Thursday, April 27, 2023
Podiatrist And Patient Recruiter Convicted For $8.5M Compounding Fraud Scheme
A federal jury convicted two Texas men today for their role in a scheme to fraudulently bill TRICARE – the health care program for U.S. service members and their families – for compounded creams that were medically unnecessary and procured through kickbacks and bribes.
Action Details
- Date:April 14, 2023
- Agency:U.S. Department of Justice
- Enforcement Types:
- Criminal and Civil Actions
Nine Defendants (8 from Texas; 1 from Nevada) Sentenced in $126M Compounding Fraud Scheme
Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Friday, April 14, 2023
Nine Defendants Sentenced in $126M Compounding Fraud Scheme
Nine defendants – including three compounding pharmacy owners, a physician, two pharmacists, and three patient recruiters – were sentenced yesterday for their respective roles in a years-long, multi-state scheme to defraud the Department of Labor’s Office of Workers’ Compensation Programs (OWCP) and TRICARE, the health care program for U.S. service members and their families.
The sentences include:
- John Cruise, 52, of Houston, a former co-owner of Assurance Consolidated Pharmacy (ACP), a pharmacy located in Spring, Texas, as well as an owner of the Injured Federal Workers Advocate Association (IFWAA), an organization that purported to assist injured federal workers, was sentenced to 20 years in prison.
- LaShonia Johnson, 50, of Houston, a former co-owner of ACP with her husband and co-defendant Cruise, and director at IFWAA, was sentenced to 15 years in prison.
- Kenny Ozoude, 48, of Houston, former owner of Compounding Solutions LLC, a Houston-based pharmacy, was sentenced to 10 years in prison.
- James Don Jackson, 63, of Tyler, Texas, a medical doctor licensed in Texas, was sentenced to five years in prison.
- Nirvana Hightower, 56, of Houston, a pharmacist licensed in Texas and pharmacist-in-charge at Compounding Solutions LLC, was sentenced to five years in prison.
- Keith Hudson, 55, of Humble, Texas, a pharmacist licensed in Texas and pharmacist-in-charge at ACP, was sentenced to 3 years in prison.
- Audra Jones, 46, of Houston, was sentenced to two years and six months in prison.
- Terrance Aice, 50, of Carrollton, Texas, a patient recruiter, was sentenced to one year and six months in prison.
- Sherod Johnson, 44, of Las Vegas, a patient recruiter, was sentenced to one year and six months in prison.
The defendants submitted false and fraudulent claims to the OWCP and TRICARE for prescriptions for compounded and other drugs prescribed to injured federal workers and members of the armed forces. The defendants also paid kickbacks to patient recruiters and physicians to prescribe these drugs. The defendants chose the particular compounds and other drugs based not on the patients’ medical needs but in light of the amount of reimbursement for the drugs. The drugs were then mailed to patients, even though the patients often never requested, wanted, or needed them.
Four additional defendants (Dr. Jay Bender, Dr. Deepak Chavda, Donathan Kemp, and Naresh Jivanji) are scheduled to be sentenced on May 25.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas, Special Agent in Charge Jonathan Ulrich of the U.S. Postal Service Office of Inspector General (USPS-OIG), Special Agent in Charge Steve Grell of the Department of Labor Office of Inspector General (DOL-OIG), Special Agent in Charge Michael Mentavlos of the Department of Defense Office of Inspector General (DOD-OIG), and Special Agent in Charge Kris Raper of the Department of Veteran’s Affairs Office of Inspector General (DVAO-OIG) South Central Field Office made the announcement.
The USPS-OIG, DOD-OIG, and DOL-OIG investigated the case with assistance from the DVAO-OIG.
Trial Attorneys Catherine Wagner and Patrick J. Queenan of the Criminal Division’s Fraud Section prosecuted the case. Assistant Chief Scott Armstrong, Assistant Chief John “Fritz” Scanlon, Trial Attorney Michael McCarthy, and former Trial Attorneys Jay McCormack and Sarah Edwards of the Fraud Section previously prosecuted the case.
Department of Justice News: NYC Mother and Son Charged with Interstate Shipment of Misbranded Animal Drugs
Department of Justice News: NYC Mother and Son Charged with Interstate Shipment of Misbranded Animal Drugs
PHILADELPHIA – United States Jacqueline C. Romero announced that Bien King, 70, of Congers, NY and Khalil King, 36, of New York, NY were charged by indictment with conspiracy, distribution of unregistered and misbranded pesticides, and interstate shipment of misbranded animal drugs.
The indictment alleges that Bien King and her son, Khalil King, jointly operated a business called “Little City Dogs,” based in New York City. The defendants purchased unapproved animal drugs and pesticides, including ivermectin, nitenpyram, praziquantel, and fipronil, from various Chinese suppliers. The defendants’ Chinese suppliers routinely mislabeled the shipments to avoid inspection by United States Customs and Border Protection inspectors. According to the indictment, once the defendants received the shipments from China, they used various locations, including a Manhattan office, to mix and repackage these drugs and pesticides for resale to customers throughout the United States. According to the indictment, the defendants’ company received over $4,000,000 from the sale of these misbranded, unregistered, and unapproved pesticides and animal drugs.
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| Belmar Pharma Solutions, Drug Depot, LLC., dba APS Pharmacy | Division of Pharmaceutical Quality Operations II | Compounding Pharmacy/Adulterated Drug Products | ||||
| ByPro Nutrition LLC | Division of Human and Animal Food Operations West II | Unapproved New Drugs/Misbranded | ||||
| SCS Direct, Inc. | Center for Food Safety and Applied Nutrition (CFSAN) | Dietary Supplement/Adulterated | ||||
| Zermat International S.A. de C.V. | Center for Drug Evaluation and Research | CDER | CGMP/Finished Pharmaceuticals/Adulterated | ||||
| La Aldea Distributors Inc | Division of Southwest Imports | Foreign Supplier Verification Program (FSVP) | ||||
| Chemical Services Group, Inc./Royal Chemical Company | Division of Pharmaceutical Quality Operations I | CGMP/Finished Pharmaceuticals/Adulterated |
| Abbott Point of Care Canada Limited | Center for Devices and Radiological Health | Investigational Device Exemptions (IDE)/Premarket Approval Application (PMA) Adulterated Device | ||||
| North American Diagnostics, LLC | Center for Devices and Radiological Health | Medical Device/Adulterated/Misbranded/Lacks PMA and/or 510(k) | ||||
| Biloxi Freezing & Processing, Inc. | Division of Human and Animal Food Operations East V | Seafood HACCP/CGMP for Foods/Adulterated/Insanitary Conditions | ||||
| Eco Lips, Inc. | Division of Pharmaceutical Quality Operations III | CGMP/Finished Pharmaceuticals/Adulterated |
| Posted Date | Letter Issue Date | Company Name | Issuing Office | Subject | Response Letter |
|---|---|---|---|---|---|
| Hot Grabba LLC d/b/a Buttas Hot Grabba | Center for Tobacco Products | Family Smoking Prevention and Tobacco Control Act/Adulterated/Misbranded | |||
| Accra-Pac, Inc. dba Voyant Beauty | Division of Pharmaceutical Quality Operations III | CGMP/Finished Pharmaceuticals/Adulterated | |||
| Spartan Enterprises Inc. dba Watershed Wellness Center | Division of Human and Animal Food Operations East VI | Unapproved New Drugs/Misbranded | |||
| Pop Daddy Popcorn, LLC | Division of Human and Animal Food Operations East VI | CGMP/Food/Prepared, Packed or Held Under Insanitary Conditions/Adulterated | |||
| Pharmaplast S.A.E. | Center for Drug Evaluation and Research | CDER | CGMP/Finished Pharmaceuticals/Adulterated | |||
| Five Star Trading IL, Inc. | Division of Northern Border Imports | Foreign Supplier Verification Program (FSVP) | |||
| Medivance Instruments Ltd. | Center for Devices and Radiological Health | Medical Device/Adulterated/Misbranded/Lacks PMA and/or 510(k) | |||
| Nose Slap LLC | Center for Drug Evaluation and Research | CDER | Unapproved New Drugs/Misbranded | |||
| Medolife Rx D/B/A MedoLife Corp., AELIA, Inc. and Quanta Inc. | Center for Drug Evaluation and Research | CDER | Unapproved New Drugs/Misbranded | |||
| FuZion Vapor LLC | Center for Tobacco Products | Family Smoking Prevention and Tobacco Control Act/Adulterated/Misbranded |
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