Four men and seven companies have been charged in connection with a $1 billion healthcare scam, according to the Department of Justice.
Andrew Assad, Peter Bolos, Michael Palso, and Larry Everett Smith, all of Florida, have been charged with conspiracy to commit healthcare fraud, mail fraud, and introducing misbranded drugs into interstate commerce. The compounding pharmacies owned by the men were also named in the indictment. In September, Healthright, a telemedicine company with locations in Pennsylvania and Florida, and Scott Roix, CEO of Healthright, pleaded guilty to their role in the scam. Roix and Healthright also pleaded guilty to conspiring to commit mail fraud in a separate scam for fraudulently telemarketing supplements, skin creams and testosterone.
According to the justice department, between June 2015 and April 2018, the conspirators and others conspired to deceive tens of thousands of patients and more than 100 doctors across the country for the purpose of scamming private healthcare benefit programs. The indictment alleges that the conspirators submitted at least $931 million in fraudulent insurance claims.
Authorities say the defendants set up an elaborate scam in which HealthRight fraudulently solicited insurance coverage information and prescriptions from consumers for prescription pain creams and similar products. Doctors approved the prescriptions without knowing that the defendants were “massively marking up the prices of the invalidly prescribed drugs,” according to the Justice Department. The defendants then billed the fraudulent prescriptions to insurance carriers.
If convicted, Assad, Bolos, Palso and Smith each face up to 20 years in prison for each mail fraud charge, up to 10 years for conspiracy, and up to three years for introducing misbranded drugs into interstate commerce. They also face fines of up to $250,000 and up to three years of supervised release for each count. The companies named in the indictment face fines of up to twice the gross loss sustained as a result of the scam. The indictment also seeks the forfeiture of about $154 million.
