Mississippi Woman Pleads Guilty to Health Care Fraud, Money Laundering and Tax Evasion Charges for Role in $200 Million Compounding Pharmacy Scheme
A Hattiesburg, Mississippi woman pleaded guilty today for her role in a $200 million scheme to defraud health care benefit programs, including TRICARE, which is the program that covers U.S. military service members and their families.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division; U.S. Attorney Mike Hurst of the Southern District of Mississippi; Special Agent in Charge Christopher Freeze of the FBI’s Jackson, Mississippi Field Division; Special Agent in Charge Thomas J. Holloman III of IRS Criminal Investigation’s (IRS-CI) Atlanta Field Office and Special Agent in Charge John F. Khin of the Defense Criminal Investigative Service’s (DCIS) Southeast Field Office made the announcement.
Hope E. Thomley, 52, pleaded guilty before U.S. District Judge Keith Starrett of the Southern District of Mississippi to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering and tax evasion. She is scheduled to be sentenced by Judge Starrett on July 2. Thomley was charged in May 2018 in a 26-count indictment and had been scheduled to begin trial on March 19.
“Hope Thomley and her co-conspirators stole millions of dollars from a federal health care program that serves our nation’s brave military personnel and their families,” said Assistant Attorney General Benczkowski. “The Department of Justice and our law enforcement partners will continue to target unscrupulous medical professionals, business owners, and pharmacies that steal from our nation’s vital health care programs.”
“Today’s guilty plea in one of the largest health care fraud schemes in Mississippi history brings us one step closer to justice for our veterans, our military and the American taxpayers,” said U.S. Attorney Hurst. “I commend the hard work and dedication of our prosecutors, investigative agents and other law enforcement partners for pursuing this important case. We will not stop until all those who were involved in this despicable scheme have been brought to justice.”
“Hope Thomley was charged in a very complex scheme to launder criminally derived proceeds resulting from a fraud scheme against TRICARE,” said IRS-CI Special Agent in Charge Holloman. “Her efforts to conceal the source of her ill-gotten gains and evade taxes were the precise reason why IRS-CI’s involvement was so essential to unraveling the criminal conspiracies involved in this case. IRS special agents are uniquely equipped to decipher this type of criminal activity, and levy the appropriate charges to address the criminal conduct. As a result of the collaborative efforts of the investigative team, Hope Thomley agreed to accept responsibility for her actions and will now be held accountable for the breadth of her criminal conduct in this matter.”
“The Defense Criminal Investigative Service, with our investigative partners, will thoroughly investigate anyone who defrauds TRICARE, the Department of Defense health care program, and bring them to justice,” said DCIS Special Agent in Charge Khin. “The egregious corruption uncovered in this complex and expansive fraud scheme wasted and diverted millions of dollars in limited taxpayer funds that should have been spent on critical medical care for our military members and their families.”
At her plea hearing today, Thomley admitted her role in a scheme to defraud health care benefit programs, including TRICARE, by marketing medications known as compounded medications, which ordinarily are medications that are specially combined or formulated to meet the individual needs of patients. Thomley owned and operated the exclusive marketing agency for Advantage Pharmacy of Hattiesburg, and in that role, was responsible for obtaining prescriptions for which the pharmacy could obtain reimbursement from health care benefit programs. Thomley’s marketing company received nearly 50 percent of the reimbursements that Advantage Pharmacy obtained from the compounded medications. Thomley admitted that co-conspirators formulated Advantage Pharmacy’s compounded medications without regard to the individual needs of the patients, but instead with the goal of increasing reimbursements paid by health care benefit programs, and that she had contemporaneous knowledge of this. In order to further increase her profit, Thomley admittedly obtained prescribers’ signatures on blank prescription forms, and then filled out those forms with the names of her children and TRICARE beneficiaries that she and her husband recruited from the community to receive these medications. Thomley knew that Advantage Pharmacy would fill and submit claims for those falsified prescriptions to health care benefit programs, including TRICARE, she admitted.
Thomley also admitted her role in a money laundering and tax evasion scheme that she and other co-conspirators used to conceal the fraudulent proceeds and evade taxes. Through the scheme, Thomley evaded paying approximately $6.6 million in income taxes, she admitted. From approximately April 2012 through January 2016, health care benefit programs, including TRICARE, reimbursed Advantage Pharmacy and other pharmacies involved in the scheme at least $200 million.
The government seized more than $15 million in cash and other assets from Thomley, which will be forfeited in connection with her guilty plea.
Since 2017, nine other individuals involved in this scheme have pleaded guilty, and one was convicted at trial.
This case is being investigated by the FBI, IRS-CI and DCIS, among other agencies. Trial Attorneys Kate Payerle and Jared Hasten of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mary Helen Wall of the Southern District of Mississippi and Sean Welsh of the Western District of Virginia, formerly of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS), are prosecuting the case, with the support and assistance of Trial Attorney Amanda Wick of MLARS.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than 14 billion.