A Ridgeland pharmacist pleaded guilty Thursday for his role in a scheme to defraud TRICARE and other health care benefit programs out of more than $240 million.
Thomas Edward Spell Jr., 50, pleaded guilty before U.S. District Judge Keith Starrett in Hattiesburg to a criminal complaint outlining his role in the scheme, according to a Department of Justice news release. Spell was charged with felony attempt and conspiracy to commit health care fraud on Wednesday.
Court documents revealed that Spell worked with others to defraud TRICARE and other health care programs by mass producing and prescribing medically unnecessary compound medications through a scheme that included kickbacks, bribes and fraud. TRICARE is the health care benefit program serving the nation’s military, veterans and their respective family members.
“Ripping off our veterans and members of the military is despicable, and that is exactly what this defendant and others have done by defrauding TRICARE and the American taxpayer," U.S. Attorney Mike Hurst said in the release. "Rest assured that we will hunt down all those who commit this type of fraud and we will not stop until such criminals are brought to justice."
According to the Department of Justice, this is the largest health care fraud scheme ever investigated and prosecuted in Mississippi. The investigation is ongoing and prosecutions continue nationwide.
Prosecutors said Spell was one of the "central architects" of the scheme. He co-owned Medworx pharmacy in Madison County and at least three other pharmacies across the county, according to court documents.
The DOJ said Spell and co-conspirators directed his pharmacies to submit fraudulent claims in order to be reimbursed by TRICARE and other health benefit programs, totaling over $243 million.
Spell and co-conspirators worked around TRICARE's requirement that a beneficiary make a copayment to receive medicine by having their employees use prepaid debit cards and money orders for copayments, with Spell and co-conspirators reimbursing employees, according to the DOJ.
According to court documents, Spell pocketed more than $29 million from the scheme. Prosecutors are seeking forfeiture of these assets and have seized more than $17 million from bank accounts linked to Spell, two vehicles, a boat and several properties.
"I want to thank the agents, AUSAs, DOJ trial attorneys, and our other law enforcement partners for their tireless work on this far-reaching scheme," Hurst said. "This fraudulent activity has gone on for far too long, and the U.S. Attorney’s Office will continue to enforce our federal laws and clean up crime and corruption throughout our state."
Spell will be sentenced on October 16 by Starrett.
So far, 11 people have been charged and eight convicted in this compounding pharmacy scheme.
Former Biloxi physician Albert Diaz was found guilty on all 16 counts in a federal indictment charging him with fraud, conspiracy, conspiracy to distribute a controlled substance, distribution of a controlled substance and destruction, alteration or falsification of records in a federal investigation. He was sentenced to three-and-a-half years in prison.
Susan Perry, a nurse practitioner, pleaded guilty to conspiracy to commit health care fraud and will be sentenced on September 20.
Jay Schaar, a pharmaceutical sales representative, pleaded guilty to conspiracy to commit health care fraud.
Jason May, a pharmacist in charge of Hattiesburg-based Advantage Pharmacy, pleaded guilty to conspiracy to commit health care fraud and money laundering.
Schaar and May will be sentenced on August 21.
Gregory Parker, a Laurel nurse practitioner, pleaded guilty to conspiracy to commit health care fraud and will be sentenced on October 2.
Brantley Nichols, a Hattiesburg dental surgeon, pleaded guilty to conspiracy to commit health care fraud and will be sentenced on Jan. 8, 2019.
Three more suspects have been indicted and are awaiting trial. Hope Evangulane Thomley, Howard Randall Thomley and Glenn Doyle Beach Jr. were named in a 28-count indictment alleging they conspired and engaged in a scheme to defraud health care insurance companies.
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