Human Medications, Human Drugs, Animal Medications, Animal Drugs, Pharmacy law, Pharmaceutical law, Compounding law, Sterile and Non Sterile Compounding 797 Compliance, Veterinary law, Veterinary Compounding Law; Health Care; Awareness of all Types of Compounding Issues; Pharmacy Benefit Managers (PBMs), Outsourcing Facilities Food and Drug Administration and Compliance Issues
Thursday, May 5, 2022
Department of Justice
U.S. Attorney’s Office
Eastern District of Arkansas
FOR IMMEDIATE RELEASE
Wednesday, May 4, 2022
Ringleader of $10 Million TRICARE Scheme Sentenced
Defendant Paid Kickbacks to Recruiters and Medical Assistant
Defendant Paid Kickbacks to Recruiters and Medical Assistant
LITTLE ROCK—The organizer of a multi-million-dollar kickback conspiracy was sentenced today. Brad Duke, 47, of Little Rock was sentenced to 36 months’ imprisonment and ordered to forfeit $1,055,855.86 by United States District Judge Brian S. Miller.
Duke promoted prescription pain creams, scar creams, and supplements for a Mississippi-based compounding pharmacy, earning a share of whatever the pharmacy was paid for prescriptions issued by Duke’s affiliated doctors. After learning TRICARE, the national military’s health insurer, paid tens of thousands of dollars per month per patient for the compounded drugs he was promoting, Duke began to offer and pay kickbacks to generate prescriptions for those with TRICARE insurance.
Duke paid kickbacks to recruiters, including Michael “Chance” Beeman (52, of Maumelle), Michael Sean Brady (53, of Little Rock), Jason Greene (35, of Nashville, Tenn.), Brian Means (47, of Fort Smith), and Jennifer Sorenson (44, of McKinney, Tex.), to find TRICARE beneficiaries around the country willing to receive the drugs. Duke explained a doctor would sign off on the necessary prescriptions without ever consulting the patients. All Duke needed was TRICARE beneficiary insurance information sufficient to fill out prescription forms.
Upon receipt of beneficiary information from his recruiters, Duke routed prescriptions in the names of the TRICARE beneficiaries to local medical assistant Charlotte Leija (41, of Conway), to whom Duke paid kickbacks, usually $1,000 per prescription, to file the prescriptions under the name of the doctor for whom she worked.
Within a year, Duke’s scheme generated over $10 million in compound drug prescriptions for over 100 TRICARE beneficiaries hailing from as far west as Chula Vista, Calif., to as far east as Foxborough, Mass. No one ever consulted a prescriber. Duke paid his recruiters more than $2 million to supply the beneficiaries and over $250,000 to Leija to issue the prescriptions.
Judge Miller previously sentenced co-conspirators Brady, Beeman, Green, Means, Sorenson, and Leija to prison terms ranging from 8 months to 28 months and ordered them to forfeit illicit proceeds ranging from $198,799.00 to $598,435.99. As of today’s sentencing hearing, the U.S. Marshals had already seized $1,055,855.86 from Duke.
The investigation was conducted by the FBI and the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG), and the case was prosecuted by Assistant United States Attorney Alexander D. Morgan.
Wednesday, May 4, 2022
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| Breathe Easy Vapes, LP dba Breathe Easy Vapes | Center for Tobacco Products | Family Smoking Prevention and Tobacco Control Act/Adulterated/Misbranded |
| Madras Groceries | Division of West Coast Imports | Foreign Supplier Verification Program (FSVP) | ||||
| MYA International, Inc. | Office of Human and Animal Food Operations –West Division 5 | Unapproved New Drugs/Misbranded | ||||
| SCO Koladen LLC | West Coast Import District Compliance Branch - Team 2 (WCID-CB) | Foreign Supplier Verification Program (FSVP) | ||||
| Froggy’s Fog LLC | Office of Pharmaceutical Quality Operations, Division II | CGMP/Finished Pharmaceuticals/Adulterated/Misbranded | ||||
| C R Supplements, LLC | Office of Human and Animal Food Operations – West Division 6 | Unapproved New Drugs/Misbranded | ||||
| Rena's Organic | Office of Human and Animal Foods Division 4 East | Unapproved New Drugs/Misbranded/Cannabidiol (CBD) Products | ||||
| Best Fiji Kava, Inc. | Division of West Coast Imports | Foreign Supplier Verification Program (FSVP) | ||||
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| ATLRx, Inc. | Center for Drug Evaluation and Research | CDER | Unapproved New Drugs/Misbranded/Cannabidiol (CBD) Products | ||||
| BioMD Plus LLC | Center for Drug Evaluation and Research | CDER | Unapproved New Drugs/Misbranded/Cannabidiol (CBD) Products | ||||
| M Six Labs, Inc. | Center for Drug Evaluation and Research | CDER | Unapproved New Drugs/Misbranded/Cannabidiol (CBD) Products | ||||
| Lynda’s Legacy LLC d/b/a Chaney’s Tobacco Station | Center for Tobacco Products | Family Smoking Prevention and Tobacco Control Act/Adulterated/Misbranded | ||||
| Age Management Institute Santa Barbara | Division of Pharmaceutical Quality Operations IV | Compounding Pharmacy/Adulterated Drug Products | ||||
| Global Imports Inc. | Division of Southwest Imports | Foreign Supplier Verification Program (FSVP) | ||||
| Bhan Kanom Thai Inc | Division of West Coast Imports | Foreign Supplier Verification Program (FSVP) | ||||
| The W.S. Badger Company, Inc. | Division of Pharmaceutical Quality Operations I | CGMP/Finished Pharmaceuticals/Adulterated |
FDA Issues Warning Letters to Companies Illegally Selling CBD and Delta-8 THC Products
Today, the U.S. Food and Drug Administration issued warning letters to five companies for selling products labeled as containing delta-8 tetrahydrocannabinol (delta-8 THC) in ways that violate the Federal Food, Drug, and Cosmetic Act (FD&C Act). This action is the first time the FDA has issued warning letters for products containing delta-8 THC. Delta-8 THC has psychoactive and intoxicating effects and may be dangerous to consumers. The FDA has received reports of adverse events experienced by patients who have consumed these products.
There are no FDA-approved drugs containing delta-8 THC. Any delta-8 THC product claiming to diagnose, cure, mitigate, treat, or prevent diseases is considered an unapproved new drug. The FDA has not evaluated whether these unapproved drug products are effective for the uses manufacturers claim, what an appropriate dose might be, how they could interact with FDA-approved drugs or other products, or whether they have dangerous side effects or other safety concerns.
Delta-8 THC is one of over 100 cannabinoids produced in the Cannabis sativa L. plant but is not found naturally in significant amounts. Concentrated amounts of delta-8 THC are typically manufactured from hemp-derived cannabidiol (CBD) and have psychoactive and intoxicating effects. Products containing delta-8-THC are available in varying forms, including but not limited to candy, cookies, breakfast cereal, chocolate, gummies, vape cartridges (carts), dabs, shatter, smokable hemp sprayed with delta-8-THC extract, distillate, tinctures, and infused beverages.
The FDA recently published a consumer update expressing serious concerns about the potential health effects of delta-8 THC products. The FDA has received adverse event reports involving products containing delta-8 THC from consumers, healthcare practitioners, and law enforcement, some of which resulted in the need for hospitalization or emergency room treatment. The agency is also aware of an increasing number of exposure cases involving products containing delta-8 THC received by national poison control centers and alerts issued by state poison control centers describing safety concerns and adverse events with products containing delta-8 THC.
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