Chief Compliance Officer Sentenced for $50M Medicare Fraud Scheme

A Florida man was sentenced today to four years and six months in prison and ordered to pay $21.

7 million in restitution for his role in a health care fraud and wire fraud conspiracy that resulted in over $50 million in false and fraudulent claims being submitted to Medicare.

According to court documents and evidence presented at trial, Steven King, 45, of Miramar, was the chief compliance officer of a pharmacy holding company that fraudulently billed Medicare for dispensing lidocaine and diabetic testing supplies that Medicare beneficiaries did not need or want.

King, along with his co-conspirators, operated A1C Holdings LLC, a holding company for a number of pharmacies in various states, including All American Medical Pharmacy in Warren, Michigan.

The pharmacies operated by A1C Holdings LLC secured prescriptions and refills for medically unnecessary prescriptions for lidocaine and diabetic testing supplies, in violation of Medicare’s rules and regulations, as well as the pharmacy benefit managers’ rules and regulations with which the pharmacies had contracts.

The evidence presented at trial also showed that King and his co-conspirators took several steps to conceal their scheme, including enrolling their mail order pharmacies as brick-and-mortar retail pharmacies to evade more rigorous oversight, shipping prescription refills for high-reimbursing medications and supplies without patient consent, concealing the ownership of A1C Holdings LLC and its pharmacies, and transferring patients between these pharmacies without patient consent.

 Each of these steps was taken to ensure that profitable medications and supplies, like lidocaine and diabetic testing supplies, continued to be billed to Medicare.

In June, King was convicted of conspiracy to commit health care fraud and wire fraud.

Acting Assistant Attorney General Nicole M.

Argentieri of the Justice Department’s Criminal Division, Special Agent in Charge Mario Pinto of the Department of Health and Human Services Office of Inspector General (HHS-OIG), and Special Agent in Charge Cheyvoryea Gibson of the FBI Detroit Field Office made the announcement.

HHS-OIG and the FBI investigated the case.

Trial Attorney Shankar Ramamurthy of the Criminal Division’s Fraud Section prosecuted the case.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program.

Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion.

 In addition, the Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to hold providers accountable for their involvement in health care fraud schemes.

 More information can be found at www.

justice.

gov/criminal-fraud/health-care-fraud-unit.

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