A Florida pharmacy owner, his co-conspirators and seven related corporate entities recently were sentenced by a federal judge in Greenville Tenn. for their roles in a multimillion-dollar healthcare fraud scheme.
It was alleged that they deceived pharmacy benefit managers (PBMs) such as Express Scripts and CVS Caremark. The PBMs processed and approved thousands of claims for prescription drugs on behalf of insurance companies. They then defrauded the PBMs into authorizing millions of dollars worth of claims that private insurers, including Blue Cross Blue Shield of Tennessee, and as well as Medicaid and TRICARE, paid to pharmacies controlled by them.
Peter Bolos of Tampa was convicted in December of conspiracy to commit healthcare fraud, 22 counts of mail fraud and introduction of a misbranded drug into interstate commerce. He was sentenced on May 16 to 14 years in prison and ordered to forfeit $2.5 million.
Co-conspirators Michael Palso, Andrew Assad, Scott Roix, Larry Smith, Mihir Taneja, Arun Kapoor and Maikel Bolos, along with associated business entities, pleaded guilty to their roles in the conspiracy.
Also on May 16, Palso of Lutz, Fla. was sentenced to 33 months in prison. Bolos and Palso also were each ordered to pay nearly $25 million in restitution. On May 17, Smith of Tampa was sentenced to 42 months behind bars. The now-defunct corporate entities that he created, Alpha Omega Pharmacy, Germaine Pharmacy, Zoetic Pharmacy, ULD Wholesale LLC, and Tanith Enterprises, all were sentenced to pay nearly $25 million in restitution. The court also sentenced Taneja of Tampa to 10 months in prison and a $10,000 fine. On May 18, Kapoor of Temple Terrace, Fla. was sentenced to three years’ probation and ordered to pay a $10,000 fine. Sterling Knight, a now-defunct corporate entity that Kapoor and Taneja created, was sentenced to pay $21 million in restitution. On the same day, the court sentenced Maikel Bolos of Tampa to 15 months of imprisonment and a $25,000 fine. Assad, also of Tampa, was sentenced on May 19 to two years in prison and ordered to pay nearly $25 million in restitution. HealthRight was sentenced to pay $4.25 million in restitution.
On Oct. 12, 2018, the District Court for Eastern Tennessee unsealed a 32-count indictment against the men and their companies in what the government said was a $1 billion healthcare fraud scheme.
According to the indictment, the defendants set up an elaborate telemedicine scheme in which HealthRight fraudulently solicited insurance coverage information and prescriptions from consumers across the country for prescription pain creams, scar creams and vitamins. The indictment states that doctors approved the prescriptions without knowing that the defendants were massively marking up the prices of the invalidly prescribed drugs, which the defendants then billed to private insurance carriers.
To obtain the prescriptions, evidence presented at trial showed Roix used HealthRight’s telemarketing platform as a telemedicine service, calling consumers and deceiving them into agreeing to accept the drugs and to provide their personal insurance information. HealthRight then paid doctors to authorize the prescriptions through its telemedicine platform, even though the doctors never communicated directly with the patients and relied solely on the telemarketers’ screening process as the basis for their authorizations. Court documents and evidence at trial established that during the conspiracy, which lasted from May 2015 through April 2018, Bolos paid Roix more than $30 million to buy at least 60,000 invalid prescriptions generated by HealthRight.
The trial and plea agreements resulted from a multiyear investigation conducted by numerous state and federal agencies.
Telemedicine has served as a lifeline for many patients, particularly during the pandemic. But its surge in popularity also resulted in a significant increase in related fraud. It would benefit those involved in the telemedicine industry to have a strong compliance program in place. The federal government has made it clear it is targeting fraudulent and abusive telemedicine practices. The Health Law Offices of Anthony C. Vitale represents clients in matters relating to healthcare fraud and violations of the False Claims Act. For more information you can contact the firm at 305-358-4500 or send an email to [email protected].