Memphis Area Man Pleads Guilty to Paying Kickbacks

LITTLE ROCK – A Memphis area man has pleaded guilty to paying kickbacks to generate sales of high-dollar compounded prescription drugs. Bradley Fly, 34, of Germantown, Tennessee, pleaded guilty on Wednesday before Chief United States District Judge Brian S. Miller. Cody Hiland, United States Attorney for the Eastern District of Arkansas, Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the FBI, and C.J. Porter, Special Agent in Charge of the Dallas Regional Office of the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG) announced the guilty plea.

Fly, a veteran of the medical sales industry based in Memphis, promoted high-dollar compounded prescription drugs on behalf of Brad Duke, who previously pled guilty to conspiring to violate the Anti-Kickback Statute last fall. Fly earned 35% of what insurers paid as commission. When Fly learned that TRICARE, the military health insurer, would pay tens of thousands of dollars per month per patient for compounded drugs, Fly concentrated his efforts on generating prescriptions for those beneficiaries covered by TRICARE.

Fly used subordinates to find TRICARE beneficiaries to receive the drugs. Among his subordinates were Individual 1 and Individual 2, who were both already TRICARE beneficiaries, as were their spouses. In violation of the Anti-Kickback Statute, Fly paid both Individual 1 and Individual 2 in exchange for agreeing to receive prescription compounded drugs for themselves and their spouses. TRICARE paid upwards of $500,000 for these prescriptions, earning Fly over $185,000 in commission.

If you or someone you know was approached about getting compounded prescription drugs, please contact usaare.TRICAREtips@usdoj.gov.

Violating the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), is punishable by up to five years imprisonment, a fine of not more than $250,000, and up to three years of supervised release. This case was investigated by the FBI and HHS-OIG, and prosecuted by Assistant United States Attorneys Alexander D. Morgan and Patrick C. Harris.

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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available online at
http://www.justice.gov/edar

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