Cleveland Doctor Sentenced in Hospice Fraud Case

Monday, August 14, 2017

OXFORD, Miss. – Robert H. Norman, Acting United States Attorney for the Northern District of Mississippi; Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General; Christopher Freeze, Special Agent in Charge at the Federal Bureau of Investigationand Mississippi Attorney General Jim Hood announced that:

Dr. Nathaniel Brown, 62, of Cleveland, Mississippi, was sentenced Thursday, August 10, 2017 before United States District Judge Neal B. Biggers, Jr. in Oxford, Mississippi. Dr. Brown was sentenced to serve thirty-nine (39) months in federal prison followed by three (3) years supervised release and ordered to pay $1,941,254 in restitution to the Medicare program.

In January, Dr. Brown pled guilty to conspiracy to commit healthcare fraud in violation of 18 U.S.C. §§ 1347 & 1349. Brown admitted to referring patients who were not hospice appropriate to Milestone Hospice and Sandanna Hospice which led to $1,941,254 in Medicare payments to Milestone and Sandanna. Brown also admitted to receiving $47,750 in payments by check from the hospice owner in addition to cash payments.

Dr. Brown is a corrupt doctor who participated in a hospice scam to exploit patients and their families,” said Special Agent in Charge Derrick L. Jackson, of the U.S. Department of Health and Human Services, Office of Inspector General. “The verdict today should send a clear message to dishonest medical professionals who abuse our health care system – they will be caught and face significant criminal charges.”

“Joint investigations continue to be indispensable in the fight against fraud in healthcare benefit programs,” said Attorney General Jim Hood. “We will continue to work with our federal and state partners in this ongoing battle to protect the resources needed to serve our most vulnerable citizens.”

“It is important the Medicare fund is properly guarded against inappropriate billing by health care providers, and patients are receiving those services billed to Medicare,” said Christopher Freeze, Special Agent in Charge of the FBI in Mississippi. “The FBI will continue to take a strong stance against individuals who engage in health care fraud.”

This case was investigated jointly by the US Department of Health and Human Services, Office of Inspector General, the Medicaid Fraud Control Unit of the Mississippi Attorney General’s Office and the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorneys Clay Dabbs and Clay Joyner.

Pharmacist Pleads Guilty to Health Care Fraud Charges for Role in $192 Million Compounded Medication Scheme; Pharmacy Marketer Also Pleads Guilty

Tuesday, July 25, 2017

The Pharmacist in Charge of a Hattiesburg, Mississippi compounding pharmacy pleaded guilty today to health care fraud charges for his role in a scheme that defrauded TRICARE and private insurance companies out of at least $192 million in payments for medically unnecessary compounded medications.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Harold Brittain of the Southern District of Mississippi, Special Agent in Charge Christopher Freeze of the FBI’s Jackson Division, Special Agent in Charge Jerome R. McDuffie of the Internal Revenue Service – Criminal Investigation’s New Orleans Field Office and John F. Khin and the Defense Criminal Investigative Service Southeast Field Office made the announcement.

May, 40, of Lamar County, Mississippi, pleaded guilty to one count of conspiracy to commit health care fraud and money laundering before U.S. District Judge Keith Starrett of the Southern District of Mississippi. Sentencing has been scheduled for October 17 before Judge Starrett.

As part of his guilty plea, May admitted that he conspired with others to select compounded medication formulas based on profitability, rather than on effectiveness or patient need. He further admitted that he conspired with co-owners of the pharmacy to circumvent fraud prevention measures, such as collecting copayments, so that patients were incentivized to receive, and continue to receive, medically unnecessary medications.  According to plea documents, May dispensed these medically unnecessary compounded medications and caused fraudulent claims to be submitted to TRICARE, a health care program that benefits members of the U.S. armed forces, and other health care benefit programs. Based on these fraudulent claims, May and his co-conspirators received at least $192 million in reimbursements.

In a related case, Gerald Schaar, 46, of Biloxi, Mississippi, pleaded guilty to one count of conspiracy to commit health care fraud for his role in the scheme to defraud TRICARE. According to plea documents, Schaar admitted to soliciting physicians and other medical professionals to write prescriptions without seeing patients for medically unnecessary compounded medications dispensed by the pharmacy. According to the plea documents, Schaar further admitted to conspiring with others to falsify patient records to make it appear as though medical professionals had seen patients prior to the date prescriptions were written, when in reality, no examinations had occurred. As a result of the fraudulent prescriptions obtained by Schaar, and ultimately forwarded to the pharmacy, TRICARE reimbursed approximately $2.3 million in false and fraudulent claims submitted by the pharmacy. Sentencing for Schaar has been scheduled for October 17 before Judge Starrett.

This case was investigated by the FBI Jackson Division’s Hattiesburg Resident Agency, the IRS Criminal Investigation, the Defense Criminal Investigative Service, Health and Human Services Office of Inspector General, the Mississippi Bureau of Narcotics, and other government agencies. Trial Attorneys Dustin Davis and Katherine Payerle of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mary Helen Wall of the Southern District of Mississippi are prosecuting the case.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.