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Date: 03-01-2024
Case Style:
Case Number: 20-cr-1566
Judge: Dana M. Sabraw
Court: The United States Court for the Southern District of California (San Diego County)
Plaintiff's Attorney: The United States Attorney’s Office in San Diego
Defendant's Attorney:
Description:
Husband and Wife Sentenced for Defrauding TRICARE and Medicare out of $75 Million
Charles Ronald Green Jr. and his wife, Melinda Elizabeth Green, were sentenced in federal court today to 27 months each for fraudulently billing government healthcare programs more than $125 million for medically unnecessary treatments.
The Greens engaged in a scheme to defraud two major federal health care programs: TRICARE, the medical benefits program for military servicemembers and their families, and Medicare, the program that provides benefits to elderly or disabled Americans.
Chief U.S. District Judge Dana M. Sabraw also ordered $4.5 million in restitution to TRICARE and $69,915,909.69 to Medicare.
Between May 12, 2014, and June 29, 2015, the Greens conspired to submit false and fraudulent claims to TRICARE for expensive and medically unnecessary pain creams, scar creams and multi-vitamins (collectively, “compounded medications”), which were billed through various pharmacies. During this period, the Greens owned or were officers of several companies they used in furtherance of their scheme. The pharmacies paid these companies millions of dollars in illegal kickbacks and other remuneration in exchange for the referral of the false and fraudulent prescriptions for compounded medications to TRICARE beneficiaries.
In turn, the Greens and others paid a portion of their profits as kickbacks to so-called “marketing” organizations in exchange for more prescriptions for compounded medications. TRICARE and other payers often reimbursed compounding pharmacies thousands of dollars for a 30-day supply of a compounded pain or scar cream for one beneficiary. In just one example, on May 8, 2015, a false and fraudulent claim was submitted to TRICARE in the amount of $14,178 for Baclofen Powder.
In furtherance of the compounding fraud scheme, the Greens and others developed compounded medication formulations for the primary purpose of inflating the amount of money TRICARE would reimburse, and to correspondingly increase the amount of kickbacks and remuneration that affiliated marketers would receive.
The Greens’ knowing participation in the compounding fraud scheme resulted in the submission of false and fraudulent claims by one pharmacy in the approximate amount of $8,107,816, of which TRICARE paid at least $6,776,222.
Between June 1, 2018, and April 2019, the Greens also conspired to defraud Medicare by submitting false and fraudulent claims for expensive durable medical equipment, or “DME,” similarly induced through a system of illegal kickbacks. The Greens and others executed the DME fraud scheme by purchasing “completed doctors’ orders” from various “marketers” for Medicare beneficiaries, which included a prescription signed by a doctor certifying the beneficiary received an exam that met Medicare’s requirements and that the DME was medically necessary.
In an attempt to disguise the DME fraud scheme from detection, the Greens and their co-conspirators entered into sham “marketing” and other contracts that concealed the pay-per-order arrangement. For example, on March 14, 2019, Charles Ronald Green prepared and submitted an invoice from the Greens’ company, NHS Pharma, concealing that NHS Pharma was being paid a per-brace kickback for selling completed doctors’ orders, but claimed instead to be charging for a $35,000 “TV Campaign,” a quantity of 716 website “Landing Pages,” and $6,928.71 for processing hours.
In addition to purchasing doctors’ orders in furtherance of making false and fraudulent claims on behalf of DME companies they owned or controlled, in some instances the Greens brokered the doctors’ orders by re-selling them at a markup to other DME companies.
“Fraud schemes like this one drive up health care costs for everyone,” said U.S. Attorney Tara McGrath. “We will continue to investigate and bring to justice those who scam taxpayers and place their own financial interests ahead of patient care. Diverting resources from service members and the elderly is especially heinous.”
“The Greens’ greed cost American taxpayers tens of millions of dollars by defrauding federal healthcare programs, including the Department of Defense’s TRICARE program,” said Bryan D. Denny, Special Agent in Charge of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), Western Field Office. “DCIS and its partners will always aggressively investigate those who conspire to defraud TRICARE, because those deceptive actions ultimately harm those defending our country and their families.”
“It is disheartening when people like the Greens go to great lengths to plan elaborate schemes that ultimately have negative effects on innocent citizens,” said FBI San Diego Special Agent in Charge Stacey Moy. “The FBI and its law enforcement partners will ensure that those who defraud the United States Government will be thoroughly investigated and prosecuted for their actions.”
The Court set a hearing for May 24, 2024, to resolve additional claims for restitution.
This case is being prosecuted by Assistant U.S. Attorney Valerie H. Chu.
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