Mother Sentenced to 120 Months in Prison, Son Sentenced to 30 Months in Prison for Involvement in $9.5 Million Pharmacy Fraud

A mother and son based in Miami were sentenced today to 120 months and 30 months in prison, respectively, for their roles in spearheading a $9.5 million health care fraud conspiracy that targeted Medicare Part D.  

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.

Niurka Fernandez, 54, and Roberto Alvarez, 26, each pleaded guilty on Aug. 31 to one count of conspiracy to commit health care fraud.  In addition to imposing today’s prison sentences, U.S. District Judge Federico A. Moreno of the Southern District of Florida ordered Fernandez to pay $9.5 million in restitution and to forfeit the same amount.  Judge Moreno also ordered Alvarez t to pay $1.5 million in restitution and to forfeit the same amount.

As part of her guilty plea, Fernandez admitted that she co-owned and operated several pharmacies in the Miami area, including Calan Pharmacy & Discount Service LLC (Calan Pharmacy) and Bertyann Corp., doing business as Best Pharmacy, for the purpose of submitting false and fraudulent claims through Medicare Part D.  Fernandez was an organizer and leader of the Medicare fraud scheme that paid Medicare beneficiaries and patient recruiters for prescriptions that were medically unnecessary, according to the plea agreement.  Fernandez further acknowledged that she directed her co-conspirators at Calan Pharmacy and Best Pharmacy to make kickback payments and write and cash checks for the purpose of facilitating kickback payments and concealing fraud proceeds.  Fernandez is also linked to several other Medicare fraud schemes.  

As part of his guilty plea, Alvarez admitted that he participated in the Medicare fraud conspiracy at Best Pharmacy.  Among other things, Alvarez admitted he wrote checks from Best Pharmacy to money launderers in order to obtain cash to pay the kickbacks to the Medicare beneficiaries.

In her plea documents, Fernandez admitted that she caused at least $9.5 million in losses to Medicare, while Alvarez conceded he caused a loss of at least $1.5 million.  In total, Medicare paid at least $9.5 million in overpayments as a result of the health care fraud scheme.
            
The FBI, U.S. Secret Service and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Florida.  Fraud Section Trial Attorneys L. Rush Atkinson and Lisa H. Miller prosecuted the case.  

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,900 defendants who have collectively billed the Medicare program for more than $10 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.