A pharmaceutical marketer has been ordered to pay more than $59 million in restitution and was sentenced to nearly two-and-a-half years behind bars for his role in a $92 million compound medication fraud case.
Eight Charged in Original Healthcare Fraud Case
According to the superseding indictment filed in May 2020, Quintan Cockerell of California worked with seven others to create and market compound medications. These expensive and custom-made drugs are supposed to be tailored to a patient’s specific needs based on medical necessity.
The alleged compound medication fraudcrimes took place from May 2014 to September 2016 and involved TRICARE and DOL beneficiaries. TRICARE is a federal health insuance program for military members and veterans and their families. The original case was filed in 2018.
The Allegations
Cockerell and the others are alleged to have used preloaded prescription pads that identified the high-billing formulations for doctors to easily select. He and his co-conspirators at the compounding pharmacy created “standing orders” that allowed the pharmacy to swap out ingredients in the medications originally prescribed by doctors to maximize insurance reimbursements.
Cockerell and the others involved in this compound medication fraud scheme, then recruited doctors and paid them kickbacks to write prescriptions for these expensive compounded medications by creating “investment opportunities” so that doctors who wrote prescriptions to the pharmacy could profit from pharmacy operations in violation of the federal anti-kickback statute.
Cockerell and others also took doctors on expensive and lavish trips.
Prosecutors contended that the defendants’ goal, was to “improperly influence those who make healthcare decisions on behalf of patients.” Much of the money used to pay kickbacks came from TRICARE, according to court documents.
The Other Defendants
Other defendants in the compound pharmacy fraud case include:
Richard Hall, owner and part of the sales and marketing group at Rxpress Pharmacy and Xpress Compounding located in Fort Worth, Texas. He previously was sentenced to four years and four months in prison and ordered to pay over $59 million in restitution for paying illegal kickbacks and engaging in a money laundering conspiracy.
Scott Schuster was owner, board member and part of the sales and marketing group at Rxpress Pharmacy and Xpress Compounding. He previously pleaded guilty to conspiracy to defraud the United States.
Dustin Rall was owner, board member and part of the sales and marketing group at Rxpress Pharmacy and Xpress Compounding. He previously pleaded guilty to conspiracy to launder monetary instruments.
George Lock Paret was the pharmacist in charge at Rxpress Pharmacy and Xpress Compounding. He previously pleaded guilty to conspiracy to defraud the United States.
Michael Ranelle was a marketer for Rxpress Pharmacy and Xpress Compounding and an owner of Universal Triumph Medical Supply, LLC. Ranelle previously pleaded guilty to one count of conspiracy to defraud the United States and pay and receive kickbacks.
John Le was vice president of finance for Rxpress Pharmacy and Xpress Compounding and oversaw the payment of commissions to marketers for both.
Turner Luke Zeutzius was a marketer for Rxpress Pharmacy and Xpress Compounding. He, along with Schuster and Rall, were owners and operators of Tactical Health Care Partners which recruited TRICARE beneficiaries and marketed compound medications filled at and billed by Rxpress Pharmacy and Xpress Compounding. Tactical received commission payments from Rxpress Pharmacy. Zeutzius previously pleaded guilty to one count of conspiracy to defraud the United States and pay and receive kickbacks.
Rxpress and Xpress were separate in name only; Rxpress Pharmacy and Xpress Compounding employed the same staff, operated out of the same building and used a call center to direct prescriptions depending on whether the prescriptions were for private or federal insurance, according to a news release.
Defendants Paid Illegal Kickbacks
The superseding indictment alleges that as a result of the healthcare fraud scheme, one of the compounding pharmacies paid Cockerell approximately $2.4 million, Zeutzius approximately $7.6 million and Ranelle approximately $4.1 million in illegal kickbacks, for a total of approximately $14.1 million in illegal kickbacks.
Six of eight original defendants named in the indictment cut deals with the government and even testified in some of the other cases.
According to court documents although about 3,000 doctors used the defendants’ pharmacies, 50 produced more than half of the pharmacies’ total income. Some doctors wrote more than 75 prescriptions in a single day, according to court records.
Compound Medication Fraud Rampant
As far back as 2015, The Health Law Offices of Anthony C. Vitale, which specializes in healthcare fraud law, has been writing about the feds cracking down on compounding pharmacy fraud.
Other stories we have published focusing on the compound medication fraudcrackdown include:
- Three Sentenced for Roles in Compounding Pharmacy Kickback and Fraud Scheme
- Pharmacists, Pharmacy Owners, and Doctors Sentenced in Texas Compounding Pharmacy Healthcare Fraud Scheme
- Compounding Pharmacies to Pay $6.8M in Prescriptions-for-Money Scam
- TRICARE Billing Scandal Intensifies as Feds Target More Compounding Pharmacies
- Feds Step-up Crackdown on Fraudulent Billing for Compounded Meds
- October a Big Month for Anti-Kickback Cases Involving Compounding Pharmacies
- Florida Men Charged in $54M Pharmacy Fraud Case
- Surgeon Sentenced in Compound Medication Kickback Scheme
- Compounding Pharmacies to Pay $6.8M in Prescriptions-for-Money Scam
How We Can Help
Healthcare fraud investigations involve complex healthcare and pharmacy matters requiring legal counsel with knowledge and experience in TRICARE and healthcare law. Those involved in the industry would be well advised to educate themselves about best practices.
The Health Law Offices of Anthony C. Vitale is well-versed in all areas of healthcare law and can assist you. For more information call us at 305-358-4500 or email us at info@vitalehealthlaw.com.
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