Texas Pharmacist Sentenced for Workers’ Comp Healthcare Fraud

 Posted on April 23, 2025 in Fraud

A Plano, TX pharmacist was recently sentenced to 17 years and six months in prison and ordered to pay $115 million in restitution for committing healthcare fraud against the Department of Labor (DOL). According to evidence submitted at trial, the pharmacist was submitting fraudulent claims for prescription compounded creams for those injured in Texas workers’ compensation accidents.

The pharmacist, along with others he brought into the scheme, conspired to pay doctors to prescribe medically unnecessary compound creams for injured federal workers. The doctors were paid millions in illegal bribes and kickbacks for prescribing these creams, which were being mixed in the back rooms of three pharmacies by untrained teens. The actual cost of the creams was approximately $15 per prescription, but the DOL was charged as much as $16,000 per prescription.

Some patients who received the creams testified at the trial, stating that the creams were ineffective and often caused painful skin rashes. The pharmacist was ordered to forfeit more than $400 million in addition to restitution, which is the highest forfeiture ever obtained by the DOL in a health fraud case. Having a highly experienced Dallas, TX criminal defense attorney is extremely important if you are facing white-collar fraud charges.  

Is Healthcare Fraud Federal or State?

Title 18 of the United States Code, Section 1347 makes it a federal crime to defraud a healthcare program or obtain money from a healthcare program through fraudulent means. Generally speaking, a white-collar crime typically falls under state jurisdiction unless it crosses state lines or occurs on federal lands.

Since many acts of fraud are carried out via computer, the very nature of the Internet makes these crimes federal. In the case listed above, the "victim" was the Department of Labor, a federal agency, so the crime was charged and prosecuted under federal law.  

What Are the Potential Federal Sentences for Healthcare Fraud?

Under the False Claims Act, a person can face up to five years in prison and criminal fines of up to $250,000. Those who violate the Anti-Kickback Statute can face up to five years in prison and fines of up to $25,000. These penalties apply when there are only a few counts of healthcare fraud committed by an individual.

The penalties – both prison time and monetary penalties – increase exponentially, based on the number of counts of healthcare fraud, as well as the monetary losses from the acts of fraud. Fines of $11,000 can be levied for each false healthcare claim, while fines of $50,000 can be assessed for each violation of the Anti-Kickback Statute. The Office of the Inspector General can assess fines of up to triple the damages suffered by the government.

Are There Valid Defenses Against Healthcare Fraud Charges?

Healthcare fraud and other types of fraud require an intent to defraud, so the prosecutor may not have a solid case if intent is not clear. In addition to a lack of intent to defraud, depending on the facts and circumstances surrounding the charges, the following defenses may be used:

• Errors in coding, billing, or documentation were honest mistakes.
• The defendant did not know his or her actions were fraudulent.
• The witnesses for the prosecution are questionable.
• There is insufficient evidence to back up the charges.
• The evidence was collected without a valid search warrant.
• The defendant’s constitutional rights were violated.
• There were procedural errors or chain-of-command issues in the handling of evidence.  

Contact a Dallas, TX Federal Healthcare Fraud Lawyer

You must take these charges very seriously if you have been federally charged with healthcare fraud or another white-collar crime. An experienced Dallas, TX federal healthcare fraud attorney from Spencer & Associates can help ensure you receive a solid defense and the best outcome possible, given your circumstances.

We have successfully handled numerous high-profile fraud defense cases. While we try to avoid litigation when possible, we never hesitate to aggressively fight for our clients in court when necessary. We also have significant experience in recovering seized assets. Call 214-385-8500 to schedule your free consultation.