Ten more defendants were arrested last week and charged with conspiracy to commit healthcare fraud in an alleged $100 million kickback scheme involving a Dallas marketing company that recruited unknowing soldiers and their families to defraud Tricare, the health insurance program for military members and their families.
FBI and Defense Criminal Investigative Service agents arrested the suspects, which included doctors, pharmacy owners and marketers, under a 35-count federal indictment, the U.S. attorney for the Northern District of Texas announced. The indictments followed the arrests in February of Richard Robert Cesario and John Paul Cooper, co-owners of Dallas-based CMGRX LLC, which marketed compounded pain and scar creams to Tricare members on behalf of several pharmacies.
Cesario and Cooper, who have no medical backgrounds, remain in federal custody, according to the U.S. attorney’s office. Both have been charged with 14 counts each of payment and/or receipt of illegal remuneration, along with conspiracy to commit healthcare fraud.
The alleged fraud took place between May 2014 and February 2016, according to the announcement. Hundreds of Tricare beneficiaries at Fort Hood, Texas, were recruited to use their prescription benefits to buy compounded drugs for what turned out to be a sham drug study and paid up to $250 per month in “grant” money by CMGRX. The owners allegedly funneled money to the beneficiaries through a fake charity, which also allegedly paid doctors cash kickbacks for writing the prescriptions.
Walter Neil Simmons, M.D., of Mesa, Arizona--who was among the group arrested last week--helped create the fake study, the U.S. attorney’s office said. Also arrested was William F. Elder-Quintana, M.D., of El Paso, Texas, whom prosecutors said was paid to write thousands of prescriptions for compounded drugs to Tricare beneficiaries.