Eight Sentenced in Multimillion Dollar Telemedicine Pharmacy Fraud Scheme

The Department of Justice issued a press release last Friday announcing that multiple defendants had been sentenced in connection with a multimillion-dollar nationwide telemedicine pharmacy fraud scheme. Eight individuals and their related corporate entities pled guilty to intentionally misleading pharmacy benefit managers (PBMs) like Express Scripts and CVS Caremark about tens of thousands of prescriptions. The PBMs, the release said, then unknowingly authorized millions of dollars’ worth of claims which insurance companies paid to pharmacies that were controlled by the convicted individuals and their related companies.

The release explained that convicted individuals used a telemarketing platform to cold-call consumers and convince them to provide their personal insurance information and accept drugs like pain creams, scar creams, and vitamins. The defendants would then pay doctors to fill the prescriptions, despite them having no contacts with the patients. The drugs would then be given to the consumers so that fraudulent insurance reimbursement claims could be filed.

The press release asserts that the specific medications were chosen because they could be submitted for profitable reimbursements at inflated prices, and that the defendants “used illegal means to hide this activity from the PBMs so it could remain undetected.” The defendants were each sentenced to serve time in prison and pay varying amounts of restitution, ranging from $25,000 to $25 million.

Deputy Assistant Attorney General Arun G. Rao, head of the Civil Division’s Consumer Protection Branch, stated that “The significant sentences imposed by the court reflect the seriousness of this large-scale fraud scheme, in which the defendant’s deceived consumers in order to facilitate the distribution of drugs without proper medical oversight, and overbilled insurers for illegal prescriptions.”

“Bolos and his co-conspirators abandoned their responsibilities in the health care industry through an elaborate fraud scheme and manipulated the system without regard for patient need or medical necessity to line their pockets,” Special Agent in Charge John Condon of Homeland Security Investigations Tampa further explained.

The multi-year investigation revealed that the conspiracy spanned from May 2015 to April 2018, during which time at least 60,000 invalid prescriptions were filed. Special Agent in Charge Amy K. Parker of OPM OIG said “Today’s sentencing holds the conspirators accountable for their reprehensible scheme that misled patients and defrauded the federal government.”