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Published On: Wed, Dec 12th, 2018

Three Men Charged with Violating Federal Anti Kickback Laws

A grand jury returned an indictment today charging three men, including two physicians, with violations of the federal anti-kickback statute as well as conspiring to commit health care fraud, announced U.S. Attorney Trent Shores.

“Health care fraud is not a victimless crime. It has a costly effect on the taxpayer and beneficiaries enrolled in Medicare, TRICARE, and workers compensation coverage under the Federal Employees Compensation Act,” said U.S. Attorney Trent Shores. “The Justice Department will not stand idly by while physicians exploit federal programs designed to help American families. I encourage the public to report suspicious health care practices and billing to federal authorities. We will investigate and bring to justice those defrauding our system for their personal benefit.”

The criminal indictment alleges that since November 2012, Christopher Parks, 57, and Dr. Gary Lee, 58, both of Tulsa, engaged in a conspiracy to unlawfully pay kickbacks and bribes to physicians in order to induce the physicians to write compounding prescriptions to pharmacies with whom the two were affiliated, including OK Compounding LLC in Skiatook, One Stop RX LLC in Tulsa and NBJ Pharmacy LLC and Airport McKay Pharmacy, both in Houston. The defendants then allegedly submitted large claims for payment to federal health care programs and private insurers and divided the profits.

Dr. Jerry Keepers, 65, of Kingwood, Texas, is also named as a defendant in the indictment. He is charged with soliciting and receiving over $860,000 in illegal bribe and kickback payments from Parks and Lee and also conspiring with the two men to commit healthcare fraud.

Compounding prescriptions is a practice in which a pharmacist or physician combines, mixes or alters ingredients of a drug or multiple drugs to create a medication that is tailored to the specific needs of a patient. These medications are prescribed when standard Food and Drug Administration (FDA) approved drugs are unsuitable for the patient. They are also more expensive and reimbursed at a far higher rate by federal and private insurance companies. Compounded drugs are not to be mixed or marketed in bulk.

The indictment alleges physicians were provided pre-printed prescription pads that listed compounding formula choices. Participating physicians allegedly checked a box with their preferred selection and then faxed it directly to the associated pharmacies, rather than writing a prescription tailored to the patient who could then take it to a pharmacy of their choice.

Payments to physicians were disguised through various sham business arrangements, according to the indictment. For example, physicians would allegedly enter into agreements with a pharmacy to serve as “medical directors.” However, the physicians would provide no actual services as medical directors, according to the charges. Instead, physicians were allegedly paid kickbacks for writing prescriptions for medications whether or not their patients needed them and sending the prescriptions to pharmacies affiliated with Parks and Lee.  As a result of Parks and Lee’s scheme, federal health care programs suffered a total estimated loss of at least $4.7 million.

Conspiracy to violate the anti-kickback statute carries a possible maximum sentence of five years in prison and a $250,000 fine, while violating the anti-kickback statute carries up to 10 years in prison and a $100,000 possible fine. A conviction of health care fraud without injury or death carries also carries a possible maximum of 10 years in prison, but if resulting in injury or death, the maximum penalty climbs to 20 years or life in prison, respectively.

Assistant U.S. Attorneys Melody N. Nelson and Richard M. Cella are prosecuting the case.  The Defense Criminal Investigative Service, Department of Labor-Office of Inspector General (OIG), IRS – Criminal Investigation, U.S. Postal Service-OIG, FBI and the Department of Health and Human Services-OIG conducted the investigation.

An indictment is a formal accusation of criminal conduct, not evidence.

A defendant is presumed innocent unless convicted through due process of law.

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