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Justice News

Department of Justice
U.S. Attorney’s Office
Western District of Michigan

FOR IMMEDIATE RELEASE
Monday, August 15, 2022

Lansing Pharmaceutical Sales Representative Sentenced To One Year In Prison For Defrauding Michigan State University Of $1.2 Million For Compounded Drug Prescriptions

     GRAND RAPIDS, MICHIGAN – U.S. Attorney Mark Totten announced today that U.S. District Judge Robert J. Jonker sentenced Daniel Brown of Dimondale, Michigan to 12 months and one day in prison on a health care fraud conspiracy charge. Judge Jonker also sentenced Brown to three years of supervised release following his incarceration and ordered restitution totaling $1,267,418.00.

     Brown’s conviction stemmed from an agreement to have expensive and medically unnecessary compounded pain creams and patches prescribed to Michigan State University (“MSU”) employees that were filled by pharmacies in Mississippi.  Brown admitted soliciting a local physician to sign the prescriptions and splitting commission payments that the Mississippi pharmacies paid Brown for directing the prescription to their pharmacies.  The pharmacies then charged MSU’s health plan $2,000 - $3,000 for each prescription.

     As set forth in the government’s sentencing pleadings, Brown subsequently cooperated in the investigation and prosecution of the persons operating the pharmacies who were held criminally responsible in related federal cases in Mississippi for more than $200,000,000 in total claims paid for medically unnecessary compounded medications resulting from illegal kickbacks paid to sales representative and physicians around the country. 

     “Health care fraud raises costs on consumers, hurts businesses, and can subject persons to unnecessary treatment,” said U.S. Attorney Mark Totten.  He continued: “Those who scheme to defraud our public and private health care providers, and those who pay and receive kickbacks to influence the generation of medical services, face aggressive prosecution, significant financial penalties, and the real prospect of prison.” 

     “Individuals like Mr. Brown, who enrich themselves through fraud schemes, undermine the healthcare system and drives up costs for everyone,” said James A. Tarasca, Special Agent in Charge of the FBI in Michigan. “The FBI remains committed to working closely with our law enforcement partners to swiftly and thoroughly investigate such fraud allegations and bring criminals who engage in these schemes to justice.”

     This case was investigated by the Federal Bureau of Investigation, the Department of Health and Human Services, Office of Inspector General, Blue Cross Blue Shield of Michigan Corporate and Financial Investigations Unit, and the Michigan State Police.  Assistant U.S. Attorney Raymond E. Beckering III prosecuted the case.

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Topic(s): 
Health Care Fraud
Updated August 15, 2022