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Healthcare Fraud

Federal ‘Crusade’ in $100 Million Fraud Case Ends in Mixed Verdicts

Defense attorneys describe federal overreach and how an innocent man's career was ruined.
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A six-week healthcare fraud trial ended with a mixed bag last month when jurors handed down verdicts that included convictions, acquittals, and deadlocks. The $100 million fraud case was one of the largest in the state, and authorities say TRICARE, the health care plan for the U.S. Department of Defense, picked up the tab for the fraud.

Of the 13 charged in the case, seven had previously pleaded guilty. Of the six that went to trial, one was convicted, three were found not guilty, and the jury couldn’t make up its mind up on the two doctors involved in the alleged scheme,Arizona physician Dr. Walter Neil Simmons, Dr. William F. Elder-Quintana from El Paso.

The alleged fraud occurred between 2014 and 2016, and involved kickbacks and a conspiracy to sell soldiers pricey pain and scar creams that were unnecessary, while the military health plan paid for the ruse. The government said pharmacies paid marketers for attracting fraudulent prescriptions to their business while defendants paid kickbacks to doctors in order to refer more prescriptions.

The owner and president of Trilogy Pharmacy in Dallas plead guilty to the scheme, and two of the marketers for CMG RX LLC also plead guilty. Former Dallas Cowboys center John Kiselak also did marketing for the company, but was found not guilty.

“These kinds of health care fraud cases are very complex and somewhat draining,” said Nicole Knox, Kiselak’s attorney, in a statement to the Dallas Morning News. “But we survived the government’s two-month-long onslaught and learned more about how they approach this kind of prosecution.”

Steven Bernard Kuper, who was also found innocent, owned Dandy Drug in Burleson, Texas. He was charged with paying kickbacks to a marketing group in order to attract prescription referrals, but his lawyers argued that he didn’t do anything illegal, and was unaware of any fraudulent schemes. The jury agreed.

“The government’s crusade to root out health care fraud and abuse has, at times, including in this instance, simply swept up too broad a range of individuals and businesses – at great operational and reputational cost,” said attorney Jeff Ansley via statement. “Here, the facts simply didn’t support the dogged and years-long prosecution of a small business owner and his operation. We deeply appreciate the jury’s ability to separate fact from fiction and see, plainly, that Steven Kuper is an innocent man.”

Ansley says Kuper was caught up in an expansion of the government’s quest to root out healthcare fraud around the nation. With dramatic increases in healthcare costs, there is ample opportunity for fraud, but the government’s attempt to follow the money led to the uprooting of an innocent man’s life, Ansley says.

“When the government doesn’t thoroughly investigate, the result is that our client is inappropriately prosecuted, excoriated at times,” Ansley says.  “The verdict came years after being drug through the mud and being prosecuted at the federal level.”

Kuper only had a relationship with the fraudulent marketing company for 80 days and had little contact or communication with those who pleaded guilty. But despite the positive verdict, Kuper and his family’s lives are forever changed. Dandy Drug went out of business after the indictment, and even though he is still licensed, Kuper couldn’t get a job as a pharmacist because of his attachment to the case. “The ripple effect of this prosecution has been almost breathtaking to see,”Ansley says. “He is as guilty as you or I , but his life has been turned completely upside down.”

“It is a cautionary tale for him and other medical professionals,” Ansley says. “You can operate completely in your area of operations and still face an indictment.”

So what can a future pharmacist do to avoid being caught up in a similar scheme? Kuper’s lawyers say this case is evidence that there isn’t much one can do, even with proper vetting. “You can do everything right and still end up in their cases,” Ansley says. “It’s frightening; there is no clear bright line of what you can and can’t do.”

The federal court did not respond to a request for an interview.


Will Maddox

Will Maddox

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Will is the senior editor for D CEO magazine and the editor of D CEO Healthcare. He's written about healthcare…

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