Sixteen People Charged in $175,000,000 Insurance Fraud Scheme
Sixteen defendants have been charged in federal court with participating in a massive insurance fraud scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Adolphus P. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Office, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Michael J. Satz, Broward State Attorney, announced today the filing of a five-count Information.
A criminal Information charges 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 $175,000,000 in criminal proceeds for the members of the criminal enterprise.
The defendants are charged with varying offenses in the Information. Clifford Carroll, 36, of Boca Raton, FL, is charged with conspiracy to commit racketeering, in violation of Title 18, United States Code, Section 1962 (Count 1). Todd Stephens, 52, of West Palm Beach, FL, Tim Clinton, 30, of Delray Beach, FL, Joel McDermott, 41, of Boca Raton FL, Michael Kenna, 30, of Delray Beach, FL, Todd Hanson, 47, of Zephyr Cove, NV, and Lisa Goldberg, 51, of Fort Lauderdale, FL, are charged with conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h) (Count 2). Christopher Mucha, 30, of Davie, FL, Ian Flaster, 34, of Delray Beach, FL, Kyle O’Brien, 28, of Boca Raton, FL, Rhett Gordon, 43, of Boca Raton, FL, William Earl, 73, of Boca Raton, FL, Frederick Thomas Giampa, 52, of Sharon, MA, Dr. Peter Williams, 56, of New Port Richey, FL, Dr. John Johnson, 54, of Hollidaysburg, PA, and Dr. Brett Nadel, 48, of Roswell, GA, are charged with conspiracy to commit mail fraud and wire fraud, in violation of Title 18, United States Code, Section 371 (Count 3). Hanson is also charged with making a materially false statement to federal law enforcement, in violation of Title 18, United States Code, Section 1001 (Count 4). Carroll is also charged with subscribing to a false federal income tax return, in violation of Title 26, United States Code, Section 7206 (Count 5).
According to the Information filed today, the defendants participated in a two-year conspiracy, which used various business entities, including Numed Care, LLC, ClinicalCorp, LLC, RX of Boca, and a compounding pharmacy located in Dallas, Texas (hereinafter referred to as “the Texas Compounding Pharmacy”'), to perpetrate a complex fraud on numerous health care insurance providers. The defendants prepared medications in bulk quantities which were 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 exempted 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 made 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. The defendants induced owners of failing pharmacies throughout the United States in order to perpetuate the fraud.
If convicted, the defendants face a range of statutory penalties.Carroll faces a statutory maximum term of imprisonment of 23 years and a fine of up to $500,000. Hanson faces a statutory maximum term of imprisonment of 15 years and a fine of up to the greater of $500,000 or twice the amount of the criminally derived property.Stephens, Clinton, McDermott, Kenna, and Goldberg face a statutory maximum term of imprisonment of 10 years and a fine of up to the greater of $250,000 or twice the amount of the criminally derived property. Mucha, Flaster, O’Brien, Gordon, Earl, Giampa, Williams, Johnson, and Nadel face a statutory maximum term of imprisonment of 5 years and a fine of up to $250,000.
Mr. Ferrer commended the investigative efforts of the DEA, IRS-CI, and the Broward States Attorney’s Office in connection with the investigation of this matter. The case is being prosecuted by Assistant U.S. Attorneys Paul F. Schwartz and Jeffrey N. Kaplan.
An Information is only an accusation and a defendant is presumed innocent unless and until proven guilty.