Headlines that Matter for Companies and Executives in Regulated Industries

Three Men Sentenced for $54 Million TRICARE Fraud Scheme

Three men were sentenced in connection with a $54 million bribery and kickback scheme involving TRICARE, a federal program that provides health insurance benefits to active duty and retired service members and their families.

David Byron Copeland was sentenced to four years and three months in prison following his conviction at trial for paying and receiving health care kickbacks. James Wesley Moss and Michael Gordon pleaded guilty to a kickback and fraud conspiracy, among other charges, and were sentenced to two years and three months and one year and six months in prison, respectively.

Moss and Copeland were part-owners of Florida Pharmacy Solutions (FPS), a Florida-based pharmacy that specialized in compounded prescription drugs. Copeland and Gordon were also involved in sales for FPS. According to court documents, Moss, Copeland, Gordon, and their co-conspirators engaged in “test billing” practices to develop the most expensive combination of compounded drugs to maximize reimbursement from TRICARE. The defendants allegedly targeted physicians who treated TRICARE beneficiaries and paid them kickbacks and bribes, including expensive dinners and trips, in exchange for prescription referrals to FPS. FPS employees also used “blanket letters of authorization” so that FPS could modify the prescription components to maximize reimbursement. From late 2012 through mid-2015, FPS billed TRICARE over $54 million for its compounded drugs.

The government alleged that Moss paid Copeland and Gordon kickbacks based on a percentage of TRICARE’s reimbursement to incentivize them to seek the most expensive compounded drugs possible, and they ultimately received millions of dollars through this scheme. Copeland then allegedly set up new companies to receive the payments to facilitate the conspiracy.

Another co-defendant previously pleaded guilty for his participation in the scheme and was sentenced to two years and nine months in prison.

The US Department of Justice’s (DOJ) press release is available here.

Federal Jury Finds Ex-NBA Players Guilty in Health Fraud Case

On November 15, a federal jury in Manhattan found Glen "Big Baby" Davis, a former Boston Celtics player, guilty of health care fraud, wire fraud, conspiracy to make false statements, and conspiracy to commit health care fraud and wire fraud in connection with his participation in a scheme to defraud the National Basketball Association’s (NBA) health care plan using fake invoices. Will Bynum, a former Detroit Pistons player, was found guilty of conspiracy to make false statements for his role in the scheme, but was acquitted of conspiracy to commit health care fraud and wire fraud. Bynum and Davis were among two dozen defendants that were charged in connection with the conspiracy and were the only two defendants not to plead guilty.

According to the government, former NBA player Terrence Williams was the primary conspirator who recruited doctors to generate fraudulent invoices and convinced players to submit them in their names. Williams, who pleaded guilty, was sentenced to 10 years in prison. However, players who did not engage in recruitment did not receive a prison sentence.

Among other evidence, prosecutors presented screenshots of texts between Bynum and Williams in which Williams told Bynum he could get money out of his account but would have to pay taxes and fees. Bynum received $180,000 after submitting the invoices Williams sent him and sent Williams $30,000 a day later, which prosecutors alleged was a kickback.

Bynum testified in his own defense and claimed that Williams took advantage of him by claiming he was a representative of the National Basketball Players Association and creating invoices for work purportedly performed at a facility Bynum had visited hundreds of times over the years.

Davis is scheduled to be sentenced on March 11, 2024, and Bynum will be sentenced on March 12, 2024.

The case is USA v. Williams, case number 1:21-cr-00603, in the US District Court for the Southern District of New York.

Read our prior coverage here and Law360’s latest coverage here.

Texas Couple Charged in Multimillion-Dollar Pyramid Scheme

A Texas couple was indicted for allegedly operating an illegal pyramid scheme that defrauded thousands of participants of more than $10 million.

According to court documents, the couple founded and operated an illegal pyramid scheme called Blessings in No Time (BINT),which targeted the African American community during the COVID-19 pandemic. The scheme promised participants 800% guaranteed returns and offered refunds if they were unsatisfied with the program.

The defendants allegedly organized BINT’s payment scheme with “playing boards” with Fire, Wind, Earth, and Water positions. To advance on the board, players in the Fire position had to pay at least $1,400 to the person in the Water position and recruit two new Fire-level participants, at which point the cycle would repeat. To receive a return on their initial investment, a participant had to recruit eight others to join the scheme. The government alleges that the defendants placed themselves and their family members in the Water position on multiple playing boards to receive the payments from the Fire participants, and also collected substantial funds from participants’ mandatory monthly user fees.

The couple has been charged with conspiracy to commit wire fraud, wire fraud, and money laundering. They each face a maximum penalty of 20 years in prison for each wire fraud count and 10 years in prison for each money laundering count if convicted.

The DOJ’s press release is available here.

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