Pharmacy Owner Pleads Guilty to Health Care Fraud, Aggravated Identity Theft and Conspiracy to Misbrand Drugs
Baltimore, Maryland - Pamela Arrey, age 49, of Glenelg, Maryland, pleaded guilty today to health care fraud, aggravated identity theft, and conspiracy to misbrand pharmaceuticals, announced United States Attorney for the District of Maryland Rod J. Rosenstein.
According her guilty plea, Arrey, a licensed pharmacist, owned and operated two pharmacies trading as the Medicine Shoppe, on Liberty Road and Reisterstown Road in Baltimore. From January 2003 to July 2008, Arrey identified patients who had filled prescriptions at one of her two pharmacies and for whom the physician authorized refills that had never been requested. Arrey then claimed reimbursement from health care benefit programs, using patients’ personal identifying information, for “refills” of those prescriptions, which patients had never requested and for which no prescription drugs were ever dispensed to customers. Arrey’s pharmacies earned approximately $505,745 through this scheme. The proceeds of the scheme were deposited into her Medicine Shoppe Pharmacy bank account, which Arrey also used to pay the mortgage on her Glenelg home. Arrey’s plea agreement requires that she forfeit the home and make full restitution.
In addition, Arrey misbranded and relabeled prescription drugs she had purchased in large drums from a supplier who was not a licensed wholesaler, for resale in the pharmacy. Arrey admitted that, with the assistance of her employee, Rita Zamora, she filled prescription orders for pharmacy customers with misbranded pharmaceuticals, including Metformin, an oral diabetes medications used to help control blood sugar levels, and Gabapentin, an anti-epileptic medication used to treat seizures
Specifically, Arrey’s co-conspirator, Joseph Egbe, owned and operated e-Meditech, a charitable organization which requested and received drugs from other charitable organizations, including Catholic Medical Mission Board (“CMMB”), with the understanding that it would ship or transport the drugs to Africa for donation to the underprivileged. On June 18, 2008, Egbe sold Arrey two barrels containing Metformin, Gabapentin and Guaifenesin/Detromethorphan (a cough and cold remedy), that he received from CMMB. Arrey paid Egbe $2,450 for both barrels.
On July 7, 2008, the Board of Pharmacy conducted a surprise inspection of the Medicine Shoppe pharmacy on Liberty Road and recovered 11 drums of misbranded pharmaceuticals, which contained over 200,000 misbranded pills. On July 29, 2008 federal agents searched the pharmacies and Arrey’s home. From the pharmacies, agents recovered drugs with expiration dates removed and others with altered labels. From Arrey’s home agents seized more controlled substances, including Oxycodone, Fentanyl, Adderall and Kadian, all of which were expired.
“The Office of Inspector General of the Department of Health and Human Services will continue to aggressively investigate those who defraud the Medicare and Medicaid programs,” said Patrick Coar, Acting Special Agent in Charge for the region overseeing Maryland. “Together with our law enforcement partners we will bring justice to those who cheat at the public’s expense.”
Arrey faces a maximum sentence of 10 years in prison for health care fraud; a mandatory minimum of two years in prison consecutive to any other sentence for aggravated identity theft; and five years in prison for conspiracy to misbrand pharmaceuticals. U.S. District Judge Marvin J. Garbis has scheduled sentencing for March 8, 2010 at 9:30 a.m.
Rita Zamora, age 32, of Windsor Mill, Maryland, pleaded guilty to conspiracy to commit health care fraud and to misbrand pharmaceuticals and Joseph Egbe, age 44, of Gwynn Oak, Maryland, pleaded guilty to misbranding of pharmaceuticals. Egbe faces a maximum sentence of three years in prison at his sentencing, which is scheduled for January 4, 2010, at 9:30 a.m. Zamora faces a maximum penalty of five years in prison at her sentencing, which is scheduled for February 12, 2010, at 9:30 a.m.
United States Attorney Rod J. Rosenstein thanked the Department of Health and Human Services - Office of Inspector General and the Food and Drug Administration - Office of Criminal Investigations for their investigative work. Mr. Rosenstein commended Assistant United States Attorneys Sandra Wilkinson and Tonya Kelly Kowitz, who are prosecuting the case.