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Senior Director of Strategic Alliances
LexisNexis Risk Solutions - Government

The purpose of a holding company is to allow those who own several businesses to have a way to limit liability, streamline management, and still maintain ownership over each business. It is a common business model in the pharmaceutical world. Steven King was the chief compliance officer of what he claimed to be a pharmacy holding company. A1C Holdings, LLV owned pharmacies in various states including the All American Medical Pharmacy in Warren Michigan. On paper, A1C Holdings appeared to be commercial family-owned pharmacies where patients could drop off and pick up their prescriptions. But appearances are deceiving. King is a fraudster who used A1C Holdings to fraudulently bill Medicare to the tune of $50 million in fake prescriptions.

On June 8, 2023, King was found guilty of health care fraud. Records show that A1C Holdings dispensed lidocaine and diabetic testing supplies that Medicare beneficiaries did not need or want. King took several steps to conceal the scheme, including enrolling his mail order pharmacies with Medicare as brick-and-mortar retail locations in order to evade more rigorous inspections. Appearing to have retail locations allowed the shipping of fraudulent prescription refills for high-reimbursing medications and supplies without actual patient consent. Concealing the ownership of A1C Holdings LLC and it’s mail order pharmacies also allowed for “transferring patients among King’s pharmacies to bill Medicare for even more fraudulent claims. As chief compliance officer, King was in a unique position to prevent and report the fraudulent scheme, but fraudsters only use unique positions to rob the U.S taxpayer.    

Great job by the FBI Detroit Field Office and HHS-OIG who investigated the case. King’s sentencing is scheduled for Sept. 14, 2023, and he faces a maximum penalty of 20 years in prison.

Today’s Fraud of The Day is based on article “Florida Man Convicted After Allegations Of $50M Medicare Fraud” published by the Boca Post on June 8, 2023

Steven King of Miramar was convicted of wire fraud by a jury who agreed that he defrauded Medicare out of $50M. Court records reviewed by Boca Post confirm that Steven King, a Chief Compliance Officer of a pharmacy holding company, was convicted of wire fraud for a scheme that defrauded Medicare out of $50M.

The Department of Justice says that while King was the CCO of A1C Holdings, LLC, a pharmacy holding company, he fraudulently billed Medicare over $50 million dollars. The money was used to fraudulently dispense lidocaine and diabetes testing supplies to people who did not need them, violating Medicare and pharmacy benefit manager rules.

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