Saturday, October 31, 2020

Compounding pharmacy mogul pleads guilty in $510M medical billing fraud


Hattiesburg businessman Wade Walters appeared in federal court Thursday afternoon to plead guilty for his role in a $510 million health care fraud scheme.

Walters, 53, pleaded guilty to one count each of conspiracy to commit health care fraud and conspiracy to commit money laundering at the William M. Colmer Federal Courthouse in Hattiesburg.

His family sat silently behind him as he quietly said the word “guilty” when U.S. District Senior Judge Keith Starrett asked if he was guilty or not guilty of the crimes.

Walters faces up to 20 years in prison and $500,000 in fines. He will be sentenced in October.

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According to court documents, the federal government said Walters’ role in the case was responsible for nearly $290 million of the fraud. An order of forfeiture was entered with the plea agreement, and more than $30 million of Walters’ assets will be seized.

Starrett ordered Walters to be taken into custody after his plea. His attorney, Joe Hollomon, said he was surprised by the move.

The judge said Walters’ attorneys could file a motion to be released on bond, but Walters would remain in federal custody until he ruled on the motion.

Walters was previously charged in a 37-count indictment in connection with the fraud and was scheduled to stand trial beginning Monday in Gulfport.

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The government said Walters, whom they believe is one of the key architects of the scheme, and at least two other unnamed defendants conspired to commit the fraud involving expensive compounded pain creams and vitamin and weight-loss pills billed to TRICARE and other health benefits providers.

Most of the pain creams cost around $11,000-$14,000 per prescription. Instead of writing a prescription for each medication, photocopied prescription pads were made for the expensive formulas to maximize profit.

In addition, refills were sent to the patient automatically to keep the profits flowing.

Compounded medicines are meant to be designed for individuals when traditional medications are not suitable. The medicines also contained controlled substances.

Thirteen others have been found guilty in the scheme. Four pleaded guilty in a related scheme and several other cases are pending.

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