work with our law enforcement partners to ensure the integrity of VA’s healthcare and benefit programs.”

“Illegal kickbacks undermined the integrity of the Tricare health benefit program by putting profits in front of patient welfare,” said George L. Piro, Special Agent in Charge, FBI Miami. “The investigators who unraveled this scam are to be commended for their diligence and commitment.  The FBI and our partners will continue to pursue those individuals who pay kickbacks and fraudulently bill for medical services that are not necessary.”

“Criminals whose schemes cause medically unnecessary prescription drugs to be sent to consumers could put the public health at risk,” said Special Agent in Charge Justin C. Fielder, FDA Office of Criminal Investigations’ Miami Field Office. “We will continue to pursue and bring to justice those who place profits above public health.”

The DCIS, VA-OIG, FBI, and the FDA, investigated the case.

Assistant U.S. Attorney Jon Juenger prosecuted the case.  Assistant U.S. Attorney Daren Grove is handling the asset forfeiture component of the case.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.

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Topic(s): 

Health Care Fraud

Component(s): 

USAO - Florida, Southern

Contact: 

Marlene Rodriguez Special Counsel to the U.S. Attorney Public Affairs Officer USAFLS.News@usdoj.gov

Updated January 26, 20

Mississippi pharmacist gets 5 years for $180M health fraud Jan. 26, 2022

read here 

 

Posted Date	Letter Issue Date	Company Name	Issuing Office	Subject	Response Letter
01/25/2022	01/25/2022	Go Vapor LLC	Center for Tobacco Products	Family Smoking Prevention and Tobacco Control Act/Adulterated/Misbranded
01/25/2022	01/25/2022	D & J Vapors, LLC-Horse Cave	Center for Tobacco Products	Family Smoking Prevention and Tobacco Control Act/Adulterated/Misbranded
01/25/2022	01/12/2022	Aurobindo Pharmaceutical Limited	Center for Drug Evaluation and Research | CDER	CGMP/Active Pharmaceutical Ingredient (API)/Adulterated
01/25/2022	01/21/2022	SAS Technologies, Inc d/b/a Save A Smoker	Center for Tobacco Products	Family Smoking Prevention and Tobacco Control Act/Adulterated/Misbranded
01/25/2022	12/29/2021	Health Plus Inc.	Division of Pharmaceutical Quality Operations IV	CGMP/Finished Pharmaceuticals/Adulterated
01/25/2022	01/06/2022	Concord Farms, Inc.	Division of West Coast Imports	Foreign Supplier Verification Program (FSVP)
01/25/2022	01/21/2022	Yuni Wholesale, Inc. d/b/a Blow Disposables	Center for Tobacco Products	Family Smoking Prevention and Tobacco Control Act/Adulterated/Misbranded
01/25/2022	01/14/2022	Global Vapery LLC and Infinite Vapor LLC	Center for Tobacco Products	Family Smoking Prevention and Tobacco Control Act/Adulterated/Misbranded
01/25/2022	01/10/2022	Onofrio's Fresh Cut, Inc.	Office of Human and Animal Food Operations - East Division 1	CGMP Food/Prepared, Packed or Held Under Insanitary Conditions/Adulterated
01/25/2022	01/18/2022	CES LLC	Center for Drug Evaluation and Research | CDER	Drug Product/

 

January 19, 2022 Janet Woodcock, M.D. Acting Commissioner ...

https://a4pc.org › files › 2022-01-19_GFI-256-Dr...

PDF

6 days ago — We write to you today regarding our concerns with the Food and Drug Administration's. (FDA) Guidance for Industry #256, “Compounding Animal Drugs fro

 Department of Justice

U.S. Attorney’s Office

Western District of Virginia

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FOR IMMEDIATE RELEASE

Monday, January 24, 2022

Former Veterinarian Pleads Guilty to Drug Charges

LYNCHBURG, Va. – A Madison Heights, Virginia man and former veterinarian pleaded guilty to a pair of misdemeanor drug charges related to his diversion of hydromorphone, an opioid drug also known under the trade name of “Dilaudid.”

Patrick Gries, 54, pleaded guilty last week to one count of adulteration of a drug held for sale after shipment in interstate commerce and one count of distribution of a controlled substance without a written prescription.

“The U.S. Attorney’s Office is committed to working with our partners at the FDA, and elsewhere, to ensure consumer products are stored and prescribed using the most safe and secure protocols possible,” United States Attorney Christopher R. Kavanaugh said today. “When individuals with access to controlled substances break those safety protocols, even for individual use, they must be held accountable.”

“The FDA oversees the U.S. drug supply to ensure that it is safe and effective, and those who knowingly tamper with medicines put the health of patients (whether they are human or animal) at risk,” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations Metro Washington Field Office. “We will continue to protect the public health and bring to justice health care professionals who take advantage of their unique position and compromise their patients’ health and comfort by tampering with needed drugs.”

According to court documents, from 1994 through 2021, Gries practiced as a Doctor of Veterinary Medicine at a veterinary hospital in Amherst County, Virginia. The veterinary hospital held hydromorphone for sale and maintained supplies of hydromorphone for use in treating pain in the hospital’s animal patients following surgeries.

As the hospital’s primary surgeon, Gries had full access to the hospital’s supply of hydromorphone. Beginning in July 2020 and without a valid prescription, Gries diverted hydromorphone for personal use by withdrawing a portion of the hydromorphone from the vial and injecting it into himself. He would then replace the diverted portion of the hydromorphone with another substance, usually either saline or butorphonal, and then return the altered hydromorphone to the supply maintained by the hospital.

The Food and Drug Administration - Office of Criminal Investigations, the Drug Enforcement Administration - Diversion Control Division, and the Virginia State Police investigated the case. 

Component(s): 

USAO - Virginia, Western

Updated January 24, 2022

 

Animal Shelter - Inspection Guide.pdf

https://www.pharmacy.ohio.gov › TDDD › Inspec...

PDF

4 days ago — Drug Compounding. 39. Prescriptions. 40. Expired/Adulterated Drugs. 41. General Record Keeping. 43. Temporary Removal of Drugs. 45. Chemical Capture.

 

002 - CR 22-007 Rule Text - Wisconsin Legislature

https://docs.legis.wisconsin.gov › register › rule_notices

7 hours ago — Additionally, all pharmacies that compound drugs must maintain a set of ... For non-patient specific or “office use” of non-sterile compounded drugs, ...

Mark Cuban's drug company launches online pharmacy

https://www.beckershospitalreview.com/pharmacy/mark-cuban-s-drug-company-launches-online-pharmacy.html 

 Department of Justice

U.S. Attorney’s Office

Southern District of California

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FOR IMMEDIATE RELEASE

Thursday, January 20, 2022

San Diego Pharmacy Pays $105,000 Penalty for Illegitimately Dispensing Opioids

SAN DIEGO – San Diego’s Balboa Pharmacy has paid $105,000 to resolve allegations that it illegally dispensed opioids and other dangerous drugs to its patients, according to a settlement agreement signed by Balboa Pharmacy and the United States. The settlement stems from the United States’ continued efforts to combat the opioid epidemic on all fronts, including this investigation of whether Balboa Pharmacy illegally dispensed opioids to its patients in violation of the federal Controlled Substances Act.

The Controlled Substances Act states that pharmacists have a responsibility to only fill prescriptions that are written for a legitimate medical purpose while acting in the usual course of professional practice. The United States alleged that Balboa Pharmacy failed to meet its responsibility when it filled opioid prescriptions without resolving—or often even attempting to resolve—“red flags” that the prescriptions raised. “Red flags” are indications that a prescription may be invalid. According to the settlement agreement, Balboa Pharmacy filled prescriptions without resolving the following commonly known red flags:

• large quantities of opioids well above guidelines for treating patients, which sometimes exceeded a daily Morphine Milligram Equivalent of 100;
• dangerous combinations of drugs, including duplicative therapy; opioids and benzodiazepines (e.g., Valium, Xanax); and opioids, benzodiazepines, and muscle relaxants (e.g., Soma), a combination that is colloquially referred to by drug abusers as the “trinity” because of the rapid euphoric effects of this combination of drugs;
• patients who received prescriptions from multiple prescribers, which sometimes were for the same types of controlled substances or for dangerous combinations of drugs; and
• filling prescriptions for patients early, which includes filling a patient’s prescription before the patient’s earlier prescription for the same drug ran out.

The investigation exemplifies the Department of Justice’s willingness to investigate pharmacies that may be filling dangerous prescriptions without first confirming the legitimacy of each prescription. Public health experts have long warned health care providers that overdose risk is elevated in patients receiving medically prescribed opioids, particularly those receiving high dosages. Pharmacists should carefully track the potency of opioids dispensed to patients by noting the Morphine Milligram Equivalent (MME, also commonly referred to as Morphine Equivalent Dose or MED) of prescribed opioids. Among other things, tracking MMEs advances better practices for pain management by reinforcing the need to consider alternatives to using high-dosage opioids to treat pain, and to appropriately justify decisions to use opioids at dosages that place patients at high risk of addiction, abuse, and overdose. Furthermore, dispensing high dosages increases the risk that patients will divert opioids.

“Pharmacies are the last line of defense protecting the public from addictive opioids and other controlled substances,” said U.S. Attorney Randy S. Grossman. “This office will pursue pharmacists who carelessly disregard red flags, opting instead to rubberstamp questionable prescriptions. We will continue to use all available tools to combat the serious opioid epidemic.” Grossman thanked the prosecution team and investigators for their excellent work on this case.

In addition to the settlement agreement, the DEA and Balboa Pharmacy entered into a Memorandum of Agreement in October 2021 in which Balboa Pharmacy agreed to, among other things, develop policies and procedures and training that address the identification and resolution of “red flags.”

“This investigation is a reminder that all pharmacies have a responsibility to ensure that prescriptions are issued for a legitimate medical purpose,” said DEA Special Agent in Charge Shelly S. Howe.  “Failure to do so allows prescriptions to become subject to abuse and diversion, fueling the ongoing opioid epidemic.  DEA will continue to hold pharmacies, such as Balboa Pharmacy, accountable.”

To report a tip directly to a DEA representative regarding medical personnel writing suspicious opioid prescriptions and pharmacies dispensing large amounts of opioids, call (571) 324-6499, or visit the DEA’s website (https://www.deadiversion.usdoj.gov/) and click on “Report Illicit Pharmaceutical Activities.”

Assistant U.S. Attorney Dylan M. Aste of the U.S. Attorney’s Office for the Southern District of California handled this matter along with DEA investigators.

The claims resolved by this settlement are allegations only and there has been no determination of liability.

 

Topic(s): 

Opioids

Component(s): 

USAO - California, Southern

Contact: 

Assistant U. S. Attorney Dylan M. Aste (619) 546-7621

Press Release Number: 

CAS22-0120-Balboa Pharmacy

 Department of Justice

U.S. Attorney’s Office

Southern District of Georgia

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FOR IMMEDIATE RELEASE

Thursday, January 20, 2022

Jacksonville pharmacist, pharmacy owner admit to charges related to illegally filling drug prescriptions issued by south Georgia doctor

Both await sentencing in federal court

BRUNSWICK, GA: A pharmacist and a pharmacy owner await sentencing after pleading guilty to charges related to a conspiracy to unlawfully dispense controlled substances.

Gilbert Nelson Weise, Jr., 58, of Jacksonville, Fla., faces up to five years in prison after pleading guilty to a charge of conspiracy to dispense controlled substances without a legitimate medical purpose and not in the usual course of professional practice, said David H. Estes, U.S. Attorney for the Southern District of Georgia. Weise also faces substantial financial penalties and up to three years of supervised release after completion of any prison term. There is no parole in the federal system.

“As demonstrated through this investigation, pill-mill clinics cannot thrive without pharmacists willing to fill their unlawful prescriptions,” said U.S. Attorney Estes. “Pharmacists have an obligation to scrutinize suspicious controlled substances and ensure they are issued for legitimate purpose. In this case, not only did the defendant negligently ignore the presence of red flags, but he also knowingly and intentionally agreed to fill prescriptions that he knew to be unlawful and appropriately is being held to account.”

As described in court documents, from on or about Oct. 9, 2014 to June 13, 2017, in Camden County, in the Southern District of Georgia, in the Middle District of Florida, and elsewhere, Weise and others conspired to dispense hydromorphone, oxycodone, and hydrocodone, among other drugs, for no legitimate medical purpose and outside the usual course of professional practice, in violation of federal law. The prescriptions in question were issued at a nominal pain management clinic known as Coastline Physical Medicine and Rehabilitation, Inc. in St. Mary’s, Ga. The physician at Coastline – who was charged in the indictment but subsequently judged incapable of standing trial – routinely dispensed controlled substances not for a legitimate medical purpose and not in the usual course of professional practice and in so doing generated significant amounts of cash. Between Oct. 9, 2014 and June 13, 2017, drug-seeking customers typically paid approximately $300 cash to Coastline in exchange for prescriptions. To enable more patients to fill their prescriptions, a co-conspirator contacted Weise, Jr., who agreed to fill Coastline’s prescriptions at Weise Prescription Shop located in Jacksonville, Fla.

Given the high volume of Coastline’s prescriptions, a second pharmacy known as Coastal RX Pharmacy also began filing Coastline’s prescriptions. The co-owner of Coastal RX Pharmacy, Amy G. Taylor, 42, of Jacksonville, also awaits sentencing after pleading guilty to an information charging Misprision of Felony. Specifically, Taylor agreed that she had knowledge of and concealed the unlawful conspiracy and did not report that knowledge to a lawful authority, in violation of federal law. This charge carries a statutory maximum sentence of three years in prison, along with substantial financial penalties and a one-year term of supervised release.

“Dispensing addictive prescription pain medication under the guise of a doctor’s care puts greed above an individual’s specific health needs and the trust of the community,” said Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Field Division. “Individuals like Weise and his associates who are involved in this ‘pill mill’ activity are nothing more than drug dealers who are licensed to wear white coats and fill prescriptions. Thanks to a concerted effort from our law enforcement partners, south Georgia and its surrounding communities are safer today.”

The case was investigated by the DEA and the Southern District of Georgia U.S. Attorney’s Office Investigator Charles Sikes and prosecuted for the United States by Assistant U.S. Attorneys Greg Gilluly, Mathew Josephson and Karl Knoche.

Topic(s): 

Drug Trafficking

Opioids

Prescription Drugs

Component(s): 

Drug Enforcement Administration (DEA)

Diversion Control Program (DEA)

USAO - Georgia, Southern

Contact: 

Barry L. Paschal, Public Affairs Officer: 912-652-4422

Press Release Number: 

12-22