A Little Rock woman admitted Wednesday in a federal courtroom that she received $89,800 in kickbacks for forwarding fraudulent, pre-filled prescriptions to her mother, a registered nurse practitioner, as part of a scheme to defraud a government insurance program.
Jennifer Crowder, formerly known as Jennifer Bracy, now 37, pleaded guilty to a charge of violating an anti-kickback statute.
Her mother, who court documents say rubber-stamped the prescriptions so they could be filled at a compounding pharmacy, wasn't identified in court documents and hasn't been charged. The documents say that in exchange for the older woman approving the phony prescriptions, Crowder was paid $1,000 per patient.
Crowder is one of several people to be charged in the Eastern District of Arkansas over the past two years with participating in schemes dating back to 2015 that have cost Tricare, the military's health insurer, millions of dollars. Investigations began across the country after Tricare paid nearly $2 billion for compounded prescription drugs in 2015 alone, constituting an 18-fold increase over previous years.
The charging document to which Crowder pleaded guilty says she was part of a scheme that generated more than $12 million in fraudulent payments from the insurer. Also charged in the scheme are Albert Glenn Hudson, Derek Clifton and Joe David "Jay" May.
Clifton, a Little Rock man who was a high school basketball coach in Baxter County before becoming a medical sales representative, and May, a physician from Alexander, were indicted together on Jan. 9, and are scheduled for a jury trial beginning Jan. 11, 2021, before U.S. District Judge Kristine Baker.
Hudson, who lives in Little Rock and did business as Major Healing LLC, pleaded guilty June 24 to a charge of conspiring to defraud the government, after waiving review by a federal grand jury.
He admitted pocketing $1.5 million by organizing a group of people to submit phony prescriptions. While his plea agreement calls for him to pay back all the money and to be sentenced based on that amount, his attorney contends the amount of taxes he has paid on the money should be deducted from the restitution amount. He is facing sentencing on March 16, 2021, before Chief U.S. District Judge D. Price Marshall Jr.
According to Crowder's charging document, her mother rubber-stamped prescriptions for patients who hadn't been examined, in exchange for Hudson paying Crowder. During Wednesday's hearing, Crowder surrendered $89,800, representing the amount of kickbacks she received, by way of cashier's checks payable to the U.S. Marshals Service.
The document says that Crowder, Hudson, Clifton and May were part of a network of people who sought out Tricare beneficiaries in whose names unnecessary prescriptions for expensive compounded medications were generated. The prescriptions were filled by a compounding pharmacy in Mississippi that was reimbursed by Tricare.
Court documents say the pharmacy paid incentives to marketers to promote the drugs, not knowing that the marketers were directing lower-level schemers to generate false prescriptions and falsely obtain physicians' signatures on them.
Tricare and Express Scripts Inc., a pharmacy benefit manager that processed prescription claims on Tricare's behalf, processed and paid the claims "in good faith reliance on the fact that the drugs were dispensed pursuant to valid prescriptions," the charging document states.
"Tricare and Express Scripts also processed and paid prescription drug claims in good faith reliance on the fact that kickbacks had not been offered, paid, solicited or received in the course of generating the prescriptions," the document notes. It adds, "Had they known any kickbacks were involved, [they] would have refused payment."
The unnamed pharmacy shipped the compounded drugs to patients across the country.
Crowder, whose guilty plea was accepted by Baker, will be sentenced after a pre-sentence investigation is completed.