Two physicians pleaded guilty Wednesday in San Diego federal court, admitting to their role in prescribing expensive and unnecessary medications as part of a $65 million fraud against the military’s healthcare system.
Carl Lindblad and Susan Vergot, who worked for Choice MD in Cleveland, Tenn., wrote 4,442 total prescriptions in the span of a year and a half as part of the scheme, according to the investigation.
According to prosecutors, military members in San Diego were paid to recruit Marines and their family members to participate in a fake medical study, which included speaking to a doctor in a telemedicine session and being prescribed compound medication.
Lindblad, 53, and Vergot, 31, admitted to writing the prescriptions despite never examining the patients in person, and then sending the prescriptions to a pharmacy in Bountiful, Utah, which would bill TRICARE health insurance an exorbitant amount of money for the specialized medicine. Compound prescriptions are much more expensive than standard medicine because they are custom-made by pharmacists to tailor to a patient’s special needs. The medications have not been specified but many were in cream form, according to authorities.
In May 2015, TRICARE put a stop to filling prescriptions using non-FDA approved ingredients – used in compound prescriptions – after an audit uncovered suspicion of fraud.
The two doctors pleaded guilty to charges of conspiracy to commit health care fraud. They are set to be sentenced June 29.
The medical clinic’s owners, Jimmy and Ashley Collins, are also charged in the investigation and have pleaded not guilty. Prosecutors allege the couple made $45 million dollars in the scheme, using the money to buy property around Tennessee, Aston Martin cars and a yacht.
CFK Inc., the owner of The Medicine Shoppe pharmacy in Utah at the time, is also charged. Prosecutors have not revealed the people behind CFK, although court records identify them by the initials T.S. and W.W. Business records identify one of the owners as Wade Walters of Walters Holdings. Walters is one of several people being investigated in Mississippi on TRICARE fraud allegations.
Last month, Joshua Morgan, a former San Diego Marine, pleaded guilty to his role as a recruiter in the case.