A South Florida pharmacist was sentenced to 78 months in prison today for his role in a $5 million compounding pharmacy scheme.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, Special Agent in Charge Shimon R. Richmond of the Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office, Special Agent in Charge John F. Khin of the Department of Defense Office of Inspector General – Defense Criminal Investigative Service’s (DCIS) Southeast Field Office and Florida Attorney General Pam Bondi made the announcement.
Stephen Chalker, 42, of Wellington, Florida, was sentenced by U.S. District Judge Donald M. Middlebrooks of the Southern District of Florida, who also ordered Chalker to pay $4,980,679.50 in restitution jointly and severally and a forfeiture money judgment of $244,134. After a four-day trial before Judge Middlebrooks, Chalker was convicted by a jury in West Palm Beach, Florida, on Sept. 7, 2018 of one count of conspiracy to commit health care fraud and two counts of health care fraud.
According to evidence presented at trial, from approximately September 2014 to August 2016, Chalker engaged in a scheme to defraud Medicare, TRICARE and Medicaid by submitting false and fraudulent claims for compounded drugs and other prescription medications that were not medically necessary and/or never provided. The evidence established that in his role as the licensed pharmacist-in-charge of Pop’s Pharmacy, a now-defunct pharmacy in Deerfield Beach, Florida, Chalker submitted or caused the submission of high-dollar claims for expensive pain and scar creams that patients did not want, did not need and in some cases did not receive. Chalker, as pharmacist-in-charge, created the formulas for the fraudulent compounded pain and scar creams to be filled by Pop’s Pharmacy in order to maximize profits for Pop’s Pharmacy from insurance reimbursement, and not for patient care. Chalker and his co-conspirators ran a nationwide telemarketing and telemedicine scheme in which there was no real patient-prescriber relationship or actual patient care, the evidence showed.
The evidence established that as a result of claims submitted in connection with the scheme, Medicare, TRICARE and Medicaid made payments totaling nearly $5 million.
Two other defendants have been charged in this case. Elaina Liva, 66, of Pompano Beach, Florida, pleaded guilty and was sentenced on Nov. 1, 2018 to 24 months in prison and was ordered to pay $4,980,679.50 in restitution jointly and severally. Chris Liva, 40, the owner of Pop’s Pharmacy, pleaded guilty and was sentenced on Nov. 14, 2018 to 48 months in prison and was ordered to pay $4,980,679.50 in restitution jointly and severally. (40 months of his 48-month sentence will run concurrently with a 78-month health care fraud sentence imposed on Liva on June 19, 2018 in a health care fraud case prosecuted in the Northern District of Ohio, United States v. Physicians Surgical Group, LLC et al., 14-CR-00447-ADAMS).
This case was investigated by the FBI, HHS-OIG, DCIS and the State of Florida Medicaid Fraud Control Unit. Trial Attorney Jim Hayes of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Leslie Wright of the District of Massachusetts (formerly a Fraud Section Trial Attorney) prosecuted the case.
The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
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