The Department of Justice announced this month that the owner and president of a pharmacy in Florida that was at the center of an illegal $100 million compounding scheme pleaded guilty for his role in the fraud. The huge pharmacy compounding scheme affected several private insurance companies, TRICARE and Medicare.
Also, seven others have pleaded guilty to federal charges related to the compounding scheme. DOJ also stated that various pieces of property, including boats and cars will be forfeited as part of the guilty pleas.
The announcement of the guilty charges in the pharmacy compounding fraud was made by Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney W. Stephen Muldrow of the Middle District of Florida, Special Agent in Charge Eric W. Sporre of the FBI’s Tampa Field Office, Special Agent in Charge Robert F. Lasky of the FBI’s Miami Field Office, Special Agent in Charge Shimon Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office and Resident Agent in Charge Brooke Harris of the U.S. Defense Criminal Investigative Service’s (DCIS) Tampa Regional Office.
The Department of Justice stated that Nicholas Borgesano, 45, from New Port Richey, FL, who was the president and owner of the A to Z Pharmacy, pleaded guilty to a count of conspiracy to commit healthcare fraud, and a count of conspiracy to engage in monetary transactions involved criminally obtained property.
According to federal charging documents, Borgesano owned and operated several pharmacies and shell companies that he and his friends and colleagues used to perpetuate a fraud that involved prescription compounded drugs. The scheme made over $100 million over several years. Borgesano admitted that he bought and controlled several pharmacies based in Florida. He admitted to federal agents that he used them to submit fraudulent reimbursement claims for various types of prescription compounded drugs. Most of them were pain creams and scar creams and were billed to Medicare and TRICARE. He admitted that he and his colleagues in the fraud faked billing codes in the claims for reimbursement and submitted claims for reimbursement for drug ingredients that they did not have.
The man also admitted that he that he was paying both kickbacks and bribes in exchange for prescription drugs and identifying information for patients to keep the scheme going. One of these included a doctor in exchange for the doctor signing off on prescriptions for patients that he never actually saw. Borgesano also admitted that he used A to Z as the major hub for the illegal operation. He paid out the proceeds from the fraud in several ways, including wire transfer and check to shell companies and through purchasing assets such as cars and boats.
- Bradley Sirkin, 55, of Boca Raton, Florida;
- Scott P. Piccininni, 49, of Fort Lauderdale, Florida;
- Edwin Patrick Young, 49, of New Port Richey, Florida;
- Wayne M. Kreisberg, 40, of Parkland, Florida;
- Matthew N. Sterner, 48, of New Port Richey, Florida;
- Peter B. Williams, 57, of New Port Richey, Florida; and
- Joseph Degregorio, 71, of New Port Richey, Florida
The cars that will be given up and sold include a Ford Deluxe from 1936, a Chevrolet Corvette from 1964, a Chevrolet Camaro from 1967, and a 2008 Lamborghini. The boat that is being seized and sold is a 2009 Cigarette racing boat. The combined value of all the properties being seized is $7.6 million. All of the properties that were seized were bought with funds from the drug compounding fraud.
Drug compounding is a legal practice where the pharmacist or doctor combines various drug ingredients to create a drug that is designed for a specific patient. The market for these special drugs has grown in recent years. Compounding pharmacies and companies have come under increased federal scrutiny in recent years after the FDA discovered unsafe sanitary practices at some facilities. This led to a deadly outbreak of meningitis that killed several people in the US.
The Medicare Fraud Strike Force, which has offices in nine cities, including Miami and Tampa, led this investigation. This case is only the latest in the federal government crackdown on the abuses of compounding companies. This is due in large part to the higher reimbursements that are authorized under TRICARE for compounded drugs.
From 2013-15, federal agents discovered approximately $2 billion in fraudulent compounding claims to TRICARE, and $500 million of that was in Florida. In August 2017, a pharmacy in St. Augustine FL was found to be engaged in healthcare fraud. The owner of the pharmacy pleaded guilty. Also, in 2015, four other pharmacies in Florida paid a combined $13 million to settle various civil lawsuits that accused them of ripping off TRICARE for various compounded gels and creams.