Jacob VanLandingham, CEO of biotech company Prevacus, has pleaded guilty to one count of wire fraud for improperly using welfare funds intended to develop a concussion drug. You heard that right. Money that was federally funded to financially help families experiencing hardship was redirected to a private company for the development of a pharmaceutical concussion treatment but ended up being used by the CEO’s personal use. How did this happen? It seems to have started at a Christmas party, where the Governor of Mississippi, the Director of Human Services and a director of a Medicaid funded non-profit called Mississippi Community Education Center met. Conspiring at a Christmas party is never a good idea.
What resulted from the party was an agreement to fund various non-Medicaid eligible recipients, including Prevacus. In January of 2019, VanLandingham, acting as CEO for Prevacus, entered into an agreement with MCEC to invest about $1.7 million toward development of the nasal spray. Unfortunately, this supposed stock investment was financed by the U.S. taxpayer with Medicaid funds from the Mississippi Department of Human Services.
Sometimes fraud cases have more than one scheme! Prosecutors said that Prevacus CEO VanLandingham misused a substantial amount of these misused Medicaid funds for his personal benefit, including gambling and paying off personal debts. VanLandingham’s intent was to unlawfully enrich himself by making materially false and fraudulent representations that he would develop a pharmaceutical treatment for concussions. It was such a bold claim that even the governor of Mississippi, the Department of Human Services and a Medicaid non-profit willingly diverted Medicaid funds from the needy to support the scheme. VanLandingham personally used of about $400,000 in U.S. taxpayers’ money.
Great job by the Department of Health and Human Services.
Today’s Fraud of The Day is based on article “Biotech Company’s CEO Pleads Guilty in Mississippi Welfare Fraud Case” published by the Mississippi Clarion Ledger on July 26, 2024.
The chief executive officer of a biotech company with ties to the largest public corruption case in Mississippi history pleaded guilty Wednesday to one count of wire fraud for improperly using welfare funds intended to develop a concussion drug.
Jacob VanLandingham entered the plea at a hearing in Jackson before U.S. District Judge Carlton W. Reeves, according to court records. A sentencing date was not immediately set. Possible penalties include up to 20 years in prison and a $250,000 fine.
A former research scientist and drug company CEO in Florida, whose work on a nasal spray to treat concussions was at one time touted across the nation, pleaded guilty Wednesday in federal court to wire fraud in connection with the Mississippi welfare scandal.
