3 charged in $180M scheme to fraudulently bill federal, private payers for compounded drugs

Wooden gavel and gold legal scale that appear to have sunlight falling on them
Three have been charged in a $180 million pharmacy fraud scheme. (Getty Images/William_Potter)

Three people have been charged in a $180 million scheme to defraud government and private payers by falsely billing for compounded medications.

Mitchell “Chad” Barrett, 54, of Gulf Breeze, Florida; David “Jason” Rutland, 41, of Bolton, Mississippi; and Thomas “Tommy” Shoemaker, 56, of Rayville, Louisiana were charged May 27 but federal authorities, with the indictment unsealed on June 12, the Department of Justice (DOJ) announced.

According to the indictment, the three defendants conspired to submit the fraudulent bills between September 2011 and January 2016. Of the $180 million, $50 million was defrauded from government payers, namely Medicare and TRICARE, the DOJ said.

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They used several pharmacies to fraudulently formulate, dispense, ship and bill compounded medications, largely in the form of creams and capsules, the DOJ said. Some of these medications included controlled substances.

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The three defendants also paid kickbacks and bribes to physicians, markets, other providers and beneficiaries to continue the scheme, the DOJ said.

The DOJ also said the laundered the funds received through the scheme in purchases valued $10,000 or more, including real estate, luxury cars and a three-carat diamond.

The DOJ said it received $2.6 billion in fraud recoveries in 2019, marking the tenth year in a row that fraud recoveries topped $2 billion.

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