Tampa Man Agrees To Pay U.S. Government $2 Million For His Role In Medical Kickback Scheme

Tampa, FL - United States Attorney Roger B. Handberg announces that Mihir Taneja has agreed to pay the United States $2 million to resolve allegations that he violated the False Claims Act by causing the submission of claims for compounded medicated pain and scar creams related to prescriptions tainted by a kickback arrangement.

The conduct covered by the settlement agreement relates to allegations that Taneja conspired with Larry Smith, the owner of Z Stat Medical, LLC d/b/a Oldsmar Pharmacy, to enter into a kickback arrangement with a marketing company, Centurion Compounding, Inc., which led to millions of dollars in TRICARE reimbursement for compound prescriptions. Specifically, the settlement resolves allegations that Taneja and Smith negotiated an arrangement with Centurion that paid Centurion a percentage of profits from TRICARE claims it referred to Oldsmar Pharmacy. As a result, from November 2014 to February 2015, Oldsmar Pharmacy submitted thousands of claims for reimbursement to TRICARE for compounded drugs that were tainted by kickbacks and, therefore, were false.

The actions of Taneja and his co-conspirator played out against a larger trend of fraud against TRICARE involving compounded prescriptions. TRICARE’s costs for compounded drugs skyrocketed during this period, rising from $5 million in 2004 to $514 million in 2014, before reaching a high-water mark of $1.75 billion in fiscal year 2015. To date, the U.S. Attorney’s Office for the Middle District of Florida has diligently pursued fraud associated with compounding pharmacy claims, resulting in over $60 million in recoveries.

“Kickback arrangements threaten the quality-of-care patients receive and undermine the integrity of our healthcare system,” said U.S. Attorney Roger B. Handberg. “My office will aggressively investigate and hold accountable those who seek to profit from such illegal arrangements.”

“The Defense Criminal Investigative Service is committed to safeguarding the integrity of the TRICARE program, the healthcare system for military members and their families,” said Special Agent-in-Charge Jason J. Sargenski, Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), Southeast Field Office. “I applaud the hard work of our agents and the United States Attorney’s Offices that led to today’s settlement.”

The lawsuit was filed under the False Claims Act, which makes a person liable to the United States if he presents, or causes another to present, false or fraudulent claims for payments. The Anti-Kickback Statute prohibits anyone from offering or paying remuneration in order to induce or reward referrals for services paid for under federal healthcare systems.

The case is captioned United States v. Mihir Taneja, Case No. 8:21-cv-102. The claims asserted by the government are allegations only, and there has been no determination of liability. The United States previously filed suit against Smith and Oldsmar Pharmacy arising out of the same conduct. That case was captioned U.S. ex rel. Silva, et al. v. Z Stat Medical, LLC, et al., No. 8:15-cv-00444-T-33TGW (M.D. Fla.). Smith previously agreed separately to pay $600,000, based on his ability to pay, for this as well as other conduct. In addition, Oldsmar Pharmacy returned over $19 million to TRICARE after law enforcement discovered the scheme.

The case is being handled by Assistant U.S. Attorneys Michael R. Kenneth and Charles T. Harden of the U.S. Attorney’s Office for the Middle District of Florida, with assistance of the Department of Defense - Office of Inspector General.