More than a dozen civilians are accused of scamming over $100 million dollars from TRICARE by writing prescriptions that weren't medically necessary and then overcharging for them.
Earlier this month the Department of Justice and the U.S. Attorney's Office announced that they had added 10 people to an indictment originally handed down in February.
Named in the updated indictment are two businessmen, three marketing specialists, two doctors, and five pharmacy owners.
The 36 page indictment outlines a massive scheme to defraud the government through a series of kickbacks, money laundering, and medical malpractice.
The feds allege the conspiracy began in 2014 when Richard Cesario and John Cooper founded CCMGRX, LLC (later renamed CMGRX). The premise of the company was to market compounded prescriptions to service members, retirees, and their dependents, documents show.
Compound prescriptions are drugs which are mixed in an effort to provide a unique prescription that meets the specific needs of the patient. They are not approved by the FDA, but may be prescribed when a patient is unable to have a specific ingredient in a drug, or the drug is not available in a specific form, such as prescriptions for children who can't swallow a pill and must have a liquid version of the medication.
Cesario and Cooper enlisted the help of three marketers, Joe Straw, Luis Rios, and Michael Kiselak, to recruit pharmacies and patients, the indictment shows.
The patients allegedly were oblivious to the scam, instead being told that they were taking part in a medical study being done by an independent non-profit organization, the Freedom From Pain Foundation. The company was operated by Cesario and Cooper, who used the company to launder the money they received from TRICARE, Justice says.
Money was allegedly paid to five different pharmacy owners and two doctors.
After paying beneficiaries for participating in the study, kickbacks were allegedly sent in the form of checks to the doctors, pharmacy owners, and marketers. The rest was pocketed by Cesario and Cooper, the feds say.
More than 30 separate counts were filed against the men, including conspiracy to commit healthcare fraud.
The indictment also outlines some of the punishment the men will face should they be found guilty, beginning with a list of properties in Texas, Florida, and Costa Rica that the men will have to turn over to the government.
Additionally, 32 vehicles, including Ferraris; Maseratis; Aston Martins, Corvettes; Mercedes-Benz; Jaguars; Porsches; Hummers; Cadillacs; BMWs and several trucks and SUVs will be seized by the government upon conviction of any single offense.
The indictment goes on to list multiple boats and recreational vehicles, bank accounts in the names of the men and family members, cash, investment accounts, firearms, jewelry, other property, and "working interest" in several oil companies, as well as a "money judgement" that could all be seized by the government in an effort to recoup the over $100 million scammed by the group.
According to the press release regarding the indictment, Cesario and Cooper, who were placed in custody earlier this year, are being held until trial. The other 10 men all made bail until their trial.
Each of the charges against the men is punishable by between 5 and 10 years, and a $250,000 fine.
The FBI and the Defense Criminal Investigative Service helped investigate and breaking up the alleged conspiracy ring.