Husband and Wife Plead Guilty to $65 Million TRICARE Fraud

NEWS RELEASE SUMMARY – July 28, 2023

SAN DIEGO - Jimmy and Ashley Collins, a married couple living in Birchwood, Tennessee, pleaded guilty in federal court today, admitting that they participated in a health care fraud scheme that bilked TRICARE – the health care program that covers United States service members –out of more than $65 million.

The couple admitted they worked with others to recruit TRICARE beneficiaries who were willing to sign up to receive expensive compounded medications, even though the beneficiaries did not really need the medications. The beneficiaries’ information was sent to Choice MD, a Tennessee medical clinic co-owned and operated by the Collinses. Doctors and medical professionals employed by the Collinses at Choice MD, including Dr. Susan Vergot, Dr. Carl Lindblad, and nurse practitioner Candace Craven, then wrote prescriptions for the TRICARE beneficiaries, despite never conducting a medical review or examination of the patients in person. Once signed by the doctors, these prescriptions were not given to the straw beneficiaries, but sent directly to The Medicine Shoppe, a pharmacy in Bountiful, Utah, which filled the prescriptions and received massive reimbursement from TRICARE.

Between December 2014 and May 9, 2015 – the day that TRICARE stopped reimbursing for compounded medications – the doctors working for the Collinses at Choice MD authorized 4,442 prescriptions and billed TRICARE $65,679,512 for these prescriptions.

The owners of The Medicine Shoppe then paid kickbacks to the Collinses based on a percentage of the TRICARE reimbursement paid for the prescriptions referred by the Collinses’ recruiter network. Between February and July 2015, these kickback payments to the Collinses totaled at least $45.7 million dollars. The Collinses, in turn, paid kickbacks to the recruiters working as part of their network, including defendants Josh Morgan, Kyle Adams, and Daniel Castro, among others.

The United States has seized property and items purchased by the Collinses and others with the proceeds of the scheme. Included among these items is an 82-foot yacht; multiple luxury vehicles, including two Aston-Martins; a multimillion-dollar investment annuity; dozens of pieces of farm equipment and tractor-trailer trucks; and three pieces of Tennessee real estate.

The Collinses are the last members of the conspiracy to plead guilty. The doctors and nurse practitioner who prescribed these unnecessary prescriptions, the corporate owner of the pharmacy that filled these unneeded prescriptions, and the patient recruiters have all pleaded guilty for their roles in the conspiracy to commit healthcare fraud and admitted their roles in this fraudulent scheme.

“The scheme alleged in this case resulted in massive losses to a taxpayer-funded healthcare program meant to help members and veterans of our armed forces,” said U.S. Attorney Randy Grossman. “The days of yachts and luxury cars are gone. With these guilty pleas, we are holding these defendants accountable for their crimes.” Grossman thanked the prosecution team and investigating agencies for their excellent work on this case.

“The Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS) is committed to protecting the integrity of TRICARE, the health care system for our military members and their families,” said Special Agent-in-Charge Michael C. Mentavlos of the DCIS Southwest Field Office. “Today's outcome demonstrates our unwavering commitment to hold accountable those that perpetrate fraud against TRICARE and put its beneficiaries at risk.”

“Mr. and Mrs. Collins operated a TRICARE scheme that defrauded the American taxpayer of more than $65 million in healthcare resources that should have been directed to service members, retirees, and their dependents,” said Special Agent in Charge Greg Gross of the NCIS Economic Crimes Field Office. “This guilty plea should serve as a warning that NCIS and our partners are dedicated to rooting out fraud that harms the military community.”

Jimmy and Ashley Collins are scheduled to be sentenced on October 27 at 9 a.m. before U.S. District Judge Janis L. Sammartino.

DEFENDANTS                                 Case Numbers: 18-CR-1850-JLS, 18-CR-1855-JLS

Jimmy Collins                                     Age: 59                       Birchwood, TN

Ashley Collins                                    Age: 37                       Birchwood, TN

SUMMARY OF CHARGES

Jimmy Collins:

Receipt of Illegal Remuneration, in violation of 42 U.S.C. §1320(a)-7b(b)(1)(A)

Maximum penalty: Ten years in prison and $100,000 fine or double loss amount, whichever is greater

An order of restitution requiring defendant to repay at least $65,679,512.71 to DHA/TRICARE

Ashley Collins:

Conspiracy, in violation of 18 U.S.C. § 371

Maximum penalty: Five years in prison and $250,000 fine or double loss amount, whichever is greater

An order of restitution requiring defendant to repay at least $65,679,512.71 to DHA/TRICARE

AGENCY

Defense Criminal Investigative Service

Naval Criminal Investigative Service

IRS Criminal Investigation Division, Gulfport, MS

Federal Bureau of Investigation - Jackson, MS Field Office