Miami, Florida — A Georgia man was sentenced yesterday to over 11 years in federal prison for defrauding Tricare of approximately $12 million through a South Florida compounding pharmacy fraud scheme. Tricare is the health care benefit program covering military personnel and their dependents.
According to court documents, 51-year-old Erik Santos and his co-conspirators ran the scheme as follows: Santos paid recruiters to convince Tricare beneficiaries to fill prescriptions for expensive, supposedly tailor-made, compounded medications that the beneficiaries did not need. Santos paid doctors to approve pre-printed prescriptions for large amounts of these medications. The doctors did not see the beneficiaries or otherwise consider their medical needs before approving the prescriptions. Lastly, Santos steered the Tricare beneficiaries to fill their prescriptions with Patient Care America (PCA), a compounding pharmacy located in Broward County, Florida. PCA would bill Tricare for expensive drug formulations that had little to no therapeutic value. Many of the compounded medications were billed to Tricare at $10,000 to $15,000 for a month’s supply, even though the ingredients used in the mixtures were little more than common pain or scar creams. Santos’s fraudulent referrals caused an actual loss to the Tricare program of approximately $12 million. PCA pharmacy paid Santos over $7 million in prescription referral kickbacks.
In addition to the prison sentence, the Court imposed restitution in the amount of $11.8 million and entered a forfeiture judgement of approximately $7.6 million. On January 27, 2021, Santos pled guilty in federal district court in Ft. Lauderdale to one count of conspiring to commit health care fraud and wire fraud.
Acting U.S. Attorney Juan Antonio Gonzalez of the Southern District of Florida, Special Agent in Charge Cynthia A. Bruce of the Defense Criminal Investigative Service (DCIS), Southeast Field Office, and Special Agent in Charge George L. Piro of FBI Miami announced the sentence.
“Criminals steal exorbitant amounts of money from our government health programs through prescription medication fraud schemes. This significant sentence recognizes the seriousness of the crime,” said Acting U.S. Attorney Gonzalez. “Those who use kickbacks and other illegal activity to bilk taxpayer dollars from vital public programs will be held accountable.”
“Billing healthcare programs for medically unnecessary medications not only undermines the viability of those programs, it exploits all citizens,” said DCIS Special Agent in Charge Bruce. “I am pleased with the significant outcome of this investigation and would like to thank the U.S. Attorney’s Office and the investigative team for their tireless effort and great work to hold accountable those who fraudulently bill the Defense Health Agency.”
“Illegal kickbacks undermined the integrity of the Tricare health benefit program by putting profits in front of patient welfare,” said FBI Special Agent in Charge Piro. “The investigators who unraveled this scam are to be commended for their diligence and commitment. The FBI and our partners will continue to pursue those individuals who pay kickbacks and fraudulently bill for medical services that are not necessary.”
DCIS investigated the case with assistance from FBI Miami, and the Food and Drug Administration-Office of Criminal Investigation. The superseding indictment also named CHAMPVA (the Department of Veterans Affairs’ version of Tricare) as a fraud target and the Department of Veterans Affairs-Office of Inspector General assisted with the investigation.
Assistant U.S. Attorney Jon Juenger prosecuted the case. Assistant U.S. Attorney Daren Grove is handling the asset forfeiture component of the case.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov, under case number 20-cr-60089.
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