Five New Guilty Pleas In Nationwide Telemedicine Pharmacy Health Care Fraud Conspiracy

GREENEVILLE, Tenn.– Today, Larry Everett Smith, 50, of Tampa, Florida, pleaded guilty before Senior District Judge Ronnie Greer to one count of conspiracy to commit health care fraud. Sentencing has been set for October 25, 2021 at 3:00 p.m., in United States District Court in Greeneville. Smith faces a term of up to 10 years in prison. 

The First Superseding Indictment, returned December 1, 2020, charged Smith and others with a nationwide conspiracy to defraud pharmacy benefit managers out of $174,202,105 by submitting $931,356,936 in bills to the pharmacy benefit managers for fraudulent prescriptions purchased from a telemarketing company. The indictment alleges the conspiracy began in mid-2015 and lasted through the first months of 2018. 

In a written plea agreement, Smith admitted to conspiring with Scott Roix, Mihir Taneja, Arun Kapoor, Sterling-Knight Pharmaceuticals LLC, HealthRight LLC, Alpha-Omega Pharmacy LLC, Germaine Pharmacy Inc., Zoetic Pharmacy, and Tanith Enterprises, and others to defraud pharmacy benefit managers into paying for fraudulent prescriptions for topical pain creams, vitamins, and other products. Smith agreed to pay restitution of $24,919,254 and forfeit approximately $3,052,215.

On September 26, 2018, Roix and HealthRight pleaded guilty to conspiracy to commit health care fraud for their roles in the scheme and agreed to pay restitution of $5,000,000. Roix faces a term of up to 10 years in prison. Sentencing for Roix is set for October 25, 2021. 

Smith’s guilty plea follows pleas by Mihir Taneja, Arun Kapoor, Maikel Bolos, and Sterling-Knight Pharmaceuticals in December 2020. In those plea agreements, Taneja, 46, of Tampa, Florida, and Kapoor, 47, of Temple Terrace, Florida, pleaded guilty to felony mis-branding.  Maikel Bolos, 35, of Tampa, Florida, pleaded guilty to conspiracy to commit health care fraud and mail fraud, and Sterling-Knight Pharmaceuticals, a Nevada company operated out of Tampa, Florida, pleaded guilty to conspiracy to commit health care fraud. Taneja, Kapoor, and Sterling-Knight agreed to pay restitution of $20,981,786. Sterling-Knight also agreed to forfeit $6,168,398. Taneja and Kapoor, each, face a term of up to 3 years in prison. Bolos faces a term of up to 5 years in prison. Sentencing for Taneja, Kapoor, Bolos, and Sterling-Knight is set for October 18, 2021. 

“The protection and integrity of our health care programs are vital to the citizens they serve. Many Tennesseans rely on these health care programs to maintain a healthy quality of life, and it is critical we protect the viability of these programs,” said U.S. Attorney J. Douglas Overbey.

“Telemarketing fraud is a major threat to the integrity of government and commercial insurance programs,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “After improperly soliciting patient information, these marketing companies obtained approvals through contracted telemedicine prescribers, then sold those costly prescriptions to pharmacies in exchange for kickbacks.”

“Health care fraud can affect everyone, and Homeland Security Investigations (HSI) is committed to stopping these criminals in their tracks,” said HSI Tampa acting Special Agent in Charge Kevin Sibley. “This investigation highlights the importance of law enforcement partnerships across the nation and around the world.”

“The U.S. Office of Personnel Management Office of the Inspector General is committed to protecting the federal health care programs from schemes that undermine the integrity of the program,” said Norbert E. Vint, Deputy Inspector General Performing the Duties of the Inspector General. “I am very proud of our investigative staff and partners at the Department of Justice for their hard work on behalf of American taxpayer.”

“Today’s announcement demonstrates that companies and individuals who place profits above patient safety will be held accountable for their actions,” said Special Agent in Charge Justin C. Fielder, FDA Office of Criminal Investigations Miami Field Office. “We will continue to work with the Department of Justice and our law enforcement partners to bring to justice those who jeopardize the U.S. public health.”

“Health care fraud is a severe crime problem that impacts every American. The FBI, with its law enforcement partners, will continue to allocate resources to investigate these crimes and prosecute those that are intent on defrauding the health care system,” said Special Agent in Charge Joseph Carrico of the FBI Knoxville Field Office.

The trial of the remaining defendants will commence July 13, 2021, in the district court in Knoxville, Tennessee. 

The prosecution and plea agreements were coordinated by Assistant U.S. Attorneys TJ Harker, Mac Heavener, Anne-Marie Svolto, and Gretchen Mohr of the U.S. Attorney’s Office for the Eastern District of Tennessee, and Trial Attorney David Gunn of the Department’s Consumer Protection Branch. Assistant U.S. Attorneys TJ Harker and Mac Heavener, and Trial Attorney David Gunn will try the matter for the government and represent the government at court proceedings. 

These plea agreements resulted from a multi-year investigation conducted by the U.S. Department of Health & Human Services Office of Inspector General (Nashville); Food and Drug Administration Office of Criminal Investigations (Nashville); U.S. Postal Service, Office of Inspector General (Buffalo, New York); Federal Bureau of Investigation (Knoxville and Johnson City, Tennessee); Office of Personnel Management Office of the Inspector General (Atlanta); and the Department of Homeland Security, Homeland Security Investigations (Tampa). The U.S. Marshals Service also assisted in the investigation and the forfeiture of assets.

The case is United States v. Andrew Assad et al (2:18-CR-140).  Related cases are United States v. Mihir Taneja (2:20-CR-111), United States v. Arun Kapoor (2:20-CR-110), United States v. Sterling-Knight Pharmaceuticals LLC (2:20-CR-113), United States v. Maikel Bolos (2:20-CR-112), and United States v. Scott Roix and HealthRight LLC (2:18-CR-133). 

https://www.justice.gov/usao-edtn/pr/four-men-and-seven-companies-indicted-billion-dollar-telemedicine-fraud-conspiracy;

https://www.justice.gov/usao-edtn/pr/telemarketer-and-his-companies-agree-pay-25-million-settle-allegation-they-operated

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