7 Guilty Pleas in Compound Cream Scheme, as 8 Indicted in Separate Case

Friday, December 21, 2018 | 0

A Dallas-area woman has become the seventh person to plead guilty in a kickback scheme in which a Mississippi pharmacy billed Tricare for more than $10 million in prescriptions for compounded pain creams.

Jennifer Sorenson, 41, of McKinney, Texas, pleaded guilty Wednesday to conspiring to violate the anti-kickback statute, the U.S. Attorney’s Office for the Eastern District of Arkansas announced.

Sorenson admitted that she ran a network of subordinates, including a member of the Army National Guard, through which she recruited more than 20 Tricare beneficiaries for the scheme. Tricare is the health insurance program for active or retired military members and their families.

Four other patient recruiters have pleaded guilty in the case, as well as the scheme’s ringleader, Brad Duke, 44, of Little Rock, Arkansas, and 38-year-old Charlotte Leija, of Conway. Leija was a medical assistant who inserted the name of the Little Rock doctor for whom she worked onto prescriptions without his knowledge.

Chief U.S. District Judge Brian S. Miller will sentence the defendants in 2019.

The announcement this week of a seventh guilty plea in the Mississippi pharmacy scheme comes as a similar case appears to be unfolding in Texas.

Eight Dallas-area pharmacy owners and marketers were charged in an indictment for their roles in a scheme involving about $92 million in compound drug claims to Tricare and the U.S. Department of Labor.

The claims were allegedly the result of more than $9.1 million in illegal kickbacks, the U.S. Attorney’s Office for the Northern District of Texas said in a news release.

According to the indictment unsealed Wednesday, defendant Turner Luke Zeutzius, 36, of Horseshoe Bay, Texas, was paid approximately $4.4 million in kickbacks; Michael Ranelle, 49, of Fort Worth, Texas, received about $2.6 million in illegal kickbacks; and Quintan Cockerell, 37, of Manhattan Beach, California, was paid approximately $2.1 million through an unnamed person.

Also charged in connection with the scheme were Richard Hall, 48; Scott Schuster, 47; Dustin Rall, 43; and George Lock Paret, 34, all of Fort Worth, Texas; and John Le, 43, of Dallas.

The scheme, which operated from about May 2014 to September 2016, involved a “vast network” of marketers who referred prescriptions to Rxpress Pharmacy and Xpress Compounding in Fort Worth, prosecutors allege. The two pharmacies are at the same location and are separate in name only.

Both pharmacies accepted payment from Tricare and the DOL, through the Federal Employees' Compensation Act.

Hall, Schuster, Rall and Paret allegedly recruited marketers. Paret told marketers how to obtain doctor signatures on medically unnecessary prescriptions. The indictment didn’t include details on how the signatures were obtained.

Paret, who was the pharmacist-in-charge at Rxpress Pharmacy, allegedly authorized the processing of prescriptions from doctors he knew were not seeing patients, and for prescriptions he knew were not legitimate, to receive a commission called an “override” on the prescriptions. Paret also created a prescription pad that allowed the pharmacist to change the prescribed ingredients to more expensive ingredients and maximize reimbursements, prosecutors said.

Schuster allegedly paid bonuses to employees, including Paret, each day the pharmacies billed more than $1 million.

“Schuster concealed the bonuses and eventually switched to gift cards instead of cash payments,” the indictment states.

At one point, Schuster allegedly told marketers to focus on Tricare beneficiaries because the program was paying the most for compound creams.

During 2014 and 2015, Tricare was paying exorbitant amounts — up to tens of thousands of dollars per patient, per month — for certain compounded drugs, prosecutors noted. And that didn’t go unnoticed by scammers.

In the case involving the Mississippi pharmacy, the scheme generated more than $10 million in compound drug prescriptions for more than 100 Tricare beneficiaries from Chula Vista, California, to Foxborough, Massachusetts.

In that case, patient recruiters rounded up Tricare beneficiaries through offering them cash and gift cards to receive the drugs, and paying others — including current and former members of the military — to recruit still more Tricare beneficiaries, prosecutors said.

In the Mississippi pharmacy case, four patient recruiters in addition to Sorenson have pleaded guilty. They include three Arkansas men — Michael “Chance” Beeman, 49, of Maumelle; Michael Sean Brady, 50, of Little Rock; and Brian Means, 44, of Fort Smith — as well as Jason Greene, 31, of Nashville, Tennessee.

Judge Miller has ordered nearly $3 million in forfeiture so far, of which almost $1.4 million has been recovered.