The U.S. attorney in Little Rock has announced four guilty pleas in a kickback scheme involving drug prescriptions covered by TRICARE, the military health insurer.
Brad Duke, 43, of Little Rock, Charlotte Leija, 38, of Conway, Michael “Chance” Beeman, 48, of Maumelle, and Michael Sean Brady, 50, of Little Rock pleaded guilty to conspiring to violate the Anti-Kickback Statute.
The government said TRICARE paid $2 billion for compound prescription drugs in 2015, an 18-fold increase over previous years that led to investigations around the country.
A news release from U.S. Attorney Cody Hiland said:
Duke, who worked as a medical sales representative in Little Rock, promoted prescription pain cream, scar cream, and supplements for a Mississippi-based compounding pharmacy, earning a share of whatever the pharmacy was paid on prescriptions issued by affiliated doctors. After learning TRICARE would pay tens of
thousands of dollars per month per patient for compounded drugs, Duke focused upon generating prescriptions for those with TRICARE insurance.
Duke paid patient recruiters, including Beeman and Brady, to find TRICARE beneficiaries to receive prescriptions, telling them a doctor would sign the prescriptions without consulting patients. Patient recruiters forwarded beneficiary insurance information to Duke, which he then routed to local medical assistant Charlotte Leija, whom Duke paid to file the prescriptions under the name of the doctor for whom she worked.
In less than one year, the scheme generated over $10 million in compound prescriptions for over 100 TRICARE beneficiaries hailing from as far west as Chula Vista, Calif., to as far east as Foxborough, Mass. Duke paid patient recruiters more than
$2 million to find the beneficiaries and over $250,000 to Leija to issue the prescriptions.
“Duke’s scheme resulted in millions of dollars of fraud and waste to our taxpaying citizens,” U.S. Attorney Hiland said.
The four face prison sentences and will forfeit a total of $1.9 million in illicit proceeds. The news release said more charges are expected.