Tag Archives: Katherine Payerle

Nurse Practitioner and Physician Indicted in Compounding Pharmacy Fraud Schemes

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Tuesday, October 24, 2017

A Mississippi-based nurse practitioner was charged in an indictment unsealed today for her role in a multi-million dollar scheme to defraud TRICARE, the health care benefit program serving U.S. military, veterans and their respective family members.  A Mississippi-based physician was charged in a separate indictment filed last week for his role in a similar scheme.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, U.S. Attorney Mike Hurst of the Southern District of Mississippi, Special Agent in Charge Christopher Freeze of the FBI’s Jackson, Mississippi Field Division and Special Agent in Charge Jerome R. McDuffie of the Internal Revenue Service Criminal Investigation (IRS-CI) New Orleans Field Office made the announcement.

Susan Perry N.P., 58, of Grand Bay, Alabama, and Albert Diaz M.D., 78, of Ocean Springs, Mississippi, were charged in separate indictments returned on Oct. 18, in the Southern District of Mississippi, in Hattiesburg.  Perry’s indictment was unsealed upon her arrest and initial appearance today before U.S. Magistrate Judge John Gargiulo of the Southern District of Mississippi.  Perry is scheduled to be arraigned on Oct. 25, at 10:30 a.m., and Diaz is scheduled to be arraigned on Nov. 1, at 10:30 a.m., both before Judge Gargiulo.

Perry was charged in a 13-count indictment with one count of conspiracy to commit health care fraud and wire fraud, four counts of wire fraud, one count of conspiracy to distribute and dispense a controlled substance, one count of distributing and dispensing of a controlled substance, one count of conspiracy to solicit and receive healthcare kickbacks, four counts of soliciting and receiving healthcare kickbacks and one count of making false statements.  Diaz was charged in a 16-count indictment with one count of conspiracy to commit health care fraud and wire fraud, four counts of wire fraud, one count of conspiracy to distribute and dispense a controlled substance, four counts of distributing and dispensing a controlled substance, one count of conspiracy to falsify records in a federal investigation and five counts of falsification of records in a federal investigation.

The indictments allege that both Perry and Diaz participated in schemes to defraud TRICARE by prescribing medically unnecessary compounded medications, some of which included Ketamine, a controlled substance, to individuals they had not examined, for the purpose of having a Hattiesburg-based compounding pharmacy dispense these medically unnecessary compounded medications and to seek reimbursement from TRICARE.  According to the indictments, between February 2013 and October 2016, TRICARE reimbursed the compounding pharmacy more than $3.3 million for compounded medications prescribed by Perry, and between October 2014 and December 2015, TRICARE reimbursed the compounding pharmacy more than $2.3 million for compounded medications prescribed by Diaz.  Additionally, Perry is alleged to have received more than $50,000 in kickback payments from a marketer for the compounding pharmacy in return for prescribing the compounded medications, as well as having made false statements to the FBI.   Diaz is alleged to have submitted falsified patient records in response to an audit conducted by TRICARE to make it appear as though he had examined patients before prescribing the compounding medications.

An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The FBI, IRS-CI, the Defense Criminal Investigative Service, the U.S. Department of Health and Human Services Office of Inspector General, the Mississippi Bureau of Narcotics and other government agencies investigated the case.  Trial Attorneys Dustin M. Davis, Katherine Payerle and Jared Hasten 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.

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

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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.

Clinical Psychologist and Owner of Psychological Services Centers Sentenced to 264 Months for Roles in $25 Million Psychological Testing Scheme Carried out Through Eight Companies in Four States

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Friday, July 14, 2017

Two owners of psychological services companies, one of whom was a clinical psychologist, were sentenced yesterday for their involvement in a $25.2 million Medicare fraud scheme carried out through eight companies at nursing homes in four states in the Southeastern U.S.

The announcement was made by Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Duane A. Evans of the Eastern District of Louisiana, Special Agent in Charge Jeffrey S. Sallet of the FBI’s New Orleans Field Office and Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Regional Office.

Rodney Hesson, 47, of Slidell, Louisiana, and Gertrude Parker, 63 of Slidell, Louisiana, were sentenced on July 13, to 180 months’ imprisonment and 84 months’ imprisonment by U.S. District Court Judge Carl J. Barbier of the Eastern District of Louisiana. Judge Barbier also ordered Hesson to pay $13,800,553.57 in restitution, and ordered Parker to pay $7,313,379.75 in restitution. The defendants were each convicted of one count of conspiracy to commit health care fraud and one count of conspiracy to make false statements related to health care matters on January 24.

According to evidence presented at trial, Hesson and Parker’s companies, Nursing Home Psychological Services (NHPS) and Psychological Care Services (PCS), respectively, contracted with nursing homes in Alabama, Florida, Lousiana and Mississippi to allow NHPS and PCS clinical psychologists to provide psychological services to nursing home residents. Hesson and Parker caused these companies to bill Medicare for psychological testing services that these nursing home residents did not need or in some instances did not receive, the trial evidence showed. During trial, evidence was entered showing that between 2009 and 2015, NHPS and PCS submitted over $25.2 million in claims to Medicare, the vast majority of which were fraudulent, while Medicare paid more than $13.5 million on the fraudulent claims. The jury verdict included a money judgment of $8,956,278, as well as forfeiture of Hesson’s home and at least $525,629 in seized currency.

The case was investigated by the FBI and HHS-OIG, and brought by the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Louisiana. The case is being prosecuted by Senior Litigiation Counsel John Michelich and Trial Attorneys Katherine Raut and Katherine Payerle of the Fraud Section.

The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 3,000 defendants who collectively have billed the Medicare program for over $11 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.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.