Six People Sentenced in $172,000,000 Insurance Fraud Scheme Court Ordered a Total of Over $130,000,000 in Restitution
Six defendants were recently sentenced to prison for their participation in a massive insurance fraud scheme that resulted in federal judicial orders for more than $130 million in restitution.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, Adolphus P. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Division, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Michael J. Satz, Broward State Attorney, announced the sentencing of six of sixteen defendants who were previously charged in a five-count criminal Information.
A criminal Information charged sixteen defendants for their participation in a complex fraud scheme regarding the manufacture and distribution of compounded medications. The fraud involved material misrepresentations to health insurance providers and illegal payments to coconspirators and medical professionals, including physicians. The fraud generated in excess of $172,000,000 in criminal proceeds for the members of the criminal enterprise.
All sixteen defendants have pled guilty for their participation in the fraudulent scheme. Most recently, six defendants were sentenced to prison by United States District Judge Daniel T. K. Hurley, for their roles in the insurance fraud. The six defendants received the following sentences: Rhett Gordon, 36 months’ imprisonment; Brett Nadel, 36 months’ imprisonment; Lisa Goldberg, 46 months’ imprisonment; Dr. John Johnson, 60 months’ imprisonment; Frederick Thomas Giampa, 30 months’ imprisonment and Timothy Clinton, 60 months’ imprisonment. In relation to the fraudulent scheme, the Court has ordered restitution totaling in excess of $130 million dollars. In addition, the defendants have forfeited over $30 million in assets.
According to the court record, the defendants participated in a two-year conspiracy, which they used various business entities, including Numed Care, LLC, Clinical Corp, LLC, RX of Boca, and American Custom Compound Pharmacy, to perpetrate a complex fraud on numerous health care insurance providers. The defendants prepared medications in bulk quantities, which they alleged to be compounded medications for specific individualized patient needs. The defendants falsely represented to the health insurance providers that these medications were prepared in limited quantities for individual patients and were exempt from FDA inspection.
The health insurance providers compensated the defendants for the alleged costs of the ingredients for such medications. The defendants concealed from the health insurance providers that the defendants paid illegal kickbacks to physicians for the issuance of the compounded medications. The defendants unlawfully provided the physicians with pre-printed prescription pads. In order to facilitate the fraudulent scheme, the defendants used mass-marketing techniques and call centers, which made material misrepresentations in order to solicit potential patients. defendants induced owners of failing pharmacies throughout the United States to participate in the scheme in order to perpetuate the fraud.
Mr. Greenberg commended the investigative efforts of the DEA, IRS-CI, and the Broward State Attorney’s Office in connection with the investigation of this matter. This case is being prosecuted by Assistant U.S. Attorneys Paul F. Schwartz and Jeffrey N. Kaplan.