Pharmacy Company’s Chief Compliance Officer Convicted in Medicare Fraud Scheme

A Florida man whose job it was to make sure that no healthcare fraud is committed recently was convicted by a federal jury of doing just that – committing Medicare fraud.

According to court documents and evidence presented at trial, Steven King of Miramar served as the chief compliance officer for a pharmacy holding company that fraudulently billed Medicare more than $50 million for dispensing lidocaine and diabetic testing supplies that Medicare beneficiaries did not need or want.

King was convicted of conspiracy to commit healthcare fraud and wire fraud. His sentencing is scheduled for Sept. 14, and he faces up to 20 years in prison.

Other co-conspirators included James Letko, 46, of Pittstown, New Jersey; Patricia Flannery, 40, of Hellertown, Pennsylvania; Katherine Peterson, 33, of Millford, New Jersey; and Rami Lazeki, 40, of Plymouth, Michigan, who were charged in an indictment filed Sept. 26, 2019.

King and his co-conspirators owned A1C Holdings LLC in Hollywood which held pharmacies in various states, including All American Medical Pharmacy in Warren, Michigan. Much of the criminal conduct took place in Michigan, although the activity spanned several other states as well, according to court documents. Other pharmacies were in Georgia, Kansas, Missouri, Tennessee, Texas, and Virginia.

King and his co-defendants hid their scheme in various ways including enrolling their mail-order pharmacies as brick-and-mortar retail locations to evade more rigorous oversight, shipping prescription refills for high-reimbursing medications and supplies without patient consent, concealing the ownership of A1C Holdings LLC and its pharmacies, and transferring patients among pharmacies without patient consent.

King and his co-conspirators took each of these steps to ensure that Medicare continued to be billed for profitable medications and supplies, according to prosecutors.

“As chief compliance officer, King was in a unique position to prevent and report the fraudulent scheme, but he used his position to defraud Medicare instead,†the U.S. Department of Justice said in a news release.

Letko pleaded guilty in August 2022 to the same count for which the jury in the U.S. District Court for the Eastern District of Michigan convicted King and is scheduled to be sentenced later this month.

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