HATTIESBURG, MS (WDAM) - A pair of men pleaded guilty to their roles in a multi-million-dollar compounding pharmacy health care fraud conspiracy.
Jason May and Gerald Jay Schaar both pleaded guilty Tuesday in federal court before U.S. District Judge Keith Starrett as a result of the largest ever national health care fraud enforcement action by the Medicare Fraud Strike Force.
May, 40, of Lamar County, pleaded guilty to conspiracy to commit health care fraud and money laundering Tuesday afternoon in Hattiesburg in connection with his role as co-owner and pharmacist in charge of Advantage Pharmacy, which received approximately $192 million in reimbursements from TRICARE and other health care benefit programs for compound topical creams.
According to the Criminal Information, May selected formulas for the compound creams based on reimbursement rates as opposed to medical efficacy. In order to facilitate the scheme to defraud, May and Advantage Pharmacy either did not collect patient co-payments for the compound topical creams or paid co-payments on behalf of beneficiaries. As a co-owner of Advantage Pharmacy, May received a portion of the reimbursements associated with the fraudulently obtained compound creams and transferred certain of those proceeds from the fraud – in transactions greater than $10,000 - into a money market account held in his name.
Schaar, 47, of Biloxi, pleaded guilty to conspiracy to commit health care fraud for his role in a fraudulent scene in which he, acting as a marketer for a pharmacy located in Lamar County, solicited physicians and other medical professionals to write prescriptions without seeing patients for compound topical creams dispensed by the pharmacy.
According to the Criminal Information, Schaar, together with others, later falsified patient records to make it seem as though medical professionals had examined the patients who received prescriptions for the compound creams. In total, the pharmacy received $2.3 million in reimbursements for the prescriptions solicited by Schaar.
According to court records, the scheme include 412 charged defendants in 41 federal districts across the country, targeting schemes which involved billing Medicare, Medicaid, and TRICARE for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries.
The two will remain free on a $25,000 personal security bond and are set to be sentenced on Oct. 17, 2017 at the William M. Colmer Federal Building & United States Courthouse in Hattiesburg.