The United States Attorney’s office recently announced a 50-count indictment charging seven people with health care fraud, wire fraud and other crimes. The charges are the result of alleged abuse of specialty medication prescriptions for compounded medications. One of the charged is a pharmaceutical representative.
According to the indictment, the pharmaceutical representative, along with the six other individuals facing criminal charges, encouraged individuals to receive expensive and allegedly unnecessary compounded medications. A pharmacist would then mix these medications to meet the specific medical needs of each patient. Examples included creams to treat pain, scars and fungus infections. The indictment also claims the group focused on public employees like teachers, police officers, firefighters and state troopers as their insurance plans covered these medications. They would then bill the insurance provider for the allegedly unnecessary medications.
The potential penalties are serious. The accused faced up to 20 years of prison for each health care fraud and wire fraud conspiracy charge a well as a $250,000 fine. The wire fraud charge comes with another 20 years and $250,000 and the money laundering conspiracy charge comes with 10 years and $250,000.
Initially, the pharmaceutical rep chose to plead not guilty to the charges. Recently, he changed his plea to guilty for 2 of the 50 criminal charges. The prosecution was likely able to encourage the change by dropping other charges, including the charges against his wife. He has agreed to a full restitution payment of a minimum of $53 million as well as forfeiture of property including over $26 million in assets, investment accounts and real estate. This provides an example of the negotiations that may take place when going through these types of allegations.