Kurt Cobain once said, "The duty of youth is to challenge corruption."
Apparently Daniel Suarez wasn't a big Nirvana fan.
Suarez is 24 years old, and he'll spend the remainder of his twenties in a prison cell serving a nine-year sentence for participating in a healthcare fraud scheme that stole $21 million from Medicare.
As it turns out, the scheme was a family business, according to the Miami Herald. Along with his mother, aunt and two other family members, Suarez served as the owner of eight different pharmacies in the Miami area. The group paid patients and recruiters for their Medicare ID numbers, and then used the information to bill Medicare Part D for prescriptions that were never dispensed. Last week, eight others involved in the scheme, including Suarez's mother and aunt, were sentenced to nine years as well.
According to the indictment, Suarez and his family members started submitting claims to Medicare as far back as 2010, meaning Suarez was just old enough to buy cigarettes and lottery tickets when the scheme kicked off.
It wasn't a particularly unique scheme, but Suarez, with his youthful vigor, didn't make a concerted effort to fly under the radar. As the Washington Post reports, Suarez invested his earnings in flashy cars: A Rolls Royce Ghost that sells for as much as $321,000 and a Mercedes Benz worth more than $160,000.
But Suarez was as creative as he was ostentatious. He leased those cars to a luxury rental company to make it appear as though they were a business investment. He also bought a handful of FedEx trucks in an apparent attempt to launder his Medicare earnings, telling investigators that he was a franchisee of the company. Of course he also spent hundreds of thousands of dollars on jewelry that he immediately pawned for cash, and racked up more than $2 million in credit card and restaurant charges.
You have to admire the youthful zeal with which he went about the whole thing. You also have to admire his lawyer's defense: His aunt made him do it.
"Mr. Suarez's whole life has revolved around his family," Frank Quintero wrote in court papers, according to the Herald. "Unfortunately, due to his young age and sense of familial duty, Mr. Suarez allowed himself to be involved in the instant conspiracy."
Apparently some family traditions are tough to break.
Suarez's sentencing just so happens to coincide with charges against another brash young alleged fraudster, Martin Shkreli, although Shkreli's charges are of the securities-fraud variety. Although Shkerli is nearly a decade older than Suarez, prosecutors are focusing on alleged indiscretions that occurred in 2009, when Shkreli was 26 and making his fortune as a hedge fund manager. He is accused of running a Ponzi-like scheme in which he used money from his first biopharmaceutical company, Retrophin, to pay off money-losing investors in his hedge funds, according to the New York Times.
Dubbed the "pharma bro," Shkreli has become a household name by reveling in his villainous persona after his company, Turing Pharmaceuticals, raised the price of an HIV drug from $13.50 to $750 per pill, a move that drew even more public indignation after he doubled down and called FierceBiotech reporter John Carroll a "moron" for asking about the 5,000 percent price increase.
Shkreli has since said that his over-the-top attitude was a "social experiment," apparently one gone horribly wrong, the Wall Street Journal reported. He has pleaded not guilty to the securities fraud charges against him, which carry a 20-year prison sentence.
You could call it ignorance, stupidity or youthful hubris, but Shkreli and Suarez suffer from a similar ailment, even if the charges against them are vastly different. Suarez couldn't help but flaunt his newfound wealth, even though it brought on unwanted attention and ultimately exposed the inner workings of his scheme. Similarly, Shkreli found himself rich in notoriety and apparently couldn't resist pushing the limits of public animosity, regardless of what kind of scrutiny that might bring. Federal authorities had been investigating Shkreli since 2012, according to the Wall Street Journal, but his case became higher priority once he emerged as one of the most reviled pharmaceutical executives in America--a notable feat in and of itself.
Fraud, and more generally, white-collar crime, is usually found among middle-aged executives or 60-something physicians; the Bernie Madoffs and Salomon Melgens of the world. Rarely do you see a 20- or 30-something facing substantive fraud charges, but Suarez and Shkreli break the mold. What makes both their cases interesting is their uninhibited recklessness appears to be their ultimate downfall.
Everyone can probably look back at their teens and early 20s and quickly conjure up a few cringe-worthy mistakes. Only a select few can say those youthful indiscretions involved high-profile fraud. - Evan (@HealthPayer)