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Wednesday, February 9, 2022
5 days ago — where medicinal drugs are compounded, dispensed, stored, or sold. 99 or where prescriptions are filled or dispensed on an outpatient.
4 hours ago — and potentially unnecessary compounded drugs. Navid Vahedi, 42, of Brentwood, and his pharmacy, Fusion Rx Compounding Pharmacy,.
5 days ago — Compounded drugs can play an important role when a patient's medical needs cannot be met by an FDA-approved drug. But they also bring risk because they are ...
Tuesday, February 8, 2022 Defendant admitted NECC created fraudulent prescriptions to avoid federal oversight
Department of Justice
U.S. Attorney’s Office
District of Massachusetts
FOR IMMEDIATE RELEASE
Tuesday, February 8, 2022
Defendant admitted NECC created fraudulent prescriptions to avoid federal oversight
BOSTON – The National Sales Director of the now-defunct New England Compounding Center (NECC) was sentenced today in federal court in Boston in connection with conspiring to defraud the Food and Drug Administration (FDA).
Robert A. Ronzio, 48, of North Providence, R.I., was sentenced by U.S. District Court Judge Richard G. Stearns to time served. In December 2016, Ronzio pleaded guilty to one count of conspiring to defraud the FDA. Ronzio cooperated with the government and testified at three trials of other NECC defendants.
NECC fraudulently held itself out as a pharmacy dispensing drugs pursuant to physician-created prescriptions when in fact it operated as a manufacturer distributing drugs in bulk. NECC created numerous work-around methods to make it appear to federal and state regulators that NECC was dispensing drugs pursuant to valid patient-specific prescriptions when in fact it was not.
Specifically, NECC sales representatives requested that customers (hospitals and clinics) send in a list of patient names with their orders but informed the customers that NECC would not label the drugs with the names of patients, thereby allowing the customers to use the drugs for any patients. NECC sales representatives requested customers send patient rosters or appointment schedules with their orders, from which NECC employees created patient-specific prescriptions that could be provided to federal or state regulators. Furthermore, NECC would not request patient names for first orders and often waived the requirement entirely for certain customers or drug orders. To determine the number of patient names required, the former owner of NECC and head pharmacist, Barry Cadden, created ratios of patient names to the number of drug units sought in an order. Ronzio admitted that the reason for these work-around methods was to maintain NECC’s status as a pharmacy and avoid heightened regulatory oversight of the FDA.
The NECC criminal case arose from the nationwide outbreak of fungal meningitis that was traced back to contaminated vials of preservative-free methylprednisolone acetate (MPA) manufactured by NECC. In 2012, 753 patients in 20 states were diagnosed with a fungal infection after receiving injections of MPA manufactured by NECC, and more than 100 patients died as a result. The outbreak was the largest public health crisis ever caused by a contaminated pharmaceutical drug.
In December 2014, following a two-year investigation, Ronzio and 13 other owners, employees, and associates of NECC were charged in a 131-count indictment. The indictment did not charge Ronzio with having any role in the drug manufacturing operations of NECC.
On July 7, 2021, Cadden was resentenced, following the government’s successful appeal of his original sentence, to 174 months in prison and ordered to pay forfeiture of $1.4 million and restitution of $82 million. On July 21, 2021, Chin was resentenced, following the government’s successful appeal of his original sentence, to 126 months in prison and three years of supervised release. Chin was also ordered to pay forfeiture of approximately $473,584 and restitution in the amount of $82 million.
United States Attorney Rachael S. Rollins; Acting FDA Commissioner Janet Woodcock, M.D.; Jeffrey Ebersole, Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations, New York Field Office; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Christopher Algieri, Special Agent in Charge of the Department of Veterans Affairs, Office of Inspector General, Northeast Field Office; Patrick Hegarty, Special Agent in Charge of the Defense Criminal Investigative Service, Northeast Field Office; and Ketty Larco-Ward, Inspector in Charge of the U.S. Postal Inspection Service’s Boston Division, made the announcement today. Assistant U.S. Attorney Amanda P.M. Strachan, Deputy Chief of Rollins’ Criminal Division, prosecuted the case.
Topic(s):
Health Care Fraud
Component(s):
USAO - Massachusetts
Department of Justice
U.S. Attorney’s Office
Central District of California
FOR IMMEDIATE RELEASE
Monday, February 7, 2022
West L.A. Compounding Pharmacy Owner Sentenced to 2½ Years in Federal Prison for Running $14 Million Health Care Fraud Scheme
LOS ANGELES – A West Los Angeles pharmacist was sentenced today to 30 months in federal prison for orchestrating a scheme that fraudulently obtained millions of dollars for compounded drugs in a scheme that paid illegal kickbacks for patient referrals and fraudulently paid patients’ copayments.
Navid Vahedi, 42, of Brentwood, was sentenced by United States District Judge Christina A. Snyder. Vahedi and his West Los Angeles-based company, Fusion Rx Compounding Pharmacy, pleaded guilty in February 2021 to one count of conspiracy to commit health care fraud and payment of illegal remunerations.
On January 18, Judge Snyder sentenced Fusion Rx Compounding Pharmacy to five years of probation. She has ordered Vahedi and his company to jointly pay $4,400,525 in restitution.
Fusion Rx was a provider of compounded drugs, which are tailor-made products doctors may prescribe when FDA-approved alternatives do not meet the health needs of patients. Vahedi, a licensed pharmacist, and Fusion Rx routed millions of dollars in kickback payments through the businesses of two marketers to steer prescriptions for compounded drugs to Fusion Rx.
As part of the scheme, Vahedi and the two marketers provided physicians with preprinted prescription script pads that offered “check-the-box” options on the form to maximize the amount of insurance reimbursement for the compounded drugs. From May 2014 to at least February 2016, Fusion Rx received approximately $14 million in reimbursements on its claims for compounded drug prescriptions.
As part of its contracts with various insurance networks, Fusion Rx was obligated to collect copayments from patients. Because the copayments might discourage patients from requesting expensive and potentially unnecessary compounded drug prescriptions, Fusion Rx did not collect copayments with any regularity and, in other instances, it provided gift cards to patients to offset the amount of the copayments, according to court documents.
After an audit raised concerns that Fusion Rx’s failure to collect copayments would be discovered, Vahedi directed Fusion Rx funds to be used to purchase American Express gift cards, which were then used to make copayments for certain prescriptions without the patients’ knowledge. Fusion Rx then submitted claims on these prescriptions to various insurance providers, falsely representing that patients had paid the required copayments.
“As a pharmacist offering compounded medications, [Vahedi] had a real opportunity to use his skills to help patients in need, individuals whose unique health challenges made it impossible for them to depend on the FDA-approved medications others rely on,” prosecutors wrote in a sentencing memorandum. “Instead, defendant converted his pharmacy into an assembly line for his own enrichment.”
The two marketers involved in the scheme – Joshua Pearson, 42, of St. George, Utah, and Joseph Kieffer, 41, of West Los Angeles – previously pleaded guilty in this case. Judge Snyder sentenced Kieffer to six months in federal prison and ordered him to pay $1.25 million in restitution. Pearson was sentenced to three years of probation.
The Defense Criminal Investigative Service, the FBI, the Amtrak Office of Inspector General, the Office of Personnel Management’s Office of Inspector General, and the Office of Inspector General for the United States Department of Health and Human Services investigated this matter.
Assistant United States Attorneys Alexander B. Schwab of the Major Frauds Section and Jonathan S. Galatzan of the Asset Forfeiture Section prosecuted this case.
Topic(s):
Health Care Fraud
Component(s):
Contact:
Ciaran McEvoy
Public Information Officer
United States Attorney’s Office
Central District of California (Los Angeles)
ciaran.mcevoy@usdoj.gov
(213) 894-4465
Press Release Number:
22-019
| Molino Enterprises One, Inc. | Division of Northeast Imports | Foreign Supplier Verification Program (FSVP) | ||||
| Applied Health Solutions, Inc. | Office of Human and Animal Food Operations - Division IV West | New Drug/Misbranded |
| Innoveix Pharmaceuticals Inc | Office of Pharmaceutical Quality Operations, Division II | Compounding Pharmacy/Adulterated Drug Products | ||||
| New Earth Healing Essentials, LLC d/b/a 5D Full Disclosure | Center for Drug Evaluation and Research | CDER | Unapproved New Drugs/Mis |
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