EP doctor charged in $100 Million Tricare fraud scheme
An El Paso doctor is among the defendants charged in connection with a $100 million health care fraud conspiracy perpetrated against Tricare, the health insurance program for members of the military and their families.
Dr. William F. Elder-Quintana, 50, of El Paso, Texas, is named in a 35-count indictment along with other doctors, pharmacy owners, and marketers, said U.S. Attorney John Parker of the Northern District of Texas.
“Exhaustive investigative work by FBI and DCIS special agents and investigators led to the identification and seizure of millions in assets these defendants derived from their participation in this massive scheme,” said U.S. Attorney Parker.
The scheme caused the Tricare health insurance program to suffer more than $100 million in losses, Parker said.
“Fraud and abuse by pharmacies and medical providers that bill for compounded prescriptions and/or medications is a significant threat to the defense department’s health care system,” said Special Agent in Charge Janice M. Flores, of the DCIS Southwest Field Office.
The superseding indictment names the following defendants:
Dr. Walter Neil Simmons, 47, of Mesa, Arizona
Jeffrey Eugene Fuller, 51, of Dallas, Texas
Andrew Joseph Baumiller, 37, of Dallas, Texas
Jeffry Dobbs Cockerell, 61, of Houston, Texas
Steven Bernard Kuper, 43, of Burleson, Texas
Ravi Morisetty, 42, of Irving, Texas
Joe Larry Straw, 46, of Frisco, Texas
Luis Rafael Rios, 50, of Killeen, Texas
Michael John Kiselak, 49, of Southlake, Texas
Fuller and Baumiller are the the owner and president of Trilogy Pharmacy, federal officials said.
Two additional defendants charged in the conspiracy – 49-year-old Richard Robert Cesario, of Plano, Texas; and 47-year-old John Paul Cooper, of Southlake, Texas – remain in federal custody on related charges, officials said.
“The evidence shows that witnesses told investigators Copper and Cesario stated an intent to do possible harm to any associates or employees who turned on them and flee to Costa Rica if prosecuted, federal officials said in a news release.
The indictment alleges that from May 2014 to February 2016, the 12 defendants conspired to run a scheme to defraud Tricare in connection with the prescription of compounded pain and scar creams. The scheme involved the payment of kickbacks to Tricare beneficiaries, payment of kickbacks to prescribing physicians, and the payment of kickbacks to marketers by the owners of compounding pharmacies, federal officials said.
Cesario and Cooper co-owned and co-operated CCMGRX, limited liability company formed in September 2014 that had its principal place of business at 5050 Quorum Drive in Dallas.
CMGRX primarily marketed compounded pain and scar creams to current and former U.S. military members and their families on behalf of various compounding pharmacies.
Investigators said CMGRX’s principle marketing tool was a “sham medical study through which individuals were paid monetary compensation in exchange for obtaining compounded drugs with their Tricare prescription benefits.”
Cesario served as CMGRX’s CEO and Treasurer and Cooper served as its President and Secretary. Neither had any medical, nursing or pharmaceutical licensing or education, officials said.
Straw and Kiselak led marketing groups for CMGRX that allegedly recruited military members and their families and offered them monetary compensation in exchange for obtaining compounded drugs with their prescription benefits.
Rios, a marketer and patient recruiter in Straw’s marketing group, allegedly recruited hundreds of beneficiaries on and around Fort Hood in Killeen, Texas.
According to the indictment, Cesario, Cooper, Straw, Rios, Kiselak and their co-conspirators offered to pay, and did pay, Tricare beneficiaries for obtaining and filling prescriptions for compounded drugs, principally compounded pain creams, scar creams, migraine creams, and vitamins.
They allegedly disguised these payments to Tricare beneficiaries as “grants” for participating in a medical study they referred to as a Tricare-approved “Patient Safety Initiative” or “PSI Study” to evaluate the safety and efficacy of compounded drugs.
Investigators said the PSI Study was not approved by Tricare and was not overseen by a qualified physician or medical professional.
Cesario and Cooper allegedly created a charity and funneled payments to the beneficiaries through the the “Freedom From Pain Foundation” in an effort to disguise the source of those kickbacks, federal officials said.
Simmons allegedly served as the Chief Medical Officer for CMGRX and helped Cesario and Cooper create the PSI Study.
El Pasoan Elder-Quintana worked as a contract physician with CMGRX and Cesario and Cooper allegedly paid him to prescribe compounded drugs to Tricare beneficiaries. Some of the payments were made directly to Elder, while others were made to Aztec Medicus, PLLC, a company he owned and controlled, federeal officials said.
Elder-Quintana allegedly wrote thousands of prescriptions for compounded drugs to Tricare beneficiaries who he never met in person and for whom he conducted only a cursory consultation via telephone.
Each defendant is charged with one count of conspiracy to commit health care fraud, which, upon conviction, carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine.
Cesario and Cooper are also each charged with 14 counts of payment and/or receipt of illegal remuneration.
Each of the remaining defendants, with the exception of Simmons, is charged with at least one count of payment and/or receipt of illegal remuneration.
The maximum statutory penalty, upon conviction for each of those counts is five years in federal prison and a $250,000 fine. Restitution may also be ordered.
