Three former executives of a Louisiana compounding pharmacy were indicted in an alleged $50 million scheme to defraud New Jersey and military health benefits programs.
The three executives worked for Central Rexall Drugs, a compounding pharmacy in Hammond, La. Christopher Johnston was general counsel, Trent Brock was COO and Christopher Casseri was vice president of sales.
According to U.S. Attorney Craig Carpenito of the District of New Jersey, the three men learned that some insurance plans — including plans for New Jersey state and local government and education employees and the military insurer Tricare — would reimburse thousands of dollars for one-month supplies of some compounded drugs. They designed compounded drugs and manipulated the ingredients to receive high reimbursements rather than serve the medical needs of the patients, the indictment states.
Central Rexall sent compounded medications to patients based solely on financial gain without research or testing showing the combination of ingredients worked, according to the indictment. They are also accused of having prescriptions signed without the patient seeing a physician or knowing about the medications, having medications ordered without patients' knowledge and paying patients to accept medications and physicians to prescribe them.
The three men and their conspirators prompted more than $50 million in fraudulent insurance claims for compounded medications that weren't medically necessary, the indictment states. They also took patients' names, dates of birth and other identifying information without their consent from their prescriptions and used them to make false claims to the pharmacy benefits administrator, according to the indictment.
They were charged with conspiracy to commit healthcare fraud and wire fraud and conspiracy to commit identity theft by using patients' personal identification information without their consent. Mr. Johnston and Mr. Brockmeier also face charges of conspiring to commit money laundering. The three men each face up to 35 years in prison.
In August, Hayley Taft, CEO of the pharmacy, pleaded guilty to playing a key role in the scheme.
Read the full U.S. Justice Department news release here.