Last fall we issued a client alert, “Medicare Fraud Strike Force Nabs Eight in $100 Million Compounding Scheme” where we reported on Nicholas A. Borgesano, Jr., who, with his fellow conspirators, plead guilty to defrauding Medicare and Tricare in a bribery and kickback scheme that netted them over $100 million in proceeds.

On April 26, 2018, Borgesano, the President and owner of A to Z Pharmacy, was sentenced to 180 months in prison and ordered to pay $54 million in restitution for his role as ringleader in the scheme.

In his plea deal, Borgesano admitted to using A to Z Pharmacy and several other pharmacies and shell companies (Havana Pharmacy, Medplus/New Life Pharmacy, Metropolitan Pharmacy, Jaimy Pharmacy and Prestige Pharmacy) to submit false and fraudulent reimbursement claims for compounded medications – primarily pain and scar creams. The group admitted to, among other activities, manipulating billing codes, paying kickbacks and bribes in exchange for fraudulent prescriptions, and submitting reimbursement claims for pharmaceutical ingredients that they did not actually possess.

Six of the other seven co-conspirators have already been sentenced and a number of real properties, along with luxury automobiles, including a 1936 Ford Deluxe, a 1964 Chevrolet Corvette convertible, a 1967 Chevrolet Camaro, a 1970 Chevrolet Monte Carlo and a 2008 Lamborghini convertible were forfeited as a part of the sentencings. The other conspirators received prison sentences ranging from 12 to 66 months. The final conspirator is scheduled for sentencing on April 30, 2018.