The indictment also claims that both companies used the same marketers but compensated them differently based on the type of prescription, aiming to conceal illicit kickback payments on federal prescriptions.
Richard Hall, a Texas pharmacy owner, received a prison sentence of four years and four months and was ordered to pay over $59 million in restitution for his involvement in illegal kickbacks and a money laundering conspiracy.
According to a Dallas News report, the Justice Department announced a federal indictment revealing a scheme in which $14 million in illegal kickbacks and bribes were paid following doctors' prescriptions of compounded drugs covered by federal insurance.
The 2008 indictment filed in the Northern District of Texas targeted Richard Hall and 50 others, including Scott Schuster, 48; Dustin Rall, 45; and George Lock Paret, 36, all from Fort Worth; Johnathan Le, 44, from Dallas; and Quintan Cockerell, 38, from Manhattan Beach, California.
According to the press release, "they were each charged in a superseding indictment filed May 13 in the Northern District of Texas with the following: conspiracy to defraud the United States and pay and receive kickbacks (Hall, Schuster, Rall, Paret, Le and Cockerell); paying and/or receiving kickbacks (Hall, Schuster, Rall, and Le with four counts, Cockerell with one count); conspiracy to commit money laundering by concealing proceeds of the unlawful kickbacks (Schuster and Rall); conspiracy to commit money laundering by engaging in monetary transactions in criminally derived property (Hall, Schuster, Rall, and Cockerell); and engaging in monetary transactions in criminally derived property (Hall with one count, Schuster and Rall with two counts and Cockerell with three counts).'
Two marketers, Turner Luke Zeutzius from Horseshoe Bay and Michael Ranelle from Fort Worth, have pleaded guilty to one count of conspiracy to defraud the United States and paying and receiving kickbacks.
TRICARE offers medical coverage through the U.S. Department of Defense for active-duty military members, the National Guard, retirees, and their dependents. The superseding indictment reveals that between May 2014 and September 2016, Hall, Schuster, Rall, Paret, Le, and their associates supposedly orchestrated a plan to offer kickbacks and bribes in exchange for TRICARE and DOL(Department of Labor) beneficiaries being referred to receive costly compound medications. Hall, Shuster, and Rall jointly owned Rxpress Pharmacy and Xpress Compounding, both compound pharmacies situated at 1000 W. Weatherford St. in Fort Worth.
According to the superseding indictment, Rxpress Pharmacy and Xpress Pharmacy were essentially one and the same; despite having different names, they shared staff and worked out of the same location. The indictment also claims that both companies used the same marketers but compensated them differently based on the type of prescription, aiming to conceal illicit kickback payments on federal prescriptions.
Hall, Schuster, Rall, Paret, and Le are accused of creating a plan to give kickback payments to marketers via Xpress Compounding in exchange for federal prescription referrals. The marketers were supposedly disguised as fake "W-2" employees to make it seem like they were legitimate Xpress Compounding employees. However, they were actually paid as 1099 contractors by Rxpress Pharmacy, according to the updated indictment.
Xpress Compounding paid Cockerell approximately $2.4 million, while Zeutzius earned around $7.6 million, and Ranelle received $4.1 million in illegal kickbacks.
The superseding indictment reveals that Hall, Schuster, Rall, and Cockerell were involved in financial transactions using illegally obtained assets. They used the fraud proceeds to not only benefit themselves but also others, indulging in the acquisition of lavish cars, private yachts, and various other valuable possessions.
Court documents and trial evidence reveal that Richard Hall, 53, from Fort Worth, collaborated with others to create and market costly compounded medications designed to be customized for individual patients. Compounded drugs, which involve combining, mixing, or altering ingredients to meet specific patient needs, were not approved by the U.S. Food and Drug Administration.
Hall hired marketers to recruit local doctors to prescribe these expensive medications, offering them "investment opportunities" that allowed them to profit from the pharmacy's operations. Hall paid illegal kickbacks to these marketers and conspired to launder the proceeds from these unlawful activities.
In July 2023, a federal jury in the Northern District of Texas convicted Richard Hall on four counts of paying and receiving unlawful kickbacks and one count of conspiring to launder money.
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