Six pharmacy owners and marketers have been charged in an updated federal indictment for their part in a scheme in which $14 million in illegal kickbacks and bribes were paid after doctors prescribed compounded drugs covered by federal insurance, the Justice Department announced.
The new indictment was filed Wednesday against Richard Hall, 50; Scott Schuster, 48; Dustin Rall, 45; and George Lock Paret, 36, all of Fort Worth; as well as Johnathan Le, 44, of Dallas; and Quintan Cockerell, 38, of Manhattan Beach, Calif.
The charges in the indictment include: conspiracy to defraud the United States and pay and receive kickbacks; paying and/or receiving kickbacks; conspiracy to commit money laundering by concealing proceeds of the unlawful kickbacks; conspiracy to commit money laundering by engaging in monetary transactions in criminally derived property; and engaging in monetary transactions in criminally derived property.
Lance Evans, an attorney for Hall, said his client has pleaded not guilty and “looks forward to the opportunity to address these accusations in court.”
M. Cameron Smith, an attorney for Rall, said he “was not part of any criminal scheme at all, and we look forward to vigorously defending these charges.”
Attorneys for Le and Cockerell declined to comment. Attorneys for the other two defendants could not immediately be reached Friday.
The indictment was first filed in the Northern District of Texas in December 2018. The scheme involved the referral of federal workers’ compensation and TRICARE beneficiaries, who received expensive compound drugs, according to the indictment.
TRICARE provides medical coverage through the U.S. Department of Defense, including for active-duty military members and the National Guard, retirees and their dependents.
Two marketers, Turner Luke Zeutzius, 38, of Horseshoe Bay, and Michael Ranelle, 50, of Fort Worth, have pleaded guilty in the case to one count of conspiracy to defraud the United States and paying and receiving kickbacks, federal authorities said.
Hall, Schuster, Rall, Paret, Le and their co-conspirators took part in the kickback and bribery scheme from May 2014 to September 2016, according to the indictment. Hall, Schuster and Rall were co-owners of Rxpress Pharmacy and Xpress Compounding, which are Fort Worth compound pharmacies, authorities said.
Rxpress Pharmacy and Xpress Compounding employed the same staff, used the same marketers and operated out of the same building, according to the indictment.
The government alleges that Hall, Schuster, Rall, Paret and Le paid the kickbacks to marketers through Xpress Compounding for the referral of federal prescriptions.
The marketers were falsely made to appear that they were “bona fide employees” of Xpress Compounding, but they were paid as 1099 contractors by Rxpress Pharmacy, the superseding indictment alleges.
Hall, Schuster, Rall, and Cockerell spent the proceeds of the fraud on luxury vehicles and “chartered vessels, among other property,” authorities said.
Xpress Compounding paid Cockerell about $2.4 million, while Zeutzius earned about $7.6 million and Ranelle pocketed $4.1 million in illegal kickbacks, the indictment said.
Compounded drugs are made when drugs are combined, mixed or their ingredients are altered to meet the needs of a patient. They are not approved by the U.S. Food and Drug Administration but may be prescribed when FDA-approved drugs don’t meet a patient’s needs, according to the indictment, such as when a patient is allergic to a dye or a preservative in a medication.
The Dallas Morning News reported in February and March 2016 that, according to court filings, RXpress Pharmacy was under investigation for alleged federal health care fraud and had been thrown out of a private health insurance network over suspicions of fraud. The News quoted court documents in civil cases that accused the pharmacy of paying illegal kickbacks to physicians for writing prescriptions.
Hall and his father, Lewis Hall, who partly own RXpress Pharmacy and Xpress Compounding, filed a libel lawsuit against The News in March 2016. In the lawsuit, the father and son said RXpress Pharmacy and Xpress Compounding “were not the subject or target of federal investigations.”
Lewis Hall has not been charged.
The Texas Supreme Court last year ruled in favor of The News, unanimously reversing a judgment by a Fort Worth appeals court. The justices said The News published stories that accurately quoted court documents and didn’t report that the pharmacies were “actually guilty of anything.”