Defendants Convicted in Tennessee Over Multimillion-Dollar Nationwide Telemedicine Pharmacy Fraud Scheme | USAO-EDTN
GREENEVILLE, Tenn. This week, a federal judge in Greeneville, Tennessee, convicted seven individuals and seven related corporations for their roles in a multi-million dollar health care fraud scheme.
According to court documents and evidence presented at trial, Peter Bolos and his co-conspirators, Michael Palso, Andrew Assad, Scott Roix, Larry Smith, Mihir Taneja, Arun Kapoor and Maikel Bolos, as well as various companies owned or controlled by certain d ‘Between them these individuals have deceived Pharmacy Benefit Managers (PBMs), such as Express Scripts and CVS Caremark, regarding tens of thousands of prescriptions. PBMs processed and approved prescription drug claims on behalf of insurance companies. Bolos and his co-conspirators defrauded PBMs by authorizing millions of dollars in claims that private insurers such as Blue Cross Blue Shield of Tennessee and public insurers such as Medicaid and TRICARE, paid to pharmacies controlled by the co-conspirators.
Pierre Bolos was convicted by a federal jury in December 2021. Roix, Assad, Palso, Smith, Maikel Bolos and various associated business entities pleaded guilty to their role in the conspiracy. Taneja, Kapoor and Sterling Knight pleaded guilty to mislabeling the crime in a conspiracy with Bolos. U.S. District Judge J. Ronnie Greer this week handed down sentences for all defendants except Roix, whose sentencing hearing was adjourned to June 15, 2022.
May 16, the court condemned Bolos to 14 years in prison and $2.5 million in forfeiture. The same day, the court also sentenced Palso, 48, of Lutz, Florida, to 33 months in prison. Bolos and Palso were also each ordered to pay nearly $25 million in restitution.
On May 17, the court sentenced Smith, 52, of Tampa, to 42 months in prison. The now-defunct corporate entities Smith created, Alpha Omega Pharmacy, Germaine Pharmacy, Zoetic Pharmacy, ULD Wholesale LLC, and Tanith Enterprises, were all ordered to pay nearly $25 million in restitution. The court also sentenced Taneja, 47, of Tampa, to 10 months in prison and a $10,000 fine.
On May 18, the court sentenced Kapoor, 48, of Temple Terrace, Florida, to three years probation and a $10,000 fine. Sterling Knight, a now-defunct corporation created by Kapoor and Taneja, was ordered to pay $21 million in restitution. The court also sentenced Maikel Bolos, 36, of Tampa, to 15 months in prison and a $25,000 fine.
On May 19, the court sentenced Assad, 37, of Tampa, to 24 months in prison and to pay nearly $25 million in restitution. HealthRight was ordered to pay $4.25 million in restitution.
“The significant sentences handed down by the court reflect the seriousness of this large-scale fraudulent scheme, in which the defendants deceived consumers in order to facilitate the distribution of drugs without proper medical supervision, and overcharged insurers for illegal prescriptions,” said said the deputy assistant. Attorney General Arun G. Rao, Chief of the Civil Division Consumer Protection Branch. “The department will continue to work with law enforcement partners to prosecute those who take advantage of telemedicine to perpetrate fraudulent schemes that violate the Food, Drug and Cosmetic Act.”
“The scale of the prescription drug fraud scheme orchestrated by these defendants and their conspirators was astonishing, and the prison sentences handed down by the Court reflect the gravity of their crimes,” U.S. Attorney Francis M. Hamilton III said for the Eastern District of Tennessee. “The financial harm caused by health care fraud hurts all Americans, and the United States Attorney’s Office for the Eastern District of Tennessee will continue to support cooperation among its federal law enforcement partners. laws that is necessary to bring criminal crooks like these defendants to justice. ”
“This conviction is the result of a multi-agency investigation into a complex telemedicine pharmacy fraud scheme, requiring significant investigative resources,” said Special Agent in Charge Joseph E. Carrico of the FBI Field Office at Knoxville. “The FBI, along with its law enforcement partners, will remain vigilant to ensure that the unscrupulous individuals who exploit our healthcare system are brought to justice.”
“The distribution of mislabeled prescription drugs on the American market puts the health of patients at risk,” said Special Agent in Charge Justin C. Fielder of the Miami Field Office of the Office of Criminal Investigations (OCI). the FDA. “We will continue to pursue and bring to justice those who put profit before public health.”
“Bolos and his co-conspirators abdicated their healthcare responsibilities through an elaborate fraud scheme and manipulated the system without regard to patient needs or medical necessity to line their pockets” said Special Agent in Charge John Condon of Homeland Security Investigations (HSI) Tampa. “These significant penalties should serve as a warning to anyone who tries to deceive the government and rob taxpayers.”
“Providers who solicit recipients’ personal information and use it to defraud federal health care programs not only undermine the integrity of those programs; they also divert precious taxpayers’ money for selfish purposes,” said Special Agent in Charge Tamala E. Miles of the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “HHS-OIG is proud to work alongside our law enforcement partners to investigate and hold accountable perpetrators of federal health care fraud.”
“The U.S. Postal Service, Office of Inspector General, will continue to vigorously investigate those who commit fraud against federal benefit programs and the U.S. Postal Service,” said U.S. Postal Service Special Agent in Charge Matthew Modafferi. , Office of the Inspector General. Northeast Area Field Office. “The sentences in this case send a clear message to pharmaceutical companies that such tactics will not be tolerated. The U.S. Postal Service, Office of Inspector General would like to thank our law enforcement partners and the Department of Justice for their dedication and effort in this investigation.
“Today’s sentencing holds the conspirators accountable for their reprehensible scheme that misled patients and defrauded the federal government,” said Amy K. Parker, Special Agent in Charge, OPM OIG. “The OPM OIG, along with our law enforcement partners, is committed to investigating individuals who seek to enrich themselves at the expense of patients, taxpayers and federal health programs.”
Court documents and evidence at trial established that Bolos, Assad and Palso owned and operated Synergy Pharmacy in Palm Harbor, Florida. Under their direction, Synergy employed Roix, a Florida telemarketer doing business as HealthRight, to generate prescriptions for Synergy and the other pharmacies involved in the program. The prescriptions were usually for medications such as pain creams, scar creams and vitamins. Evidence showed that to obtain the prescriptions, Roix used HealthRight’s telemarketing platform as a telemedicine service, cold calling consumers and tricking them into accepting the drugs and providing their personal insurance information. HealthRight then paid doctors to authorize prescriptions through its telemedicine platform, even though the doctors never communicated directly with patients and relied solely on the telemarketer screening process as the basis for their authorizations. Because this flawed and fraudulent process rendered the prescriptions invalid, the drugs were mislabeled under the Food, Drug and Cosmetic Act. Evidence showed that Synergy and the other pharmacies were nonetheless dispensing the drugs to consumers under the scheme so that Bolos could submit fraudulent claims.
Court documents and trial evidence further established that during the conspiracy, which lasted from May 2015 to April 2018, Bolos and Palso, along with Assad, paid Roix millions of dollars to buy at least 60,000 invalid prescriptions generated by HealthRight. The evidence showed that Bolos selected specific drugs for prescriptions that he could submit for profitable reimbursements at inflated prices, and that Bolos, Palso and Assad used illegal means to hide this activity from PBMs so that it can remain undetected.
The convictions were the result of a multi-year investigation conducted by HHS-OIG (Nashville); FDA-OCI (Nashville); United States Postal Service, Office of Inspector General (Buffalo); FBI (Knoxville and Johnson City, Tennessee); OPM-OIG (Atlanta); and HSI (Tampa). The US Marshals Service also assisted in the investigation and asset forfeiture.
Assistant U.S. Attorney Mac Heavener of the U.S. Attorney’s Office for the Eastern District of Tennessee and Senior Attorney David Gunn of the Civil Division’s Consumer Protection Division in Washington are pursuing the case. They were assisted by Barbra Pemberton, Bryan Brandenburg and April Denard from the US Attorney’s office.