Houston loves good food. After all, Travel & Leisure wouldn’t have named Houston one of the Top 10 Best Food Cities in their recent list. Chances are Houston Foodies looking for creole food and good music have come across Phil & Derek’s Jazz Lounge & Restaurant owned by John Cruise and his spouse, LaShonia Johnson. But that’s not where the fraud is. In addition to the restaurant, Cruise and Johnson, served as co-proprietors of Assurance Consolidated Pharmacy. And Cruise also held ownership of the Injured Federal Workers Advocate Association (“IFWAA”). Now we have some potential for fraud.
As it turns out, from 2014 to 2018, Cruise and Johnson conspired with 11 other people in a complicated but lucrative scheme to defraud the United States Department of Labor’s Office of Workers’ Compensation Programs (DOL-OWCP) and TRICARE, a health care program for military personnel. They recruited injured federal workers and claimants to have them join IFWAA in return for complimentary support in their workers’ compensation claims. But there is a catch. Nothing is free after all.
Cruise and Johnson submitted false and fraudulent claims to the OWCP and TRICARE for prescriptions for compounded and other drugs prescribed to injured federal workers and members of the armed forces. These fraudsters paid kickbacks to physicians to prescribe the drugs. But Cruise and Johnson chose certain drugs based not on the patients’ medical needs but by the amount of reimbursement for the drugs. The drugs were then mailed to patients, even though the patients often never requested, wanted, or needed them.
Cruise and Johnson won’t be enjoying creole food or jazz for a long time. They were recently sentenced to a combined 35 years in federal prison for workman’s compensation fraud.
Excellent job by the Office of Inspector General – U.S. Department of Labor.
Today’s Fraud of the Day is based on article “‘Hate to See It’: Houston Power Couple Sentenced to a Combined 35 Years In Federal Workman’s Comp Fraud Scheme” published by Atlanta Black Star Business News on October 17, 2023
A Houston power couple has been sentenced to a combined 35 years in federal prison after being convicted of fraud. Now, one of the businesses that the duo once owned is fighting to divorce its good name from its headline-grabbing scandal.
John Cruise and his wife, LaShonia Johnson, once jointly owned both the Phil & Derek’s Restaurant and Jazz Lounge and the Assurance Consolidated Pharmacy. The husband also owned the Injured Federal Workers Advocate Association (IFWAA). When the couple went down for running a scam through two of the businesses, the eatery, which had been a popular destination for African-Americans in the city, experienced struggle and had to assume new ownership.