10 Individuals Charged in Prescription Compounding Drug Scheme

Ten defendants were charged in a 35-count superseding indictment in connection with their involvement in a $100-million health care fraud conspiracy against TRICARE.

According to the Department of Justice (DOJ), special agents with the Federal Bureau of Investigation and the Defense Criminal Investigative Service arrested the 9 perpetrators, and 1 defendant surrendered. The defendants include physicians, pharmacy owners, and marketers.

The defendants allegedly colluded to run a fraud scheme against TRICARE with prescription compounded pain and scar creams in a conspiracy that included the payment of kickbacks to TRICARE beneficiaries, prescribing physicians, and marketers by the owners of compounding pharmacies. The scheme allegedly ran from approximately May 2014 to mid-February 2016.

The superseding indictment names the following defendants:

· Dr. Walter Neil Simmons, 47, of Mesa, Arizona

· Dr. William F. Elder-Quintana, 50, of El Paso, Texas

· Jeffrey Eugene Fuller, 51, of Dallas, Texas

· Andrew Joseph Baumiller, 37, of Dallas, Texas

· Jeffry Dobbs Cockerell, 61, of Houston, Texas

· Steven Bernard Kuper, 43, of Burleson, Texas

· Ravi Morisetty, 42, of Irving, Texas

· Joe Larry Straw, 46, of Frisco, Texas

· Luis Rafael Rios, 50, of Killeen, Texas

· Michael John Kiselak, 49, of Southlake, Texas

Two additional defendants, Richard Robert Cesario and John Paul Cooper, co-owned and co-operated CCMGRX, LLC, (CMGRX), a Texas limited liability company. Their company marketed compounded pain and scar creams to US military members and their families through fraudulent medical studies through which individuals were paid in exchange for obtaining compounded drugs with their TRICARE prescription benefits. TRICARE paid more than $102 million for compounded drug prescriptions generated by CMGRX. Neither Cesario nor Cooper had any medical, nursing, or pharmaceutical licensing.

According to the DOJ, Cesario, Cooper, and their co-conspirators paid TRICARE beneficiaries for obtaining and filling prescriptions for compounded drugs, primarily compounded pain creams, scar creams, migraine creams, and vitamins. These payments were disguised fraudulently as TRICARE-approved grants for participating in fake medical studies.

Trilogy Pharmacy, a compounding pharmacy in the TRICARE network, paid several of the CMGRX employees kickbacks in exchange for sending prescriptions for compounded drugs to Trilogy. Other compounding pharmacies, such as FW Medical Supplies LLC, which is owned and operated by defendant Steve Bernard Kuper, conducted business under a pseudonym and paid kickbacks to Cesario and Cooper in exchange for referring prescriptions to them.

Each defendant is charged with 1 count of conspiracy to commit health care fraud, which carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. Cesario and Cooper are charged with 14 counts of payment and/or receipt of illegal remuneration. The remaining defendants, except for Simmons, have also been charged with at least 1 count of payment and/or receipt of illegal remuneration. If convicted, the defendants face 5 years in federal prison and a $250,000 fine.