Prescription Drug Fraud

In Rhode Island, a pharmacist was sentenced to 37 months in prison for charges related to selling prescription drug samples to customers at his pharmacy. In addition, the pharmacist was ordered to forfeit $431,000 to the Government and pay a $45,000 fine. Pharmaceutical representatives provided the drug samples to a physician who in turn diverted them to the pharmacy. In September 2004, the physician was sentenced to 10 years in prison for his involvement in this scheme and for administering diluted vaccines to immigrant patients.

Physicians and Other Health Care Professionals

In Ohio, a chiropractor was sentenced to 1-year incarceration and ordered to pay $79,000 in restitution for health care fraud. Regardless of the service he actually performed, the man billed all services as manipulative treatments since it is the only service for which Medicare authorizes reimbursement. In addition, the chiropractor provided medical excuses for patients to miss work in exchange for allowing him to bill services to their insurance carriers.

In Maine, a registered nurse was sentenced to 18 months in jail with all but 45 days suspended for theft of drugs. While working at a hospital emergency room, the woman stole morphine on at least three occasions.

Hospitals, Laboratories, and Clinics

In Texas, the owner of a clinic was sentenced to 12 months and 1 day in prison and ordered to pay $463,000 in restitution and fines. The man claimed employee bonuses totaling $500,000 on the clinic’s 1997 cost report that were not paid to employees but were used by him for other purposes not related to the clinic.

Nursing Homes

In Louisiana, the former owner of a nursing home management company was sentenced to 37 months imprisonment for health care fraud and pension fraud. In addition, he was ordered to forfeit his $700,000 residence, a retirement estate valued at approximately $2.5 million, and numerous pieces of construction equipment. Through his company, the man, who owned three nursing homes, diverted Medicare and Medicaid money intended for the care of residents for his own personal use. Because these funds were diverted, facilities were inadequately staffed and residents were forced to do without proper personal care items and medications. In addition, the man claimed $2.3 million on cost reports for payments to vendors when, in fact, the funds were diverted for his own personal use; failed to timely deposit pension plan funds withheld from employees’ paychecks; and as the administrator of the pension plan, made unauthorized loans to himself to pay debts of his construction company and retirement estate. The man’s retirement estate contained five manmade ponds, a stone-lined manmade waterfall, and exotic swans. Though his nursing homes were inadequately staffed, he used nursing home monies to employ five to seven groundskeepers to properly care for his retirement estate. At one of the nursing home facilities, a nurse was forced to cut the knee-high grass.