Pharmacist, marketer charged with pharmacy fraud

Published 8:15 pm Friday, July 14, 2017

JACKSON (AP) — Two Mississippi men have been criminally charged as part of a nationwide crackdown on health care fraud.

Lamar County pharmacist Jason May, 40, was charged Wednesday with conspiracy to defraud the federal government. He faces allegations that his Advantage Pharmacy brought in $192 million in revenue from military insurer TRICARE as part of the fraud.

Biloxi health care marketer Gerald Jay Schaar, 46, is charged with attempt and conspiracy on allegations of taking kickbacks from a pharmacy to persuade someone to prescribe $2.3 million in drugs paid for by TRICARE. Schaar and the prescriber are accused of later falsifying patient records to make it appear the physician had long been seeing the patients.

Subscribe to our free email newsletter

Get the latest news sent to your inbox

Both men are scheduled to waive indictment and plead guilty to the charges July 25 before U.S. District Judge Keith Starrett.

Prosecutors want May to forfeit $400,000, and they want Schaar to forfeit an unnamed amount.

U.S. Attorney General Jeff Sessions announced the indictments Thursday as part of a broader nationwide health care fraud crackdown. Federal authorities are already pursuing civil lawsuits against others in Mississippi, alleging they engaged in a variety of frauds designed to soak federal and private insurers.

Parts of the investigation have been visible since agents raided nine Mississippi pharmacies in January 2016. In court papers filed in February in a case where prosecutors are trying to seize millions in cash, vehicles and real estate, they alleged that three Mississippi pharmacies alone had bilked $400 million from insurers.

The papers allege that Mitchell “Chad” Barrett of Clinton, Wade Walters and Hope Thomley of Hattiesburg, and Thomas E. “Tommy” Spell Jr. of Ridgeland were the key players in the scheme. Federal lawyers say Barrett and then the others participated in schemes designed to drive up demand for costly compounded medications, hiring marketers who targeted doctors willing to write prescriptions for patients they had never seen in exchange for kickbacks. The marketers also recruited patients to submit claims in exchange for kickbacks.

Among the claims are that pharmacies would: submit multiple claims to determine which drug would bring the most money, split longer-term prescriptions into shorter-term prescriptions to avoid price caps, automatically refill prescriptions even against doctors’ orders and cover co-pays for patients.

Federal prosecutors say May and an unnamed co-owner of Advantage Pharmacy set out to defraud insurers by making custom-made creams with ingredients “for the purpose of maximizing profit, not patient care.” The civil suit says Advantage was paid $155 million for compounded medications by various insurers between June 2012 and February 2016.

Walters and Thomley are identified in the civil case as among other owners of Advantage.