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Press Release

Former Co-Owner of Pharmacy Pleads Guilty in Prescription Drug Billing Scheme

For Immediate Release
U.S. Attorney's Office, Northern District of Alabama

BIRMINGHAM, Ala. – Today an additional defendant pleaded 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 Prim F. Escalona, 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 Special Agent in Charge James Dorsey announced the guilty plea. 

James A Mays, III, 44, of Winfield, Ala., entered a guilty plea before U.S. District Judge L. Scott Coogler to one count of conspiring to commit health care and mail fraud, twelve counts of health care fraud, and three counts of money laundering based on spending the proceeds of health care fraud. 

Between August 2013 and November 2014, Mays co-owned the operations of Global Medical Equipment and Supplies, Inc. (GMES). In October 2014, Mays became co-owner of Affiliate Pharmacy Strickland. After Jeremy Adams and Jeffrey Black purchased GMES and Northside Pharmacy in November 2014, Mays continued as a pharmacist at Global and directed pharmacy operations at Global and Affiliate Pharmacies.   May’s guilty plea brings the total number of defendants who have pleaded guilty in the larger investigation to 26.  Those who have previously pleaded guilty include two nurse practitioners, the CEO, the COO, a vice president of sales, an operations manager, multiple district managers, and multiple sales representatives.  The remaining defendants are set for trial on February 22, 2021:

  • Jessica Linton, 37 of Clearwater, Florida, the manager of the billing team at Global, charged in twenty-four counts;
  • John Gladden, 50, of Tallahassee, Florida, a district manager supervising sales representatives at Global, charged in nine counts.
    According to the plea agreement, between August 2013 and June 2016, Mays participated in a scheme to cause the pharmacy he worked at to bill for medically unnecessary prescription drugs.  He participated in a scheme to direct 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.
                                                                                                                                                                                                                                                                                                                                                     The maximum punishment for conspiracy to commit health care and mail fraud  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 spending the proceeds of health care fraud is 10 years in prison and a $250,000 fine. 
    The FBI, HHS-OIG, DCIS, USPIS, and IRS-CI investigated the cases.  Assistant U.S. Attorneys J.B. Ward, Edward Canter, and Don Long are prosecuting.  The Veteran Affairs Office of Inspector General Criminal Investigations Division provided assistance in the investigation.
Updated February 11, 2021

Health Care Fraud