A federal grand jury in McAllen returned the 15-count sealed indictment on Nov. 15, 2011. In it, Garza is charged with one count of conspiracy to defraud the Texas Medicaid/Vendor Drug program, one count of conspiracy a defraud Humana Insurance, seven counts of submitting false and fraudulent claims to the Texas Medicaid/Vendor Drug program and five counts of submitting false and fraudulent claims to Humana Insurance. The indictment also charges Flores with one count of conspiracy a defraud the Texas Medicaid/Vendor Drug program and seven counts of submitting false and fraudulent claims to the Texas Medicaid/Vendor Drug program. The indictment was unsealed today after the pair was taken into custody by federal and state authorities this morning. Both appeared before United States Magistrate Judge Dorina Ramos today for an initial appearance on the charges and a detention hearing. Judge Ramos ordered that Garza be released on a $100,000 bond with a 10 percent cash deposit and that Flores be released on a $50,000 unsecured bond. Garza and Flores are scheduled to be arraigned on Nov. 23, 2011, at 11:00 a.m.
Garza is a pharmacist and the owner and operator of Sara’s Pharmacy and Gift Corner located in Mission, Texas, while Flores was formerly employed by Garza as the senior pharmacist technician at Sara’s Pharmacy. In July 2011, agents from the FBI and the Medicaid Fraud Control Unit of the Texas Attorney General’s Office executed a federal search warrant and seized documents and computers at Sarah’s Pharmacy and Gift Store. The pharmacy closed on or about Oct. 28, 2011, while the gift store remains operational.
The indictment alleges that Garza and Flores conspired to send false and fraudulent bills to the Texas Medicaid/Vendor Drug program and to Humana Insurance and that they submitted false and fraudulent claims to Medicaid/Vendor Drug and to Humana for prescription medications that were never dispensed or provided to the Medicaid beneficiaries or the persons insured by Humana. The indictment alleges that false and fraudulent claims for prescription medication were also submitted to other health care benefit programs such as Blue Cross/Blue Shield and Caremark. Not only were the false and fraudulent claims submitted for prescription medications that were never dispensed but some of the claims were for prescription medications used to treat medical conditions that the “patients” never had, according to the indictment. In some cases, the doctors whose names were used on the prescriptions had never seen the “patients.” To cover up their fraudulent scheme and billings, the pair forged prescriptions, forged doctors’ signatures on prescriptions, forged patients’ signatures on logs that purportedly indicated that the patient had received medications and altered pharmacy records.
According to the indictment, Garza and Flores caused the Medicaid/Vendor Drug program to pay more than $461,951 for fraudulent claims for medications that never dispensed to patients. Humana is alleged to have paid Garza an excess of $78,711 for similar fraudulent claims. As a result of this fraudulent scheme, an excess of $540,663 was to paid to Sara’s Pharmacy from on or about Nov. 15, 2006, through on or about June 17, 2011.
Each of the 15 counts of the indictment carries a maximum punishment of 10 years in prison and up to a $250,000 fine plus up to three years of post prison supervised release. The investigation leading to the charges in this case was conducted by the FBI and the Texas Attorney General’s Medicaid Fraud Control Unit. Assistant United States Attorney Casey N. MacDonald and Special Assistant United States Attorney Rex G. Beasley are prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
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