Former Co-Owner and CEO of Pharmacy Pleads Guilty in Prescription Drug Billing Scheme
BIRMINGHAM, Ala. – Today an additional defendant pled guilty in a long-running investigation into a prescription drug-billing scheme involving a Haleyville, Ala.-based pharmacy, Northside Pharmacy doing business as Global Compounding Pharmacy. U.S. Attorney Jay E. Town, Federal Bureau of Investigation Special Agent in Charge Johnnie Sharp, Jr., U.S. Department of Health and Human Services, Office of Inspector General, Special Agent in Charge Derrick L. Jackson, Defense Criminal Investigative Service Special Agent in Charge Cynthia Bruce, United States Postal Inspector in Charge, Houston Division Adrian Gonzalez, and Internal Revenue Service-Criminal Investigation Acting Special Agent in Charge Andrew Thornton announced the guilty plea.
John Jeremy Adams, 39 of Panama City Beach, Florida entered a guilty plea before U.S. District Judge L. Scott Coogler to one count of conspiring to commit health care and mail fraud, 16 counts of health care fraud, one count of conspiring to pay kickbacks to a prescriber, and seven counts of spending the proceeds of health care fraud. According to the plea agreement, Adams stipulated to a 10-year sentence.
Adams is the former owner and chief executive officer of Northside Pharmacy doing business as Global Compounding Pharmacy. Mr. Adam’s guilty plea brings the total number of defendants who have pled guilty in the larger investigation to 23. Those who have previously pled guilty include two nurse practitioners, the COO, a vice president of sales, an operations manager, a district manager, and multiple sales representatives. Trial against the four remaining defendants is set for June 29, 2020:
“Our Office and partner agencies intend to investigate and prosecute all those who treat our health insurance plans as their personal piggy banks,” lead prosecutor Chinelo Diké-Minor said. “It may take time, but we intend to see that justice is done.”
“These defendants committed a reprehensible federal crime when they chose to steal funds designated to care for the sick,” United States Attorney Jay Town said. “Especially in this day and time where our health care system has the potential to be overwhelmed, we can ill afford to allow the wellness of many to be sacrificed by the greed of a few. I want to thank our partner agencies for their continued efforts to put a stop to health care fraud. We will continue to stand with them to not only uncover these frauds...but see them prosecuted in a federal courtroom.”
“It is sad to think that there are those who are so greedy they would steal from the sick,” FBI Special Agent in Charge Sharp said. “Today, Adam's has admitted to his greed and now, he along with his partners in crime, will be held accountable.”
“It’s more important than ever that we thoroughly investigate and bring to justice those who seek Federal health care programs as a way to line their own pockets,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “Together with our law enforcement partners we will continue to flush out the health care fraud.”
"I trust this sentence sends a message to those who would exploit government programs intended to help current and former military members and their families," DCIS Special Agent in Charge Cynthia Bruce said. "The DCIS, with our law enforcement partnerships, will dedicate all the time that is needed and resources available to bring these offenders to justice."
“In addition to undermining public health and safety, health care fraud cheats Americans out of more than eighty billion dollars a year in higher premiums and increased out-of-pocket expenses,” said Adrian Gonzalez, Postal Inspector in Charge, Houston Division. “The United States Postal Inspection Service is committed to investigations with our law enforcement partners whenever health care fraudsters try to involve the U.S. Mail in their nefarious schemes, as in this case against John Jeremy Adams, who was doing business as Global Compounding Pharmacy.”
According to the plea agreement, Mr. Adams participated in a scheme to cause the pharmacy he co-owned to bill for medically unnecessary prescription drugs. He paid prescribers to issue prescriptions and directed employees to get medically unnecessary drugs for themselves, family members, and friends, to alter prescriptions to add non-prescribed drugs, to automatically refill prescriptions regardless of patient need, to routinely waive and discount co-pays to induce patients to obtain and retain medically unnecessary drugs, and to bill for drugs without patients’ knowledge. According to the plea agreement, when prescription drug administrators attempted to police this conduct, the defendants evaded and obstructed those efforts, including by providing false information in response to audits and diverting their billing through affiliated pharmacies. The scheme targeted multiple health insurance plans, including the pharmacy’s Blue Cross Blue Shield of Alabama plan, as well as plans providing health insurance to the elderly, disabled, members of the military, and veterans—Medicare, TRICARE, and CHAMPVA, among others.
According to the plea agreement, Mr. Adams as directed the scheme and also joked about it. It describes a text exchange between him and another defendant in which they discuss altering prescriptions. She tells him she will be getting him white out as a birthday gift, and he responds “Yep. Made us money.”
The maximum punishment for the 18 U.S.C. § 1349 health care and mail fraud conspiracy charge is 20 years in prison and a $250,000 fine. The maximum penalty for health care fraud is 10 years in prison and a $250,000 fine. The maximum penalty for the 18 U.S.C. § 371 kickback conspiracy charge is 5 years in prison and a $250,000 fine. The maximum penalty for the 18 U.S.C. § 1957 spending statute charge is 10 years in prison and a $250,000 fine.
The FBI, HHS-OIG, DCIS, USPIS, IRS-CI, investigated the cases, which Assistant U.S. Attorneys Chinelo Dike-Minor, Don Long, and Edward Canter are prosecuting. The Veteran Affairs Office of Inspector General Criminal Investigations Division provided assistance in the investigation.