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Press Release

Salt Lake County Man Charged In Schemes To Defraud Health Care Benefit Programs

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

SALT LAKE CITY – A Salt Lake County man, who managed and operated Eco Apothecary and Eco Pharmacy in South Jordan from early 2016 to Feb. 26, 2020, is facing federal criminal and civil cases related to an alleged scheme to defraud health care benefit programs.

James Vaughn Ammon aka James Vaughn Soto, age 56, is charged with four counts of health care fraud and one count of aggravated identity theft in the criminal case.  A grand jury returned a five-count indictment in late February.  According to the indictment, Eco Apothecary and Eco Pharmacy’s primary business was providing prescriptions to patients.  The indictment alleges that Ammon devised a scheme to defraud Medicare and Medicaid.

According to the indictment, the businesses were enrolled as pharmaceutical providers with Medicaid and Medicare. To receive reimbursement for a covered service, the businesses were required to submit a claim with the required information identifying the patient and services rendered.

The indictment alleges Ammon unlawfully enriched himself by, among other things, submitting and causing the submission of false claims to Medicare and Medicaid. In furtherance of the scheme, the indictment alleges Ammon filed claims for drugs that were not dispensed to patients, filed claims for larger quantities of drugs than were actually dispensed, filed claims for dispensing drugs even though he did not have a valid prescription from a physician, and fabricated and forged State of Utah pharmacy licensing documents.

Each count of health care fraud carries a potential maximum penalty of 10 years in prison and a fine of $250,000.  The potential penalty for aggravated identity theft is a two-year mandatory minimum sentence.  The court has issued a summons to Ammon to appear on the charges.

Indictments are not findings of guilt.  Individuals charged in an indictment are presumed innocent unless or until proven guilty in court.

A parallel civil action filed by the U.S. Attorney’s Office alleges Eco Pharmacy, Eco Apothecary and Ammon violated the Controlled Substances Act and the False Claims Act by filling and billing Medicare for prescriptions after Eco Apothecary lost its state-issued license; billing for medications, including controlled substances, for which there was not a proper prescription or authorization; billing for medications not dispensed and delivered to patients or billing for quantities larger than what were actually dispensed to patients; forging licensing documents from the State of Utah; and failing to keep proper records of controlled substances.

Many of the medications not delivered were important life-saving medications of elderly patients. One patient, a recent organ transplant recipient, did not receive scheduled anti-rejection medication. This patient was then unable to fill the prescription at another pharmacy because Medicare showed that it had paid for the medications.

According to the civil complaint, from 2018 through 2019, Eco Apothecary and Ammon caused Medicare Part D sponsors to pay at least $1,662,077 for prescriptions they dispensed.  During the same time period, Eco Pharmacy and Ammon caused Medicare to pay at least $1,895.264 for prescriptions they dispensed.  The civil complaint alleges Eco Apothecary and Ammon caused Medicare and Medicaid plan sponsors to pay at least $274,129 and Medicaid at least $11,013 for at least 2,576 prescriptions after it was no longer licensed by the State of Utah to operate as a pharmacy and dispense medication.  

The civil complaint seeks damages and injunctive relief against Ammon and the two businesses.  It asks the court to impose a civil penalty of $64,820 for each individual prescription that was filled in violation of the Controlled Substance Act and a civil penalty of $15,050 for each violation of the Controlled Substances Act’s record-keeping provisions.

As required by law, civil violations of the False Claims Act subject violators to treble damages.

The U.S. Attorney’s office is also seeking an order stopping the defendants and their employees or representatives from directly or indirectly distributing, dispensing, or processing with intent to distribute any controlled substances.   

Updated April 9, 2020

False Claims Act
Health Care Fraud