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Michigan Pharmacist Sentenced to 46 Months for $4 Million Medicare Health Care Fraud Scheme
Table of Contents
Abstract
A former Michigan pharmacist was sentenced to 46 months in federal prison after pleading guilty to health care fraud for billing Medicare approximately $4 million for prescription drugs that were never dispensed. The sentence also requires $4 million in restitution and significant forfeiture of assets, underscoring the Department of Justice’s (DOJ) continued focus on criminal Medicare fraud enforcement.
Background of the Case
According to court documents summarized by the DOJ, a 50-year-old pharmacist owned and operated a pharmacy in Dearborn Heights, Michigan. From approximately 2011 through 2017, he engaged in a Medicare fraud scheme in which he billed and received payment from Medicare for prescription medications that he did not actually dispense to beneficiaries. The fraudulent conduct occurred through his Dearborn Heights pharmacy, where he used his position as owner and operator to submit false claims.
The sentencing took place after he pleaded guilty in August 2024 to one count of health care fraud in the U.S. District Court for the Eastern District of Michigan. The case was investigated by the FBI Detroit Field Office and the Department of Health and Human Services Office of Inspector General while the prosecution was handled by a Trial Attorney in the Criminal Division’s Fraud Section, which leads the Health Care Fraud Strike Force Program.
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The DOJ highlighted this case within the broader context of its national health care fraud enforcement efforts. Since March 2007, the Health Care Fraud Strike Force Program, now operating in 27 federal districts, has charged more than 5,800 defendants who collectively billed federal health care programs and private insurers more than 30 billion dollars. The Centers for Medicare and Medicaid Services, working with the HHS Office of the Inspector General, continue to take steps to hold providers accountable for their participation in health care fraud schemes.
Nature of the Misconduct
The misconduct in this case was centered on fraudulent Medicare billing for high value prescription medications that were not actually provided to patients.
According to court documents, the pharmacist billed Medicare for prescription medications that he did not dispense at his pharmacy. The fraudulent claims focused on high reimbursing medications, including blood thinners and lung disease inhalers. The press release states that the pharmacy did not even have the inventory to dispense these high-cost medications, yet claims were still submitted to Medicare for reimbursement and paid
The defendant concealed the fraud through manipulation of his pharmacy’s records and financial transactions and manipulated pharmacy inventory purchases so that records would not reflect the absence of the medications billed to Medicare. He also manipulated the receipt and transfer of the fraud proceeds. The proceeds were diverted for his personal use and benefit rather than being tied to legitimate prescription dispensing.
As a result of this criminal conduct, the defendant caused a total loss of approximately $4 million to Medicare. The conduct involved repeated, deliberate submission of false claims to a federal health care program over several years, making it a significant example of Medicare fraud in the pharmacy setting.
Legal Context
Federal law makes it a crime to knowingly and willfully execute, or attempt to execute, a scheme to defraud any health care benefit program, or to obtain by false or fraudulent pretenses any money or property owned by or under the custody or control of a health care benefit program. This offense is codified in 18 U.S.C. § 1347.
Submitting claims to Medicare for prescription drugs that were never dispensed, particularly where the pharmacy did not have sufficient inventory to fill those prescriptions, is a classic example of a scheme to defraud a federal health care program. The use of falsified billing and manipulated inventory records to obtain Medicare reimbursement satisfies the requirement that the conduct be carried out through false or fraudulent pretenses.
Health care fraud schemes involving pharmacies are a recurring focus of the Department of Justice Fraud Section and the Health Care Fraud Strike Force Program. Billing for medications not dispensed, billing for higher priced medications than were provided, and concealing fraudulent billings through falsified records are common patterns of criminal health care fraud. The pharmacist’s conduct, as described in the press release, aligns with this pattern.
While the press release does not reference the False Claims Act, the same underlying conduct of billing Medicare for services or items not provided can also form the basis for civil liability under the False Claims Act (31 U.S.C. §§ 3729–3733) in appropriate cases. In many health care fraud matters, the government pursues parallel criminal and civil enforcement, although the press release here describes only the criminal prosecution and resulting sentence.
The involvement of the FBI and the HHS Office of the Inspector General reflect the standard interagency approach to investigating federal health care fraud. The HHS Office of the Inspector General focuses on protecting Medicare and Medicaid funds, while the FBI provides broader investigative resources. Their collaborative efforts, combined with the prosecutorial role of the Fraud Section, highlight the coordinated federal response to health care fraud schemes like the one at issue.
Sentencing or Settlement Terms
The federal court imposed a significant sentence on the pharmacist for his role in the health care fraud scheme at his Dearborn Heights pharmacy. He was sentenced to 46 months in prison following his guilty plea to one count of health care fraud.
In addition to the term of imprisonment, the court ordered substantial financial penalties and asset forfeiture. He was ordered to pay $4 million in restitution, reflecting the approximate loss he caused to Medicare. Restitution is intended to compensate the victimized program for its financial losses and is a standard component of sentencing in health care fraud cases.
The court also ordered him to forfeit multiple assets derived from or involved in the offense. This forfeiture included four real estate properties and over $700,0000. Criminal forfeiture serves to strip defendants of the economic gains of their fraudulent activity and to deter similar misconduct by others.
This sentence demonstrates that pharmacists and other health care providers who misuse their access to federal health care programs for personal financial gain face the risk of incarceration, restitution obligations, and forfeiture of significant assets. It also illustrates the Justice Department’s use of both restitution and forfeiture to fully address the financial impact of criminal health care fraud on Medicare.
