A $30M Tricare fraud scheme established by a Florida pharmacist and colleague has been uncovered and prosecuted in a U.S. Federal Court in the Sunshine State.

On Sept. 5, 2017 in the State of Florida, a federal jury convicted defendants Serge F. and Patrick T. of a conspiracy involving false claims against Tricare, the health care program for military personnel serving the U.S., and the Federal Employee Health Benefit Program.

The Tricare fraud scheme involved over $37 million dollars in billing to Tricare alone in unnecessary or downright false prescription drug orders. The payout back to Serge F. amounted to $30 million and was consistent with the lavish lifestyle in which he lived.

He had purchased the sprawling former Florida mansion of a popular actor and filled the premises with high-end vehicles from brands such as Ferrari, Rolls Royce and Lamborghini.

The Tricare Fraud conspiracy allegedly involved Serge and Patrick engaging paid marketers who in turn paid doctors to write prescriptions without even laying eyes on the corresponding patients. The prescriptions were most often for expensive topical medications, some of which cost upwards of $17,000 per bottle.

Serge, who is himself a compounding pharmacist and owner of a compounding pharmacy known as Atlantic Pharmacy and Compounding in Pompano Beach, Fla., would then prepare the medications and mail them off to patients without charging a copay amount.

He would ensure the prescription was set to an automatic refill status, so that if the person receiving did not return the item they did not request, it would keep going to that person indefinitely and he could bill Tricare indefinitely.

Among the medications ordered were Levocetirizine, which is used for allergies, Betamethasone, a topical steroid, Terbinafine, an antifungal medicine, and Gabapentin, an epilepsy and neuropathy pain treatment.

In the spring of 2016, Tricare became aware of several Tricare fraud schemes centered around compounding pharmacies like that owned by Serge. They stopped paying bills presented by Atlantic Pharmacy and Compounding.

In the end, the Florida jury convicted Serge and Patrick of several illegal activities involving conspiracy, Tricare fraud and other health care fraud, providing kickbacks, and laundering money. Serge F. alone was further convicted of deliberately making statements including falsehoods and misbranding medications.

The Tricare fraud conspiracy needed a vast network of people to make it work successfully. Sometimes doctors wrote prescriptions based solely on patient notes provided to them and received a kickback fee for their trouble. At least 17 people related to this case have pleaded guilty or have been convicted of crimes related to the scheme.

This Tricare Fraud Lawsuit is Case No. 1:16-cr-20399, in the U.S. District Court for the Southern District of Florida.