Ten Additional Defendants Charged in $100 Million TRICARE Fraud Scheme

[nitpicker]

https://www.justice.gov/usao-ndtx/pr/ten-additional-defendants-charged-100-million-tricare-fraud-scheme

Department of Justice
U.S. Attorney’s Office
Northern District of Texas

FOR IMMEDIATE RELEASE
Friday, October 14, 2016

Two Defendants, Owners of CCMGRX, LLC, Were Indicted Earlier this Year in This Scheme That Involved Claims for Compounded Pain and Scar Creams

DALLAS — Special agents with the Federal Bureau of Investigation and the Defense Criminal Investigative Service (DCIS) arrested nine defendants this week in connection with their roles in a $100 million health care fraud conspiracy perpetrated against TRICARE, the health insurance program for members of the military and their families. A tenth defendant surrendered to the FBI. The defendants, including doctors, pharmacy owners, and marketers were charged in a 35-count superseding indictment returned last week in Dallas and unsealed this afternoon, announced U.S. Attorney John Parker of the Northern District of Texas.
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The superseding indictment names the following defendants:

Dr. Walter Neil Simmons, 47, of Mesa, Arizona
Dr. William F. Elder-Quintana, 50, of El Paso, Texas
Jeffrey Eugene Fuller, 51, of Dallas, Texas
Andrew Joseph Baumiller, 37, of Dallas, Texas
Jeffry Dobbs Cockerell, 61, of Houston, Texas
Steven Bernard Kuper, 43, of Burleson, Texas
Ravi Morisetty, 42, of Irving, Texas
Joe Larry Straw, 46, of Frisco, Texas
Luis Rafael Rios, 50, of Killeen, Texas
Michael John Kiselak, 49, of Southlake, Texas
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The superseding indictment alleges that from approximately May 2014 to mid-February 2016, the 12 defendants conspired to run a scheme to defraud TRICARE in connection with the prescription of compounded pain and scar creams. The scheme involved the payment of kickbacks to TRICARE beneficiaries, payment of kickbacks to prescribing physicians, and the payment of kickbacks to marketers by the owners of compounding pharmacies.

Cesario and Cooper co-owned and co-operated CCMGRX, LLC, (CMGRX), a Texas limited liability company formed in September 2014 that had its principal place of business at 5050 Quorum Drive in Dallas. The ‘CMG’ in CMGRX stands for Compound Marketing Group. CMGRX primarily marketed compounded pain and scar creams to current and former U.S. military members and their families on behalf of various compounding pharmacies. CMGRX’s principle marketing tool was a sham medical study through which individuals were paid monetary compensation in exchange for obtaining compounded drugs with their TRICARE prescription benefits. Cesario served as CMGRX’s CEO and Treasurer and Cooper served as its President and Secretary. Neither had any medical, nursing or pharmaceutical licensing or education. CMGRX ceased operations in mid-2015, shortly after TRICARE announced changes to its coverage of compounded drugs. From October 2014 through June 2015, TRICARE paid more than $102 million for compounded drug prescriptions generated by CMGRX.

Defendants Straw and Kiselak led marketing groups for CMGRX that recruited military members and their families and offered them monetary compensation in exchange for obtaining compounded drugs with their TRICARE prescription benefits as part of CMGRX’s study. Defendant Rios, a marketer and patient recruiter in Straw’s marketing group, recruited hundreds of beneficiaries on and around Fort Hood in Killeen, Texas.
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