Sherwood man at center of Tricare fraud scheme sentenced to 4 years

A man described as the "quarterback" of a team of pharmaceutical sales representatives, physicians and patients responsible for millions of dollars in fraudulent compounding prescriptions billed to the military insurer Tricare was sentenced to four years in prison Tuesday by a federal judge in Little Rock.

Prosecutors said Albert Glenn Hudson, 41, of Sherwood was at the center of the fraud scheme that resulted in $12 million in losses to Tricare in Arkansas in 2015. Hudson pleaded guilty in June 2020 to conspiracy to violate the U.S. Anti-Kickback Statute in a scheme that netted him about $1.5 million personally.

At his sentencing hearing Tuesday before Chief U.S. District Judge D. Price Marshall Jr., Hudson's attorney, Blake Hendrix of Little Rock, described his client as a dedicated family man active in the community who runs a boxing program and mentoring program for young people.

Although U.S. sentencing guidelines recommended a five-year sentence for Hudson, Hendrix -- citing Hudson's cooperation and testimony during the recent trial of co-defendant Joe David May -- asked Marshall to vary downward and consider a short prison sentence to be augmented with a period of home detention or to consider home detention alone.

But Assistant U.S. Attorney Alex Morgan, citing the complexity of the case and the extended period of time -- more than six years -- it took to complete the investigation and begin wrapping up the prosecutions of numerous defendants involved in the conspiracy, argued for the full five-year guideline sentence. Morgan said although the case seemed on the surface to be out of the norm for Arkansas, it was symptomatic of a wave of conduct that swept the nation resulting in independent conspiracies by drug company representatives that resulted in hundreds of prosecutions across the country and an estimated $2 billion in losses to the military insurer in 2015.

Morgan said the type of crime being dealt with in the Tricare fraud case tended to result in prosecutions of people whose criminal records are non-existent, with the typical defendant being well-educated, financially successful and highly respected in their profession and their communities.

Morgan said limited resources made it impossible to try and run down every report of fraud in an industry geared to rely on trust. He said the typical offender in such a case is a first-time offender and not likely to re-offend because successful prosecutions for fraud in the medical sales industry generally result in a lifetime ban from the industry for defendants.

"You don't get a second bite at the apple," he said. "It's an honor-based system. It's a trust-based system."

Morgan insisted that those who participated in the conspiracy were well aware of the consequences of their actions.

"This is not a case where people get to the end of the scheme and suddenly realize they've done wrong," he said, noting that Hudson had spent more than 10 years in the industry before he got involved in the scheme that proved his undoing.

Morgan said the scheme expanded as a result of efforts to maximize the commissions paid on compounded prescriptions, bringing in more patient recruiters, patients and providers until the scheme began to collapse under its own weight and questions began to be raised into the matter by pharmacies and regulators.

At that point, in early 2016, Morgan said the efforts of Hudson and others involved in the scheme shifted from expanding the fraud to covering it up by producing fake medical records and making sure patients knew who their provider was and instructing them to lie to investigators when questioned about being seen.

Morgan said after the FBI began investigating the fraud in 2016, Hudson began actively falsifying records in an attempt to throw investigators off the trail.

"This case isn't measured in years," he said. "It's measured in lies."

Hudson's cooperation with investigators, Morgan said, came only after his efforts to cover up the crime proved futile. He said Hudson tried to stay one step ahead of efforts by the compounding pharmacy to verify the prescriptions, many of which cost thousands of dollars, by instructing beneficiaries to lie.

"If you're in the business of printing money," Morgan said, "you tell another lie to keep the money flowing."

In asking for leniency, Hendrix cited Hudson's cooperation with the investigation, including his testimony last month in the trial of Dr. Joe David May, an Alexander physician who was found guilty of writing hundreds of bogus prescriptions for patients with whom he never consulted. May was found guilty of conspiracy to generate kickbacks, solicitation and receipt of kickbacks and bribes, falsifying records, identity theft, fraud, making false statements and wire fraud after a weeklong trial last month before U.S. District Judge Kristine G. Baker.

May is to be sentenced later this year.

Marshall said although he had no concerns that Hudson would ever be back in court on similar charges, the sentence would have to send a message to others who might be tempted to engage in similar behavior. In addition to the four-year sentence, he ordered Hudson to forfeit all illicit profits he gained from the scheme.

"The word needs to get out loudly and clearly," Marshall said. "The law will not tolerate those who take advantage of these systems meant to help folks who need medical care, particularly veterans who have served our country."