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Pharmacy owners, marketers and health care fraud

How pharmacies classify and pay their workers can cause questions and may lead to a federal investigation. A recent case provides an example.

Issue #1: One pharmacy or two?

The prosecution states the pharmacy owners claimed to have two separate pharmacy businesses. In reality, the government states these businesses were "separate in name only." They claim the businesses used the same staff, same marketers and same building. 

Issue #2: How did the pharmacy owners pay their marketers?

The government then takes issue with how the pharmacies paid their marketers. In addition to allegedly using the same marketers between the two businesses, the prosecution also claims the companies paid them differently based on whether or not they received a commission for federal or private prescriptions based on these referrals. The prosecution states that this move was done to disguise the illegal kickback payments.

Issue #3: How did the business classify the marketers?

The government also states the business owners attempted to hide their actions by inaccurately classifying their marketers. They state the pharmacy owners had used "sham 'W-2'" documents to make it appear as if the marketers were employees. Instead, according to the indictment the marketers were actually paid as 1099 contractors.

Issue #4: What kinds of criminal charges are possible?

In this case, the government was able to pursue multiple criminal charges against the pharmacy owners, including:

  • Conspiracy to defraud the United States and pay and receive kickbacks.
  • Paying and/or receiving kickbacks.
  • Conspiracy to commit money laundering.

The prosecutors claim the accused attempted to hide the payments from the government by purchasing property. The case is currently moving forward. We will provide updates as they become available.

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