Pyramid Scheme

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Stethoscope on 100 dollar bills symbolizing financial surveillance

James A. Mays, III, 44, of Winfield, Ala., entered a guilty plea for his role in a drug-billing scheme involving a Haleyville-based pharmacy. Mays pleaded guilty to one count of conspiring to commit healthcare and mail fraud, twelve counts of healthcare fraud, and three counts of money laundering based on spending the proceeds of healthcare fraud.

Between August 2013 and November 2014, Mays co-owned the operations of Global Medical Equipment and Supplies, Inc. (GMES) which operated as Northside Pharmacy. In October 2014, Mays also became co-owner of Affiliate Pharmacy Strickland. (When you’re at the top, the only place to go is down.)

Jeremy Adams and Jeffrey Black purchased GMES, and by extension, Northside Pharmacy, in November 2014. Mays continued working for the company as a pharmacist and director of pharmacy operations. From August 2013 to June 2016, Mays participated in a billing scheme for GMES.

As part of this scheme, pharmacy employees were directed to obtain medically unnecessary drug prescriptions for themselves, family members, and friends. The more prescriptions the pharmacy could fill, the more the pharmacy could fraudulently bill insurance providers. (The pharmaceutical industry already has image trouble, this scheme doesn’t help.)  

Employees were also directed to alter prescriptions, automatically refill prescriptions regardless of patient need, waive and discount co-pays to entice patients to obtain medically unnecessary drugs, and bill for drugs without patients’ knowledge. (They were trying to make a quick buck by any means necessary.)

GMES evaded prescription drug administrators by providing false information in response to audits and diverting the company’s billing through affiliated pharmacies. A few of the healthcare companies that were defrauded by this scheme were the pharmacy’s Blue Cross Blue Shield of Alabama plan, Medicare, TRICARE, and CHAMPVA. (Mays was an equal opportunity fraudster that went after any insurance company that would pay.)                                                                                                                                                      Mays faces up to 20 years in prison and a $250,000 fine for conspiracy to commit healthcare and mail fraud. The maximum penalty Mays could face for each count of healthcare fraud is 10 years in prison and a $250,000 fine. He also faces up to 10 years in prison and a $250,000 fine for spending the proceeds of healthcare fraud.

In total, 26 defendants have pleaded guilty for their roles in this fraudulent billing scheme.  GMES employees who have previously pleaded guilty include two nurse practitioners, the CEO, the COO, a vice president of sales, an operations manager, multiple district managers, and multiple sales representatives.

Today’s Fraud of the Day comes from a Department of Justice press release, “Former Co-Owner of Pharmacy Pleads Guilty in Prescription Drug Billing Scheme,” dated February 10, 2021.

BIRMINGHAM, Ala. – Today an additional defendant pleaded guilty in a long-running investigation into a prescription drug-billing scheme involving a Haleyville, Ala.-based pharmacy, Northside Pharmacy doing business as Global Compounding Pharmacy.  U.S. Attorney Prim F. Escalona, Federal Bureau of Investigation Special Agent in Charge Johnnie Sharp, Jr., U.S. Department of Health and Human Services, Office of Inspector General, Special Agent in Charge Derrick L. Jackson, Defense Criminal Investigative Service Special Agent in Charge Cynthia Bruce, United States Postal Inspector in Charge, Houston Division Adrian Gonzalez, and Internal Revenue Service-Criminal Investigation Special Agent in Charge James Dorsey announced the guilty plea.

James A Mays, III, 44, of Winfield, Ala., entered a guilty plea before U.S. District Judge L. Scott Coogler to one count of conspiring to commit healthcare and mail fraud, twelve counts of healthcare fraud, and three counts of money laundering based on spending the proceeds of healthcare fraud.

 

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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.