Prosecutors charge top figure in $400M-plus pharmacy fraud
By JEFF AMY
Aug. 08, 2018
JACKSON, Miss. (AP) — Federal prosecutors on Wednesday filed criminal charges against a Mississippi pharmacist who they said in 2016 was one of the "central architects" in a $400 million health care fraud designed to bilk insurers for unneeded but pricey medications.
Thomas E. Spell Jr. of Ridgeland was charged Wednesday with one count of attempt and conspiracy to commit health care fraud and is scheduled to appear in court Thursday in Hattiesburg. Spell faces a charge filed by prosecutors, not an indictment, often a sign a defendant intends to plead guilty. Lawyers for Spell didn't immediately respond to phone calls and emails seeking comment.
Spell faces up to 10 years in prison. Prosecutors also want him to forfeit more than $26 million in cash, financial assets, vehicles and property.
So far, seven others have been convicted in relation to the scheme and three more are under indictment. Of the top conspirators identified in a 2016 asset seizure case , Hope Thomley is under indictment and faces a November trial. Two others — Wade Walters and Chad Barrett — do not yet face criminal charges, although prosecutors have objected to attempts by Walters to unfreeze assets in the separate civil case, saying a criminal investigation continues.
Prosecutors say pharmacies figured out how to hand-make medications with a list of ingredients for which insurers would pay big money, making each prescription very profitable. At the same time, prosecutors allege the pharmacists hired marketers to seek and sometimes pay off physicians, nurse practitioners, dentists and others who could prescribe the drugs, which were typically topical creams. Often, the marketers provided pre-printed prescription pads and prescribers would send in orders for patients they had never examined, prosecutors say. The marketers or pharmacies would also improperly waive or pay copayments for patients who otherwise might have refused the drugs.
Walters had been a marketer for another pharmacy. Prosecutors have said he became a co-owner of Ridgeland pharmacy Medworx with Spell in 2014 after a falling out with other business partners. Prosecutors say compounded prescriptions paid for by Tricare, a federal military health insurer, skyrocketed at Medworx from $6,000 worth in the first three months of 2014 to $64 million in the first three months of 2015. Overall, between December 2014 and January 2016, prosecutors say Medworx and three other pharmacies associated with Spell took in $243.6 million from Tricare.
Prosecutors in the separate civil case say Spell — who previously earned less than $200,000 a year — reaped a huge windfall.
"After managing Medworx for only 18 months, he was able to amass assets estimated to be worth more than $12 million," prosecutors wrote in the case. "During the course of the fraud and as a direct result of his role in it, he was able to purchase, among other things, a boat, a luxury car, and several pieces of real property, as well as invest in real estate development projects."
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