Compound Cream Scheme Nets 8 Year Prison Term for Pharma Rep

Pensacola, FL (WorkersCompensation.com) – A Georgia pharmacy representative charged in an elaborate plan to bilk insurance companies for compounded drug prescriptions to unsuspecting patients has been sentenced to 96 months in federal prison.

Authorities say 52-year-old Michael Scott Burton of Decatur, Ga., pleaded guilty to conspiracy to commit health care fraud and wire fraud, conspiracy to commit money laundering, and money laundering. 

The U.S. Attorney for the Northern District of Florida said from January 2014 to December 2015 Burton ran a $6.5 million scheme involving fraudulent claims for prescriptions of compounded pain cream, scar cream and wellness capsules.

According to authorities, Burton recruited several sales representatives to obtain and provide him with the personal identifying information and insurance cards of people “for whom the prescriptions could be issued in exchange for commission payments.” Burton then sent the information to a partner who worked at a Georgia physician’s office and could get prescriptions “even though he was not licensed to write prescriptions.”  The prescriptions were sent to Pensacola-based Physician Specialty Pharmacy “without the individuals ever seeing or speaking with a doctor.” In exchange for the prescriptions, authorities said Physician Specialty caused the insurers to be billed and paid Burton a 50 percent commission per prescription. For his efforts, Burton earned more than $1.4 million in commissions.

Several insurance companies were cheated in the scheme, mainly TRICARE which provides insurance for current and forma members of the military and their families.

"Health care fraud is a crime that affects all Americans – but to perpetrate a scam that victimizes a program for our nation’s service members and their families is beyond appalling," said Lawrence Keefe, United States Attorney for the Northern District of Florida. "This conspiracy stole money meant to help those who have given so much to our nation, and the criminals behind it deserve the punishment they receive."

In addition to the 8-year federal prison term, Burton was also ordered to pay $6.5 million in restitution to TRICARE and pay a forfeiture money judgment of nearly $1.5 million.

The president and part-owner of Physician Specialty Pharmacy, Andrew E. Fisher, is awaiting trial set for next month. The Georgia prescription provider, Brad T. Hodgson, is awaiting sentencing after pleading guilty. One of the sales reps implicated in the scheme, Bradley D. Pounds was previously sentenced to 21 months in prison. Heather E. Pounds, another sales rep, was sentenced to probation along with Marie Ann Smith, who helped Hodgson process and submit the prescriptions.

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