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Arkansas woman receives prison sentence in Tricare fraud scheme

by Linda Satter | April 13, 2019 at 4:30 a.m.

A Conway woman was sentenced Friday to 18 months in federal prison for her role in a scheme to defraud Tricare, the health insurer for the U.S. military.

Charlotte Leija, 38, pleaded guilty Oct. 18, admitting to being part of a conspiracy to defraud the government through a scheme to generate unnecessary prescriptions for expensive compounded medicines. A Mississippi compounding pharmacy paid a Little Rock medical sales representative, Brad Duke, a share of whatever the pharmacy was paid for filling the prescriptions. Duke, in turn, paid Leija for issuing the fake prescriptions and others for finding the names of Tricare beneficiaries across the country in whose names prescriptions could be issued.

Federal prosecutors said Leija worked as a medical assistant for a Little Rock doctor and used beneficiary information provided by Duke to issue fake prescriptions under the doctor's name, without the doctor knowing, for patients who were covered by Tricare. Over 70 percent of the prescriptions issued were for Tricare beneficiaries who didn't even live in Arkansas, prosecutors said.

In pleading guilty, Leija admitted authorizing the maximum number of refills for each phony prescription in return for being paid kickbacks by Duke. She agreed to forfeit $253,643.59 -- an amount representing the proceeds she derived from the scheme -- to the government, either through cash or the sale of her property.

Assistant U.S. Attorney Alex Morgan said in a sentencing memorandum that Leija had worked as a medical assistant for the unnamed Little Rock doctor for nearly a decade. He said she carried out her end of the scheme by copying the doctor's signature from a real prescription and affixing it to pre-filled prescriptions generated by a team of patient recruiters working with Duke.

"Their enterprise lasted less than one year," Morgan said. "Its demise did not owe to a change of heart by (Leija), Duke, or the patient recruiters. ... The end came only when Tricare began to suspend payment. By the time Tricare caught on, however, (Leija) had rubber-stamped bogus compounded drug prescriptions for over 100 different Tricare beneficiaries from around the country, for which Tricare went on to pay more than $10 million."

U.S. Attorney Cody Hiland said in October that Tricare paid nearly $2 billion nationally in 2015 for compounded prescription drugs, constituting an 18-fold increase that prompted investigations across the country, including in Arkansas. The compounded medications prescribed en masse in the Arkansas case were pain cream, scar cream and supplements.

Morgan said Leija was allowed to pleaded guilty to the lesser offense of violating the anti-kickback statute, instead of more serious charges of fraud and identity theft, solely because when the FBI visited the medical clinic to investigate, she readily acknowledged her wrongdoing.

The conspiracy lasted from roughly December 2014 through July 2015, according to court documents. Morgan said that as late as May 28, 2015, Leija texted Duke, "You can send some more Tricare scripts my way if you want!!"

Morgan said Leija, like most other white-collar defendants, "has a history of well-paying jobs in the medical industry and no criminal history." He said that when only crimes targeting health care entities are considered, over 87 percent of offenders fall in that same category.

Morgan has repeatedly argued against judges giving out low sentences simply based on a lack of criminal history, emphasizing that perpetrators of health care fraud need to be held accountable to deter others from what can be a lucrative, though often short-lived, adventure that severely impacts patients across the country.

While defense attorney Latrece Gray sought a low sentence for Leija, Alexander argued, "Criminals who have the education and training that enables people to make a decent living without resorting to crime are more rather than less culpable than their desperately poor and deprived brethren in crime," citing a 1999 opinion from the Chicago-based 7th U.S. Circuit Court of Appeals.

"The need to deter crime in the health care industry is especially great," Morgan argued. "It has become 'rampant' to the point the United States lacks the resources to reach it all. And those within the industry know it. Research shows health care offenders believe 'the probability of getting caught is low, the opportunity is readily available, and the reward is potentially great,'" quoting from a law journal article.

Chief U.S. District Judge Brian Miller sentenced Leija to 18 months in prison, to be followed by three years' supervised release. Last month, he sentenced Michael Sean Brady, 50, a former medical sales representative from Little Rock who also admitted to being involved in the scheme, to eight months in prison.

Duke and others charged in the scheme are still awaiting sentencing.

Metro on 04/13/2019

Print Headline: Arkansas woman receives prison sentence in Tricare fraud scheme


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