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Senior Director of Strategic Alliances
LexisNexis Risk Solutions - Government

The investigation from the Defense Criminal Investigative Service agents into Patient Care America (PCA) began with allegations of health care fraud and payment of kickbacks to marketing groups that solicited TRICARE beneficiaries on behalf of PCA. TRICARE is the health care benefit program for United States military members and their families. Now in some industries, it is acceptable to reward those who refer business to you. However, in the Federal health care programs, paying for referrals is a crime. The statute covers the payers of kickbacks-those who offer or pay remuneration- as well as the recipients of kickbacks-those who solicit or receive remuneration.

PCA’s CEO Patrick Smith adamantly denied involvement in any such scheme when he voluntarily met with DCIS agents in March of 2020. Specifically, Smith claimed that he played no role in hiring the marketing groups and that he didn’t know they were directly soliciting TRICARE beneficiaries. Thou protest too much Patrick Smith.

Turns out, upon further investigation, Smith frequently met with the marketing groups and decided which to hire and on what terms. The terms being that PCA paid over $40 million in kickbacks to the marketers for recruiting and referring TRICARE beneficiary prescriptions for expensive, unnecessary compounded medications to PCA. Not the first fraudster to lie. To date, over a dozen of PCA’s marketers and employees have been convicted and sentenced for their roles in the scheme. The government has recovered more than $30 million in fraud proceeds from PCA and the individual defendants. On March 3, 2024, Mith was sentenced to five years in prison.

Excellent job by the Defense Criminal Investigative Service Department.

Today’s Fraud of The Day is based on article “Lies to U.S. agents about military benefits lead to prison for Palm Beach Gardens man, 71” published by the Palm Beach Post on March 4, 2024

A judge has sentenced a former pharmacy CEO who lives in Palm Beach Gardens to six months in prison after the CEO pleaded guilty to making false statements to federal agents investigating a multimillion dollar health care fraud scheme involving military benefits, the U.S. Attorney’s Office said.

Patrick Smith, 71, received his sentence during a hearing Feb. 23 in Miami before U.S. District Judge Roy K. Altman. He pleaded guilty in July to making a materially false statement to agents in a matter within the U.S. Department of Defense’s jurisdiction. A grand jury indicted him on five counts of making false statements, and he faced up to five years in prison.

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