Florida Man Charged with Conspiring to Pay Kickbacks and Commit Health Care Fraud in $64 Million Scheme
NEWARK, N.J. – A Florida man was charged for his role in conspiracies to pay illegal kickbacks and to commit health care fraud that caused at least $64 million in losses to federal health care benefit programs, Attorney for the United States Vikas Khanna announced today.
James D. Feeley, 45, of Navarre, Florida, is charged by complaint with one count of conspiracy to violate the federal Anti-Kickback Statute and one count of conspiracy to commit health care fraud. Feeley made his initial appearance before U.S. Magistrate Judge Wettre in Newark federal court and was ordered released on $400,000 unsecured bond.
According to documents filed in this case and statements made in court:
Feeley and his business partner owned and operated medical marketing companies in Ohio that paid for prescriptions from telemedicine companies, which were then sent to pharmacies, including Apogee Bio-Pharm LLC in Edison, New Jersey. From January 2016 to September 2020, Feeley and others worked with pharmacies, telemedicine companies, and doctors to unlawfully profit by paying kickbacks and bribes to telemedicine companies to generate prescriptions for their pharmacy clients to fill. The telemedicine companies, in turn, paid kickbacks and bribes to doctors so that they would sign high volumes of expensive prescriptions. The pharmacies then paid kickbacks and bribes to Feeley and his businesses for each referral. The kickback payments paid to Feeley’s businesses were a percentage of the reimbursements the pharmacies received from health care programs for filling the prescriptions generated by Feeley’s businesses.
Feeley arranged to purchase federal health care beneficiary information (also referred to as “leads”), which usually included beneficiaries’ personal and health insurance information, from various sources, including overseas call centers and data brokers. Feeley and others used this information to identify their targets for cold calling. Feeley and others targeted beneficiaries because they had insurance that would reimburse for expensive medications regardless of whether the beneficiaries had medical need for those products.
Feeley and others employed “sales representatives,” frequently high school students with no medical licenses or training, to call the beneficiaries. Feeley’s company often deceived beneficiaries into accepting medications by providing false and misleading information to the beneficiaries about the nature, cost, and efficacy of the medications they would receive.
Feeley and others knew that the prescriptions were not generated by genuine doctor-patient relationships because they knew the doctors were paid to generate prescriptions and often did not have any contact with beneficiaries. Feeley and his conspirators knew the prescriptions they arranged were false and fraudulent. Among other things, they complained to telemedicine companies when doctors did not approve prescription requests based on lack of medical necessity.
The health care fraud conspiracy count is punishable by a maximum of 10 years in prison and the kickback conspiracy count is punishable by a maximum of five years in prison
Attorney for the United States Khanna credited special agents of the Department of Defense, Office of Inspector General (DOD-OIG), Defense Criminal Investigative Service, Northeast Field Office, under the direction of Special Agent in Charge Patrick J. Hegarty; U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) under the direction of Acting Special Agent in Charge Susan Frisco; and the FBI’s Newark Field Office under the direction of Special Agent in Charge James E. Dennehy, with the investigation.
The government is represented by Assistant U.S. Attorneys Nicole F. Mastropieri and Hayden M. Brockett of the Health Care Fraud Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.