Compounding Ill-Gotten Gains

Pills spilling out of a prescription bottle on 100 dollar paper currency

Compounded medications are custom mixed for individual patients, and often carry a correspondingly high price tag. That evidently makes them temping fodder for healthcare fraud. Three Oklahoma marketers decided that potential profits merited hefty physician kickbacks in a prescription fraud scheme. (It appears their “marketing” talent centered on bribery.) Daniel Richard Ferguson, John Richard Frohrip, and Kevin Ellis Partin pleaded guilty to offering and paying physician kickbacks in return for referrals to Brookhaven Specialty Pharmacy, LLC, in June 2019.

In their plea, the trio admitted to offering kickbacks and allegedly paying Dr. John Main $15,000 from a Brookhaven Specialty Pharmacy account in return for referrals for compounded prescriptions reimbursable by TRICARE. (As you might guess, the fraudsters then used the reimbursed funds for their own financial gain.) They face up to five years in prison and a fine of up to $250,000 for violating the federal anti-kickback statute.

Several physicians allegedly involved in this healthcare fraud also face charges. Oklahoma physicians Krisna Balarma Parchuri, Christopher R. Parks, and Gary Robert Lee, along with Texas physician Jerry May Keepers, were charged in January with conspiracy to commit healthcare fraud. Keepers and Parchuri were also charged with soliciting and receiving illegal bribes and kickbacks. Parchuri was further charged with obstructing the criminal investigation of the fraud. (Hmmm, was “I will abstain from all intentional wrong-doing and harm,” removed from the Hippocratic oath recently?)

Today’s Fraud of the Day comes from a news release from the United States Attorney’s Office, Northern District of Oklahoma, “Three Marketers Plead Guilty to Violations of Federal Anti-Kickback Statutes,” published Jun. 26, 2019.

Three marketers have pleaded guilty in U.S. District Court to offering or paying illegal kickbacks to physicians in relation to the government health care insurance programs Medicare, TRICARE, and the FECA Program, announced U.S. Attorney Trent Shores.

Daniel Richard Ferguson, 47, of Broken Arrow; John Richard Frohrip, 52, of Tulsa; and Kevin Ellis Partin, 49, of Bixby, were charged this month in three separate Informations with offering or paying health care kickbacks. The men caused federal health care insurance programs to pay reimbursement costs for expensive compounding drug prescriptions written by recruited doctors in return for kickback payments. The defendants would then use the reimbursed funds for their own financial gain.

Additional information is from a KJRH Channel 2 news article, “Tulsa doctors charged in kickback scheme,” posted Jun. 13, 2019.

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.