South Carolina Pharmaceutical Distribution Company Pleads Guilty in Multi-Million Dollar Scheme to Purchase and Sell Drugs in the Grey Market

To contact us Click HERE

The Department of Justice announced theguilty plea and sentencing of Easley, S.C.-based Altec Medical for engaging ina multi-million dollar prescription drug scheme.  Altec Medical pleaded guilty in U.S. DistrictCourt in Miami to one count of conspiring to defraud the U.S. Food and DrugAdministration (FDA) and to commit federal offenses in connection with adrug-diversion scheme that lasted from 2007 to 2009.
 In the sentencing, U.S. District Judge RobertN. Scola, Jr. ordered Altec to pay a $2 million fine and to forfeit $1 million.The judge also ordered the company to be on probation for one year.
 In a criminal information filed with thecourt, the government charged that Altec paid its supplier and co-conspiratorWilliam D. Rodriguez, approximately $55 million for prescription drugs that itknew had been diverted from lawful channels of drug wholesaledistribution.    “Drug Diversion” refersto various ways in which prescription drugs are removed from lawful channels ofdistribution and then reintroduced into the marketplace for sale to consumers.In drug diversion schemes, prescription drugs at issue are often stolen fromwarehouses or cargo trucks; torn from boxes of free samples, repackaged andresold; or bought from individual patients looking to make extra money.
 “Drug diversion undermines the safety andeffectiveness of our prescription drug system,” said Stuart F. Delery, ActingAssistant Attorney General for the Justice Department’s Civil Division.   “When individuals divert drugs from lawfulchannels, we cannot be sure that the drugs are properly handled andstored.   As a result, diverted drugscould be expired, become contaminated, or have their mechanisms of actionaltered.  Diversion is a serious crimethat puts consumers at risk; we will continue to prosecute those who engage init aggressively.”
 The Justice Department advises consumers whohave concerns about a drug to check the lot numbers on the manufacturer’s website to see if there are any warnings about it.
 Accordingto a plea agreement that was filed with the court, Altec became aware thatRodriguez had bought these drugs from individuals who had acquired themillegally and who were not properly licensed to sell prescription drugs on awholesale basis.   The government furthercharged that Altec and Rodriguez orchestrated the reentry of these drugs intothe lawful channels of distribution. According to the government, Rodriguezfirst sent the diverted drugs to companies he controlled in South Carolina.   His companies, in turn, resold the drugs toAltec, which, in turn, resold the drugs to various purchasers throughout theUnited States, including drug distributors with valid drug distributionlicenses.   This process caused reentryof the diverted drugs into the ordinary, lawful channels of distribution.   Eventually, the diverted drugs were boughtby retail pharmacies, which dispensed the drugs by filling prescriptions forindividual consumers.  
 Finally, the government charged that Altec andRodriguez attempted to conceal their scheme by falsifying a variety of businessrecords.   In particular, Altec andRodriguez falsified documents known as “drug pedigrees.”   Drug pedigrees are statements required bythe FDA of all those who sell wholesale quantities of prescription drugs. Thedrug pedigrees are supposed to accurately identify all prior sales andtransactions so that it is clear that the drugs have been acquired lawfully,and properly stored and held along the way. Despite knowing that the lawrequired accurate pedigrees, Altec admitted that it created pedigrees thatfalsified prior transactions to make it appear as though the drugs hadoriginally been acquired lawfully.  
 Use of diverted drugs can cause unpredictableadverse side effects and may fail to treat the condition for which a consumeris taking the drugs. According to the government, neither purchasers who boughtfrom Altec nor consumers who later bought the drugs at retail pharmacies wouldhave purchased the drugs had they known that the drugs had been diverted.
In June 2012, in U.S. District Court inMiami, Rodriguez pleaded guilty to conspiracy and money laundering in aseparate case charging him with, among other things, his role in this drugdiversion scheme. He has not yet been sentenced.
 The case was prosecuted by Assistant U.S.Attorney Jon M. Juenger, of the U.S. Attorney’s Office for the SouthernDistrict of Florida, and David A. Frank, of the Justice Department’s ConsumerProtection Branch.   Additionalassistance was provided by Joshua Eizen, of the FDA’s Office of Chief Counselfor Enforcement.    The case wasinvestigated by the FDA’s Office of Criminal Investigations.

Seventh Defendant Convicted in Multi-Million-Dollar Health Care Fraud Scheme

To contact us Click HERE
HOUSTON—Tony Nnonso Obi, 56, anaturalized U.S. citizen from the Federal Republic of Nigeria, has entered aplea of guilty for his role in a massive health care fraud conspiracy thatbilled the Medicare and Medicaid programs for more than $45 million, UnitedStates Attorney Kenneth Magidson announced today.
Obi was convicted of one count ofconspiracy to commit health care fraud and one count of money laundering.
As part of his plea, Obi admitted toentering into an agreement with the owner of City Nursing, Umawa Imo, toreceive 15 percent of the money City Nursing obtained from Medicare forservices billed on individuals referred to City Nursing by Obi or on Obi’sbehalf. Imo, who is currently serving more than 27 years in federal prison forhis role in the conspiracy, paid Obi $1,051,425.28. At least three of thebeneficiaries taken to City Nursing by Obi were individuals living in Obi’sassisted living facility. Obi also admitted to paying beneficiaries andrecruiters and handling office matters when Imo was out of the office.
Obi faces up to 10 years in prison and a$250,000 fine for each count. U.S. District Judge Kennth Hoyt, who accepted theplea today, has set sentencing for November 5, 2012. He has been in custodysince his April 3, 2012 arrest, where he will remain pending that sentencinghearing.
Six others have also been convicted inrelation to this scheme. The investigation into City Nursing was the result ofa joint investigation by agents of the FBI, Internal Revenue Service-CriminalInvestigation, the Department of Health and Human Services-Office of InspectorGeneral, and the Texas Attorney General’s Office-Medicare Fraud Control Unit.Assistant United States Attorney Julie Redlinger is prosecuting the case.

Justice Department to Monitor Elections in Florida and Wisconsin

To contact us Click HERE

The Justice Department announced todaythat it will monitor elections on Aug. 14, 2012, in the following jurisdictionsto ensure compliance with the Voting Rights Act of 1965 and other federalvoting rights statutes:  Collier, Hendry,Lee, Osceola and Polk Counties, Fla.; and the city of Milwaukee, Wis.
 The Voting Rights Act prohibits discriminationin the election process on the basis of race, color or membership in a minoritylanguage group.  In addition, the actrequires certain covered jurisdictions to provide language assistance duringthe election process.  Collier, Hendry,Lee, Osceola and Polk Counties, as well as the city of Milwaukee, are requiredto provide language assistance in Spanish. 
 Civil Rights Division personnel will monitor pollingplace activities in these jurisdictions. Civil Rights Division attorneys will coordinate federal activities andmaintain contact with local election officials.
 Each year, the Justice Department deployshundreds of federal observers from Office of Personnel Management, as well asdepartmental staff, to monitor elections across the country.  To file complaints about discriminatoryvoting practices, including acts of harassment or intimidation, voters may callthe Voting Section of the Justice Department’s Civil Rights Division at1-800-253-3931.
 Visit www.justice.gov/crt/voting/index.php formore information about the Voting Rights Act and other federal voting laws.

Miami-Area Patient Broker Sentenced to 18 Months in Prison for Role in $200 Million Medicare Fraud Scheme

To contact us Click HERE

WASHINGTON – A Miami-area patient brokerwas sentenced today to 18 months in prison for recruiting Medicarebeneficiaries as part of a $200 million Medicare fraud scheme, the Departmentof Justice, FBI and Department of Health and Human Services announced.
 Jean-Luc Veraguas, 51, of Plantation, Fla.,was sentenced by U.S. District Judge Frederico A. Moreno in the SouthernDistrict of Florida.  In addition to hisprison term, Veraguas was ordered to pay $1.8 million in restitution, jointlyand severally with other co-conspirators.
 On May 30, 2012, Veraguas pleaded guilty toone count of conspiracy to commit health care fraud.  Veraguas admitted to serving as a patientbroker for American Therapeutic Corporation (ATC) and other health careagencies.  ATC operated purported partialhospitalization programs (PHPs) in seven different locations throughout SouthFlorida and Orlando. A PHP is a form of intensive treatment for severe mentalillness.
 According to court documents, Veraguasrecruited patients to attend ATC’s PHP program, among others, in exchange forillegal kickbacks.  Veraguas admittedthat based on his recruiting efforts, he caused $3.8 million in fraudulentbills to Medicare.  Veraguas admitted heknew many of the individuals he recruited did not need the treatment theypurported to have received.
 According to court filings, ATC’s owners andoperators paid millions of dollars in kickbacks to owners and operators ofassisted living facilities and halfway houses and to patient brokers inexchange for delivering ineligible patients to ATC.  According to court filings, co-conspiratorsfabricated documents in patient files to hide the fact that the patients didnot, in the first instance, qualify for treatment and did not ultimatelyreceive the treatment for which Medicare was billed.
 ATC, its management company, MedlinkProfessional Management Group Inc., and various owners, managers, doctors,therapists, patient brokers and marketers of ATC, were charged with varioushealth care fraud, kickback, money laundering and other offenses in twoindictments unsealed on Feb. 15, 2011. ATC, Medlink and more than 20 of the individual defendants charged in thesecases have pleaded guilty or have been convicted at trial.
 The sentence was announced by AssistantAttorney General Lanny A. Breuer of the Justice Department’s Criminal Division;U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Jeffrey C.Mazanec, Acting Special Agent-in-Charge of the FBI’s Miami Field Office; andSpecial Agent-in-Charge Christopher Dennis of the HHS Office of InspectorGeneral (HHS-OIG), Office of Investigations Miami office.
 The criminal case is being prosecuted by TrialAttorneys Steven Kim, Robert Zink and Alan Medina of the Criminal Division’sFraud Section.  A related civil action isbeing handled by Vanessa I. Reed and Carolyn B. Tapie of the CivilDivision.  The case was investigated bythe FBI and HHS-OIG, and was brought as part of the Medicare Fraud StrikeForce, supervised by the Criminal Division’s Fraud Section and the U.S.Attorney’s Office for the Southern District of Florida.
 Since its inception in March 2007, theMedicare Fraud Strike Force, now operating in nine cities across the country,has charged more than 1,330 defendants who have collectively billed theMedicare program for more than $4 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, workingin conjunction with HHS-OIG, is taking steps to increase accountability anddecrease the presence of fraudulent providers.
 To learn more about the Health Care FraudPrevention and Enforcement Action Team (HEAT), go to:www.stopmedicarefraud.gov.

Use of FBI’s Anti-Piracy Seal Broadened

To contact us Click HERE

Effective today, a new federalregulation governing the FBI’s Anti-Piracy Warning (APW) Seal authorizes use ofthis seal by all U.S. copyright holders, subject to specific conditions. Anyonewishing to use the seal—along with the mandatory authorized warninglanguage—must obtain it directly from the FBI’s public website.
The purpose of the APW Seal is to remindmedia users of the serious consequences of pirating copyrighted works.Copyrighted works can include—but are not limited to—films, audio recordings,electronic media, software, books, photographs, etc. Use of the seal does notindicate that the FBI has reviewed or validated copyright interests in theparticular work and does not provide greater legal protection to the work. Itsimply serves as a reminder of the Bureau’s authority and mission with respectto the protection of intellectual property rights.