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Justice News

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

FOR IMMEDIATE RELEASE
Monday, April 1, 2019

Indictment Unsealed Charging Mangum Pharmacist with Over $1 Million in Health Care Fraud

Temporary Restraining Order Issued to Prevent Transfer of Assets

OKLAHOMA CITY – A federal indictment has been unsealed charging JEFFREY SCOTT TERRY, 37, of Mangum, Oklahoma, with forty counts of using his pharmacy to defraud Medicare and Medicaid, announced First Assistant U.S. Attorney Robert J. Troester and Oklahoma Attorney General Mike Hunter. 

"Protecting the health care system from fraud is critical to the stability and viability of the Medicare and Medicaid programs," said Mr. Troester.  "We are proud to have an active partnership with Attorney General Mike Hunter and his office where we work collaboratively together to fight health care fraud." 

"The ability to combine state and federal resources is one of our best assets when fighting fraud and corruption," Attorney General Hunter said.  "I appreciate Mr. Troester and his team for continuing to collaborate with us in cracking down on healthcare fraud in the state and for helping us hold perpetrators accountable for these types of crimes.  We must do everything we can to protect the Medicaid system, which serves Oklahomans in need."

According to an indictment filed on March 5 and unsealed on March 29, Terry was a licensed pharmacist who began operating Bratton Drug at 109 S. Oklahoma in Mangum in August 2015.  Both the Oklahoma Health Care Authority—which administers Medicaid under the name SoonerCare—and Medicare reimbursed Bratton Drug for prescriptions and pharmaceutical products it dispensed.

The indictment alleges that from August 2015 to September 2018, Terry submitted false claims to SoonerCare and Medicare Part D for drugs that had not actually been prescribed or ever dispensed to patients.  These false claims are alleged to have caused Terry to receive $338,481.81 from SoonerCare and $753,334.13 through the Medicare Part D program, for a total of $1,091,815.94 in fraudulent proceeds.

Terry appeared for his arraignment on March 29 before United States Magistrate Judge Bernard M. Jones.  He was released pending trial, which is scheduled to start on May 14, 2019.

If convicted, Terry faces up to ten years in prison on each count, in addition to a fine of up to $250,000.  He would also be subject to up to three years of supervised release after imprisonment and would be required to pay restitution to Oklahoma and the federal government for losses sustained by SoonerCare and Medicare.  Finally, the indictment seeks forfeiture of proceeds of these crimes, including real property at 321 S. Robinson in Mangum, a tract of land in Greer County, and a 2016 Dodge Challenger.

To maximize recovery of fraud proceeds, the United States also moved for and obtained a temporary restraining order that prevents Terry from transferring assets and spending money out of as many as eight financial accounts he controls.  According to court filings unsealed today, Terry commingled fraud proceeds in personal and business accounts and has been rapidly selling, transferring, dissipating, and concealing assets since the Oklahoma Attorney General’s Office’s Medicaid Fraud Control Unit executed a search warrant in October 2018.  Part of that concealment allegedly involves transferring Bratton Drug’s inventory and business to Granite Drug in Granite, Oklahoma, which he also controls.

These charges are the result of an investigation by the Oklahoma Attorney General’s Office’s Medicaid Fraud Control Unit and the U.S. Department of Health and Human Services—Office of Inspector General, including its Office of Audit Services.  Assistant Oklahoma Attorney General Lory Dewey, who also serves as a Special Assistant U.S. Attorney, and Assistant U.S. Attorney Amanda Green are prosecuting the case.  Assistant U.S. Attorneys Amanda Johnson and Ron Gallegos of the U.S. Attorney’s Office’s Civil Division are handling the request for a temporary restraining order.

The public is reminded that these charges are merely allegations and that Terry is presumed innocent unless and until proven guilty beyond a reasonable doubt.  Reference is made to public filings for further information.

Topic(s): 
Health Care Fraud
Updated April 1, 2019