Terre Haute Man Charged with Health Care Fraud and Money Laundering

TERRE HAUTE, IN—Joseph H. Hogsett, United States Attorney, announced today that John D. Love, Brazil, Ind., was charged with health care fraud and money laundering following an investigation by the Health and Human Services, Office of Inspector General (HHS), The Internal Revenue Service (IRS), the Federal Bureau of Investigation (FBI), and Indiana Attorney General Greg Zoeller’s Medicaid Fraud Enforcement Unit (MFCU). The Information alleges that beginning on or about January 1, 2006, and continuing through September 2010, John Love, a pharmacist and controlling member of the Terre Haute Prescription Shop, used his position at the pharmacy to carry out a scheme to defraud the Indiana Medicaid Program.

Love submitted claims to the Indiana Medicaid Program for prescriptions that were never given to patients. Love used his access and knowledge of the THPS computer system to input false prescriptions into the THPS’s computer billing system, which would then bill the Indiana Medicaid Program for the fraudulent claim. As soon as the computer system submitted the claim for the prescription to the Indiana Medicaid Program, Love would access the computer system again and void the prescription before any other employee of THPS could notice a record for a prescription that was never filled or dispensed.

As part of his scheme, the information further alleges Love billed the Indiana Medicaid Program for prescription drugs significantly in excess of what THPS had ever ordered, for example:

• Love billed the Indiana Medicaid Program for 1,317.4 units of the prescription drug Aranesp and received a total of $1,677,554.50. During the same time period, THPS only ordered six units of Aransep at a cost of $5,188.36.
• Love billed the Indiana Medicaid Program for 172 units of the prescription drug Copaxone and received a total of $236,989.54. During the same time period THPS only ordered 20 units of Copaxone at a cost of $29,265.87.
• Love billed the Indiana Medicaid Program for 660 units of the prescription drug Epogen and received a total of $126,732.80. During the same time period, THPS only ordered ten units of Epogen at a cost of $2,545.69.
• Love billed the Indiana Medicaid Program for 588 units of the prescription drug Humira and received a total of $429,959.82. During the same time period, THPS only ordered 98 units of Humira at a cost of $62,693.53.
• Love billed the Indiana Medicaid Program for 1,488 units of the prescription drug Procrit and received a total of $615,612.23. During the same time period, THPS only ordered 22 units of Procrit at a cost of $6,366.40.
• Love billed the Indiana Medicaid Program for 2,630 units of the prescription drug Sandostatin and received a total of $343,334.58. During the same time period, THPS did not order any units of Sandostatin.

As a result of Love’s fraudulent acts, the Indiana Medicaid Program paid THPS $3,575,699.73 for prescriptions that were never provided to patients. These funds were deposited into the main business account of THPS. Using his control of THPS, Love used at least $3,000,000 of the fraudulent proceeds to purchase, in whole or in part, four parcels of real estate; fifteen vehicles, including five Harley Davidson motorcycles, a Chevrolet Corvette, and a Cadillac Escalade; a destination wedding for one of his children in Destin, Florida; and numerous other personal expenses. The money laundering charges concern the purchase of one Harley Davidson motorcycle and the destination wedding.

U.S. Attorney Hogsett stated, “The United States Attorney’s Office will continue to aggressively prosecute Medicaid fraud. Individuals who, through their own greed, take benefits intended to serve the neediest citizens, will be investigated and prosecuted to the fullest extent of the law.”

“Health Care Fraud is a serious problem in Indiana and is vigorously investigated by the Federal Bureau of Investigation and our law enforcement partners. The FBI will continue to use a wide-array of investigative techniques to recover taxpayer dollars and root out those who corrupt the health care system,” said Michael Welch, Special Agent in Charge of the Federal Bureau of Investigation.

“The charges brought today against Mr. Love clearly serve as a warning that federal and state governments are tightly coordinating the investigation and prosecution of Medicaid fraud,” said Lamont Pugh III, Special Agent in Charge of the Chicago Region of the U.S. Department of Health and Human Services, Office of Inspector General. “Criminals who would line their pockets at the expense of tax payers and vulnerable patients can expect both federal and state authorities to be in hot pursuit.”

Al Patton, Special Agent in Charge of the IRS said, “IRS Criminal Investigation has the financial investigators and expertise that is critical in locating the money. We work closely with our partners in law enforcement and our partners at the United States Attorney’s Office to ensure the defendants are brought to justice.”

“For a pharmacist to bill the taxpayers millions of dollars for prescription drugs that doctors never ordered and patients never received is a brazen abuse of the Medicaid system. The Attorney General’s Medicaid Fraud Control Unit collaborates closely with our federal colleagues to unravel such schemes so that those who try to game the system will be held accountable,” Indiana Attorney General Greg Zoeller said.

As part of the investigation, federal authorities seized five Harley Davidson motorcycles, two sports cars (a Corvette and a Mustang), four sport utility vehicles, two pickup trucks, one four-wheeler RV and trailer, and funds from multiple bank accounts. The government will be seeking forfeiture of these and other assets.

According to Assistant U.S. Attorney Bradley P. Shepard, who is prosecuting the case for the government, Love faces a maximum of 10 years in prison and a $250,000 fine. An initial hearing will be scheduled for an initial appearance and arraignment in Terre Haute before a U.S. Magistrate Judge.

An information is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.