A married couple was indicted in a Tennessee federal court on Friday for allegedly operating a scheme to defraud TRICARE, a healthcare program for active duty military and veterans, out of millions of dollars.
The scheme attempted to defraud TRICARE of more than $65 million in pharmacy reimbursement funds for compounded medications mailed to service members in Southern California, according to the U.S. Attorney’s Office of Southern District of California.
Jimmy and Ashley Collins, of Cleveland, Tennessee, reportedly conspired with The Medicine Shoppe, a pharmacy based out of Utah and owned by CFK Inc., to submit the fraudulent claims.
“The theft of military health care dollars directly harms the U.S. Government and our warfighters and will not be tolerated,” said Special Agent in Charge Michael Mentavlos, of the Defense Criminal Investigative Service Southwest Field Office. “Today's indictment demonstrates that DCIS, in partnership with NCIS, IRS, and the FBI, will aggressively pursue those who seek to steal Department of Defense resources.”
The Collinses allegedly paid recruiters to encourage active-duty sailors and marines in Southern California to participate in a paid medical study, when in fact no medical study was taking place, according to the indictment.
Once a TRICARE beneficiary agreed, prescriptions for compounded medications were issued by doctors employed at Choice MD, a Tennessee medical clinic co-owned and operated by the Collinses, without an in-person examination ever taking place.
Compounded medications are specially made by a pharmacist to meet the specific medical conditions of patients, according the U.S. Attorney’s Office. Those prescriptions were sent to The Medicine Shoppe and other pharmacies to be fulfilled, and those pharmacies then billed TRICARE at inflated prices.
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Each specially mixed medication from The Medicine Shoppe cost TRICARE more than $14,000 a month, according to the U.S. Attorney’s Office.
From December 2014 to May 9, 2015, The Medicine Shoppe fulfilled 4,442 prescriptions and billed TRICARE $65,679,512. The Collinses received kickbacks for those prescriptions totaling about $45.7 million, according to the U.S. Attorney’s Office.
With their kickbacks, the Collinses purchased an 82-foot yacht, multiple luxury vehicles, farm equipment, tractor-trailer trucks and three pieces of real estate in Tennessee, all of which is forfeitable, according to the indictment.
“San Diego is a military town," said U.S. Attorney Adam L. Braverman. "This indictment sends a message to those who seek to defraud the Department of Defense out of the dollars meant to care for our military members and their families: fraudsters will be held accountable here."
At their Friday arraignment in Tennessee, the Collinses were charged with one count of Conspiracy to Commit Healthcare Fraud and six counts of Payment of Illegal Remuneration, for making six kickback payments to their recruiters. One of the payments totaled more than $1.4 million, according to the U.S. Attorney’s Office.
The couple's next scheduled court appearance will be at the U.S. District Court for the Southern District of California on February 2.
