The FBI released the below information:
A group of Florida scammers who set up
pharmacies to bilk the government and insurance companies ended up writing
themselves a prescription for prison time.
The eight men owned
and/or operated several pharmacies and related businesses—known by names such
as A to Z Pharmacy and Havana Pharmacy—whose sole purpose was to help these
criminals line their own pockets. Initially, the men bribed medical providers
to write unnecessary prescriptions for compounded drugs like pain or scar
creams, then billed the patients’ insurance companies large sums for the drugs.
And in the making of the prescriptions, they often used unusual ingredients,
such as horse tranquilizers, that were not medically necessary for the
particular patients.
A
compounding pharmacy creates tailored drugs for individual patients who cannot
be treated with traditional drugs due to allergies or other special needs. The Food and Drug Administration does not approve compounded drugs. While
investigators found no evidence that any of the patients who received
compounded drugs in this case suffered any dangerous side effects from them,
the FDA warns that unnecessary use of compounded drugs can pose risks for
patients.
As the scam evolved,
the conspirators bought lists of information on patients with generous private
insurance, Medicare, or TRICARE. They then sent their creams and other drugs to
those patients with or without the patients’ knowledge or consent and without
consulting their physicians.
“The main thing is
there was never any patient necessity here,” said Special Agent Kurt McKenzie,
who worked the case out of the FBI’s Miami Division. “The patients never asked
for it; they didn’t need it. In many cases, the patients would send the creams
back and say ‘I never asked for this.’”
The scheme went on for
about four years, with the participants using various tactics to avoid
detection, including purchasing additional pharmacies to use once an insurance
company stopped paying for prescriptions at ones they were already using. The
profits were significant—more than $100 million. Nicholas Borgesano, Jr., one
of the ringleaders, made an estimated $80 million of that himself. Yet thanks
to the investigative work of the FBI, the Department of Health and Human
Services’ Office of Inspector General, and the Defense Criminal Investigative
Service, the fraudsters were discovered and brought to justice. Traditional
investigative techniques like following a complex money trail helped bring down
the fraud ring.
All eight men involved
in the scheme pleaded guilty to conspiracy to commit health care fraud. In
April, Borgesano was sentenced to 15 years in prison. His seven co-conspirators
have been sentenced to between one and six years.
“Every paycheck you earn, there is money
coming out to fund Medicare and your own health insurance, and the American
people are losing cents on the dollar to these fraudsters,” McKenzie said.
“They are just reaching out and taking it, so it’s important for the FBI and
our partners to target and stop this activity.”
Borgesano used his millions to
buy 16 properties and numerous boats and high-end vehicles that were forfeited
as part of his plea. The victims—the insurance plan sponsors and the
government—will be able to recoup a small amount of their losses through the asset forfeiture process.
“We can’t let the bad guys keep
their ill-gotten gains,” said Special Agent Rolf Gjertsen of the FBI’s Tampa
Division, who also worked the case. “It’s probably a drop in the bucket
compared to what they lost, but it’s important for the public to know we use
the asset forfeiture process to try to make victims whole to the extent we
can.”
Special Agent Jennifer McGrath,
who also worked on the investigative team out of the Miami Division, said the
crime was certainly not a victimless one, in particular for military families.
“TRICARE is the primary insurer
for military families,” McGrath explained. “They stole $100 million from
TRICARE and other insurers and used it to buy boats and fancy cars. It’s taking
that money away from military families and others who use the victim insurance
providers.”
McGrath said anyone who suspects
insurance fraud—such as unexpectedly receiving medications or equipment not
prescribed by your doctor or not being charged a normally required
co-payment—should report it to their insurance provider’s fraud prevention
department.
