Four Defendants Indicted for Securities Fraud, Conducting International Pump-and-Dump Scheme, and Money Laundering
Assistant U. S. Attorney Mark W. Pletcher (619) 546-9714
NEWS RELEASE SUMMARY – July 23, 2019
SAN DIEGO – Former U.S. Marine Bradley White pleaded guilty in federal court today to fraud charges, admitting that he participated in a scheme that bilked the military health care program known as TRICARE out of more than $65 million.
White, the sixth of eight defendants to plead guilty in the case so far, admitted as part of his guilty plea that he fraudulently recruited patients in return for a percentage of the amount TRICARE reimbursed for compounded medications that his sham patients ordered.
White was charged on June 20, 2019, and entered his guilty plea to conspiracy to commit health care fraud before U.S. Magistrate Judge Bernard G. Skomal. Sentencing is set for October 18, 2019 before U.S. District Judge Janis L. Sammartino.
Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient requires a particular dosage or application or is allergic to a dye or other ingredient.
According to the guilty plea, a team of individuals, including White, worked to recruit and pay Marines, primarily from the San Diego area, and their dependents – all TRICARE beneficiaries – to obtain compounded medications that would be paid for by TRICARE. This information was sent to Choice MD, the Tennessee medical clinic that employed Drs. Carl Lindblad and Suzy Vergot. Drs. Lindblad and Vergot then wrote prescriptions for the TRICARE beneficiaries, despite never examining the patients in person. Once signed by the doctors, these prescriptions were not given to the beneficiaries, but sent directly to particular pharmacies controlled by co-conspirators, which filled the prescriptions and billed TRICARE at exorbitant prices. TRICARE then reimbursed the pharmacy, and which in turn paid kickbacks – as a percentage of the TRICARE reimbursement -- to the pyramid scheme of recruiters.
Both Dr. Lindblad and Dr. Vergot as well as Candace Craven, a nurse practitioner at Choice MD, have pleaded guilty for their roles in the conspiracy to commit health care fraud. CFK, Inc., the corporate owner of one of the pharmacies, has also pleaded guilty as part of this investigation.
Josh Morgan, another former Marine from San Diego, also pleaded guilty in March 2018 for his role in recruiting TRICARE beneficiaries to fraudulently receive these prescriptions.
According to court documents, between December 2014 and May 9, 2015 – the day that TRICARE stopped reimbursing for compounded medications – Drs. Lindblad and Vergot authorized 4,442 total prescriptions. Over this time, their co-conspirators billed TRICARE $65,679,512 for these prescriptions. For his part, White admitted that he recruited patients who billed TRICARE over $7.6 million, for which he was paid over $195,000.
White was the eighth defendant charged in relation to this fraud scheme and the sixth to plead guilty. The two remaining defendants are Jimmy and Ashley Collins, owners of Choice MD. That case, 18CR0432-JLS, is still pending.
DEFENDANT Case Number 19-CR-2318-JLS
Bradley White Age: 31 Oakley, CA
SUMMARY OF CHARGES
Conspiracy to Commit Health Care Fraud – Title 18, U.S.C § 1349
Maximum penalty: Ten years in prison and $250,000 fine or double loss amount
Defense Criminal Investigative Service
Naval Criminal Investigative Service
IRS Criminal Investigation Division, Gulfport, MS
Federal Bureau of Investigation - Jackson, MS Field Office