MOBILE, AL—Eight individuals, including Lori Brill, Butch Brill, Travis Goodwin, Eric Mosley, Tony Goins, Chris Vernon, Jeff Vernon, and Leroy Waters, were indicted by a federal grand jury on March 24, 2011 in a 23-count indictment charging them with various health care fraud and kickback crimes related to their participation in a scheme to overbill insurance providers for hemophilia medication and supply inducements for Medicaid referrals.
In announcing the return of this indictment, United States Attorney Kenyen R. Brown stated, “Health care fraud in the United States costs consumers billions of dollars, whether the victim is a private medical insurer or a public program such as Medicaid. Individuals exhibiting sheer greed through extensive fraudulent billing and awarding improper inducements for Medicaid business, such as the allegations in today’s indictment, are driving up health care costs and are depriving those who really need medical assistance as provided by these government-funded programs. Our office, in conjunction with our law enforcement partners, will aggressively continue to safeguard precious taxpayer dollars, protect our nation’s most essential health care programs, and dismantle criminal networks that bilk the system.”
FBI Mobile Division, Special Agent in Charge Lewis M. Chapman, stated, “The citizens of Alabama should know the FBI takes all allegations of fraud seriously, particularly the misuse of taxpayer funds and programs. Anyone with information regarding such fraudulent activity is encouraged to contact the FBI.”
The indictment lays out four different, but related, conspiracy counts against the defendants to commit health care fraud and violate anti-kickback laws, as well as multiple substantive counts. The indictment alleges, in support of a health care fraud conspiracy and related substantive charges, that Lori Brill (“Brill”), mother of a hemophiliac son, ran a hemophilia care company known as Hemophilia Management Specialties, Inc. (“H.M.S.”), which provided cost-free services to bleeding disorder clients, including, among other things, ordering their extremely expensive protein replacement medication called “Factor” through speciality pharmacies Hemophilia Infusion Managers, L.L.C. (“H.I.M.”), located in Loxley, and MedfusionRx, L.L.C. (“Medfusion”), located in Birmingham. The indictment charges that, in an effort to increase commissions received from the pharmacies, Brill worked with her ex-husband Butch Brill and H.M.S. employees Ashley Sprinkle (“Sprinkle”) and Sherry Demouey, both of whom pleaded guilty in January to health care fraud charges stemming from this scheme, to falsify the Factor tracking logs of H.M.S. clients. Together, and at the direction of Lori Brill, they manipulated logs to indicate that H.M.S. clients took the maximum amount of Factor at the greatest frequency allowed under their prescriptions without verifying the clients’ actual usage. These logs were then forwarded to the pharmacies to order more Factor medication, who, in turn, billed the clients’ medical insurance providers, including Alabama Medicaid and Blue Cross Blue Shield of Alabama.
The indictment goes on to detail that, as part of this health care fraud conspiracy: Brill pressured some H.M.S. clients to re-order unneeded Factor medication and switch to a more expensive brand; Brill helped Travis Goodwin (“Goodwin”) enroll in Alabama Medicaid and then caused his Factor prescriptions to be billed through the pharmacies to that agency, although, as a Florida resident, Goodwin was ineligible for Alabama Medicaid benefits; and Brill forced Sprinkle to take her Factor medication during a time period that Sprinkle was trying to get pregnant and a physician had advised her to discontinue her Factor use.
The indictment also charges two separate kickback conspiracies against Brill, H.I.M. owners Eric Mosely and Tony Goins, and Medfusion owners Chris and Jeff Vernon. The indictment explains that Brill had unlawful commission agreements with the H.I.M. and Medfusion owners whereby she received a commission equal to a percentage of the profits the pharmacies generated by filling the Factor prescriptions of H.M.S. clients who were Medicaid recipients. In support of the substantive kickback charges against Brill and the pharmacy owners, the indictment details six illegal commission payments Brill received from the pharmacies totaling approximately $144,000.00. In addition, the indictment sets out a kickback conspiracy and substantive charges against the Vernons and Medfusion patient manager Leroy Waters (“Waters”). It is alleged that the Vernons and Waters had an illegal commission agreement which mirrored Brill’s, and that Waters received improper commission payments totaling approximately $45,000.00 based on the profits Medfusion brought in from filling his clients’ Factor prescriptions. The indictment further charges that the pharmacy owners violated anti-kickback laws by routinely waiving the Medicaid co-pays of Brill’s and Waters’ clients as an inducement for their continued business.
The indictment renews bankruptcy fraud charges against Waters that were originally the subject of a February indictment. Among other things, Waters is charged with purposefully understating his 2007 Medfusion earnings in bankruptcy filings by more than $250,000.00.
Lastly, the indictment seeks the forfeiture of approximately $29,000,000.00 in illegal proceeds traceable to the defendants’ scheme.
The charges against the defendants carry a maximum sentence of 20 years, a fine of up to $250,000.00, and other civil penalties and damages.
The case is being jointly investigated by the Federal Bureau of Investigation and the Department of Health and Human Services - Office of Inspector General. Assistant United States Attorneys Christopher J. Bodnar, Gregory A. Bordenkircker, and Adam W. Overstreet will prosecute the case for the United States.
As in all criminal cases, the indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by the defendants. The defendants, of course, are presumed innocent until and unless they are proven guilty at trial.