Doctor, nurse indicted for fraudulent schemes involving unnecessary compounded medications

Separate indictments brought against a nurse practitioner and doctor by the Department of Justice (DOJ) alleged that the two individuals participated in separate but similar schemes to defraud TRICARE. Under the schemes, the nurse practitioner and doctor prescribed medically unnecessary compounded medications to individuals they had not examined, had a compounding pharmacy dispense the medications, and seek reimbursement from TRICARE.

The indictment against the nurse practitioner

According to the indictment, TRICARE reimbursed the compounding pharmacy more than $3.3 million for compounded medications prescribed by the nurse practitioner between February 2013 and October 2016, In addition, the nurse practitioner allegedly received more than $50,000 in kickback payments from a marketer for the compounding pharmacy in return for prescribing the compounded medications and making false statements to the FBI. The nurse practitioner was charged with conspiracy to commit health care fraud and wire fraud; wire fraud; conspiracy to distribute and dispense a controlled substance; distributing and dispensing of a controlled substance; conspiracy to solicit and receive health care kickbacks; soliciting and receiving health care kickbacks; and making false statements.

The indictment against the doctor

The indictment against the doctor stated that TRICARE reimbursed the compounding pharmacy more than $2.3 million for compounded medications prescribed by the doctor between October 2014 and December 2015. In response to an audit conducted by TRICARE, the doctor allegedly submitted falsified patient records to make it appear as though he had examined patients before prescribing the compounding medications. He was charged with conspiracy to commit health care fraud and wire fraud, wire fraud, conspiracy to distribute and dispense a controlled substance, distributing and dispensing a controlled substance, conspiracy to falsify records in a federal investigation and falsification of records in a federal investigation.

Feds snare 16 hospice providers in $60M Medicare fraud scheme

Sixteen individuals were charged with offenses related to a health care fraud scheme in a federal court in Texas. The scheme alleges that from July 2012 to September 2016, Novus Health Services, owned and operated by the 16 individuals, billed Medicare and Medicaid more than $60 million for fraudulent hospice services, of which more than $35 million was paid to Novus. The individuals submitted false claims for hospice services and continuous care hospice services, recruited ineligible hospice beneficiaries via kickbacks to physicians and health care facilities, and falsified and destroyed documents to conceal these activities. The grand jury indictment was the result of an investigation into Novus by the Federal Bureau of Investigation, HHS Office of Inspector General (OIG), and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU).


Novus and Optim Health Services, Inc. were operated and co-owned by one of the individuals, a certified public accountant without any medical licenses. Licensed physicians who were paid Novus medical directors provided little to no oversight of Novus’s hospice patients. Some of the indicted individuals were not physicians and they would determine whether a beneficiary would be certified for, recertified for, or discharged from hospice; whether they would be placed on continuous care; and how and to what extent they would be medicated with drugs. These decisions on medical care were often driven by financial interest rather than patient need.

The scheme also involved directing that beneficiaries be placed on continuous care, whether the beneficiaries needed the service or not, and often without any consultation with a physician. Continuous care physician’s orders were falsified and uploaded into Novus’s electronic medical records database. When a beneficiary was on continuous care, the Novus nurses would unnecessarily administer high doses of Schedule II controlled medications such as morphine or hydromorphone. The Schedule II medications were obtained with prescription forms unlawfully pre-signed by medical directors. The investigators found instances when these excessive dosages resulted in serious bodily injury or death to the beneficiaries.

If convicted, each count of conspiracy to commit health care fraud and substantive health care fraud count carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine.

Nursing home executives indicted in $16M fraud scheme

Four individuals, including the former Chief Executive Officer (CEO) and Chief Operating Officer (COO) of a nursing home chain, have been indicted for their roles in a $16 million fraud scheme. The alleged scheme involved American Senior Communities (ASC), located in Indiana.


According to the 32-count indictment, the perpetrators made side deals with vendors at the expense of ASC between 2009 and 2015. To fund these deals, they overcharged ASC for products and services, and then funneled the overcharges through shell companies and back to themselves. Almost all products and services are paid for by Medicare and Medicaid reimbursements.

According to the indictment, the scheme spanned services from landscaping and pharmacy to food supplies, therapies, and decorations. If vendors questioned the overcharges and kickbacks, they were turned down. The funds were allegedly used by the four perpetrators for several personal purposes, including paying real estate, jewelry, and gold bars, as well as making political contributions.

Former CEO indicted for $100M fraud that collapsed Puerto Rico bank

The former CEO of now-defunct Inyx Inc., was charged with eight counts of wire fraud in connection to a $100 million pharmaceutical fraud scheme. The indictment was filed on August 4, 2016, in the Southern District of Florida, and the former CEO was arrested and made his initial appearance Friday, September 30, 2016. The fraud scheme is alleged to have led to the collapse of Westernbank Peurto Rico (Westernbank).


During the former CEO’s tenure, which lasted 2005 to 2007, he and other conspirators provided a security interest in Inyx’s assets, as well as its subsidiaries’ assets, in order to receive loans and lines of credit. To facilitate these loans, the former CEO allegedly submitted false and fraudulent invoices as collateral and made false representations about intended loan repayments and the value of the assets pledged as collateral. The government also alleges that he misappropriated $25 million in company funds to his personal accounts and $9.6 million to an associate’s account.

Inyx was previously traded on the Nasdaq Over-the-Counter Bulletin Board. In 2007, the company filed for bankruptcy.