The Justice Department’s commitment – resources and public statements – has continued at a steady pace in the Trump Administration.  Some might diminish the effort by recognizing that fraud is so pervasive that it is like shooting fish in a barrel.  In the end, however, criminal cases require investigation, organization, resources and hard work.

As you would expect, Florida is a prime geographic target for fraud prosecutions.  In a recent example, the US Attorney’s Office in Florida prosecuted three individuals involved in a fairly basic illegal kickback scheme.

Ryan Williamson and William Pierce, from A&G Spinal Solution, conspired with Dr. Michael Frey, an interventional pain management doctor operating in Fort Meyers, Florida, to pay Frey kickbacks for referring patients to A&G Spinal.

Under the arrangement, Williamson and Pierce paid a percentage of resulting profits from the referrals to Frey’s wife, who was unaware of the scheme and was not involved with A&G Spinal.  Williamson and Pierce made payments to Frey’s wife by putting her on the A&G Spinal company payroll.

In addition, from 2013 to 2015, Williamson paid kickbacks to Frey in exchange for patient referrals for compound pharmaceutical pain cream prescriptions.

The defendants, Williamson, Pierce and Frey all plead guilty to the conspiracy.  Williamson  was sentenced to one year in prison and forfeited $1.5 million, representing the proceeds of the conspiracy.  Pierce was sentenced to nine months in prison and forfeited $800k in proceeds.

Frey plead guilty to two counts of conspiracy and is awaiting sentencing.  Frey agreed to pay $2.8 million, representing the amount of money he collected as part of the fraud scheme against Medicare and TRICARE.

Frey’s criminal activity was not limited to his activities with A&G Spinal.  As part of his plea agreement, Frey admitted to receiving kickbacks from Insys Therapeutics, Inc, for prescribing SUBSYS, a fentanyl spray.  (Here for summary of Insys case).  Frey also acknowledged that he submitted false claims to Medicare and TRICARE for urine testing for patients when it was not necessary.  Frey also had an improper ownership interest in a medical group that provided anesthesia services for patients that caused Frey to improperly refer patients to the group for anesthesia services.

The Justice Department’s focus on physicians, pharmaceutical and medical device companies in the pain management space is beginning to result in significant prosecutions.  As part of the DOJ response to the opioid crisis, physicians, and pharmaceutical and medical device companies have to focus on ethics and compliance to prevent any potential issues of illegal kickbacks or Stark Law violations.  The Justice Department has dedicated significant resources to this initiative and this industry focus is going to raise significant risks for actors in this space, particularly pain management physicians.