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Crime

The Dallas Owners of Medoc Health Services Indicted in Kickback Scheme

The North Dallas company is already the subject of a civil suit brought by the federal government. Its CEO and three others now face criminal charges.

About six months since the federal government hit Dallas-based Medoc Health Services with a lawsuit, a grand jury has indicted four of the major players in an alleged kickback scheme. CEO and owner Kevin Kuykendall; his wife, VP of finance Sabrina Kuykendall; Mark David Schneider; and Michael Ray Schneider are charged with seven counts of conspiracy to solicit and receive illegal kickbacks, soliciting and receiving illegal kickbacks, and aiding and abetting.

The indictment landed on Wednesday. It runs though a scheme in which Medoc funneled high-priced prescriptions through a pharmacy in exchange for payments. Michael Schneider, which the civil suit names as a part-owner of Medoc, entered into a “sham” employment agreement with the pharmacy. The pharmacy paid Schneider a salary of just $30,000 but sent him commission payments in the hundreds of thousands of dollars. That money was then distributed to the Kuykendalls and Mark Schneider—also a part-owner—through a series of shell companies, according to the charges.

The indictment doesn’t name the pharmacy, although the ongoing civil suit lists Total RX Care among its nine defendants and also linked Michael Schneider to a pharmacy called Midcities.

In 2018, following the feds’ raid of Medoc’s North Dallas office, former employees described—for my story in the September issue of D CEO—an alleged scheme at the firm that incentivized physicians to prescribe expensive medications, including compounded pain creams, a particularly high mark-up treatment at the time. The employees said Medoc acted as middle-man, sending the prescriptions to pharmacies where it had a financial connection. A source told me then that the company brought in as much as $1 million a day at its peak.

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