A recent health care fraud conspiracy case resulted in federal prison sentences for six participants, serving as a warning to pharmacy owners and their employees. Read the full Department of Justice Press Release, here.

The Case

Mohamed Abdalla is a licensed pharmacist who owned several pharmacies throughout Northern Virginia, including Medex Health Pharmacy and Royal Care Pharmacy. From at least January 2014 to December 2018, Abdalla conspired to defraud federal, state, and private health care benefit programs in violation of the federal Anti-Kickback Statute. The U.S. Attorney’s Office brought charges against Abdalla and his co-conspirators for the following schemes:

• The payment or receipt of unlawful kickbacks for expensive drugs and devices; and
• Billing Medicare and TRICARE, the Department of Defense’s health care program, for expensive drugs and devices for themselves, family members, and other pharmacy employees that were not medically necessary and/or not prescribed by a physician, and billing for prescriptions for pharmacy customers that were not filled or not received by the beneficiary.

Specifically, Abdalla and his co-conspirators capitalized on the opioid crisis by paying or obtaining kickbacks for the referral of prescriptions for compound medications and for a naloxone auto-injector used to treat opioid emergencies. In total, the schemes resulted in roughly $2 million and over $6 million dollars of loss to Medicare and TRICARE, respectively.

According to Raj Parekh, the acting U.S. Attorney for the Eastern District of Virginia, “The defendants betrayed their duties as health care professionals, performed illegal kickbacks, and defrauded essential benefit programs out of millions of dollars. EDVA is committed to prosecuting those who exploit taxpayers and engage in the unacceptable fleecing of these important public institutions and programs.”

The Sentences

Abdalla and his five co-conspirators received the following sentences:

• Mohamed Abdalla was sentenced to four years in prison as the main owner and operator of the pharmacies involved in the schemes.
• Onkur Lal worked for Abdalla as a pharmacist and used his knowledge to circumvent audits and investigations by third parties that were investigating fraud on behalf of health benefit programs. He was sentenced to three years in prison for his role in the conspiracies.
• Mohammed Tariq Amin worked as a pharmacy technician and general manager of the Royal Care Pharmacy during the schemes. Amin conspired with Abdalla to pay kickbacks for the naloxone auto-injector device prescriptions. He was sentenced to two years in prison.
• Daniel Tyler Walker worked as a pharmaceutical sales specialist for the company responsible for marketing the naloxone auto-injector device. From August 2015 to April 2017, Walker accepted a 25% kickback of the net sales of the prescriptions from Abdalla and Amin. Walker was sentenced to 15 months in prison.
• Seth Michael Myers accepted kickbacks for the referral of compound medications from Abdalla and a licensed physician. Myers and the physician created a company that was paid over $2.5 million during the scheme, which spanned from 2013 to 2016. Myers was sentenced to two years in prison.
• Michael Beatty worked as a licensed pharmacist. For about a year, he conspired with Myers to pay kickbacks for the referral of expensive compound medications. He was sentenced to one year and one day in prison.

The Takeaway

As stated by Christopher Dillard, Special Agent in Charge of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office, “These sentencings should send a clear warning that DCIS and its investigative partners will vigorously pursue fraudsters intent on lining their pockets with tax dollars earmarked for the care of our Warfighters.”

This case also shows a continued focus by the Department of Justice to pursue instances of fraud and abuse related to the national opioid crisis. As such, pharmacies, pharmaceutical sales companies, and medical device companies involved in the filling of prescription drugs or devices related to opioids should expect scrutiny in their affairs and take extra precautions to ensure their business arrangements do not violate federal or state laws.

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