Three Mississippians arrested as part of $510 million healthcare fraud scheme

Published 8:48 am Thursday, September 26, 2019

Three Mississippians – including a pharmacy company owner and a physician – have been charged for their alleged roles in a scheme to defraud TRICARE and other health insurance companies, federal prosecutors said Wednesday.

The arrests were part of what prosecutors described as an “expansive” health care fraud bust across the Gulf Coast and involving dozens of suspects and multiple jurisdictions.

“Healthcare fraud harms us all,” said U.S. Attorney Mike Hurst of the Southern District of Mississippi. “When individuals put their greed above the interests and well-being of our men and women in uniform and our veterans, this office will be there to swiftly bring them to justice.”

Those arrested in Mississippi include:

Wade Ashley Walters, 52, of Hattiesburg, Mississippi, who is a co-owner of numerous compounding pharmacies and pharmaceutical marketing companies.

Walters was charged for his alleged role in a scheme to defraud TRICARE and other private health insurance companies.

Prosecutors say the scheme involved paying kickbacks to practitioners and marketers for the prescribing and referring of fraudulent prescriptions for medically unnecessary compounded medications that were ultimately dispensed by his pharmacies.

In addition, prosecutors say he helped launder the proceeds of the fraud scheme.

The indictment alleges that, based on these fraudulent prescriptions, Walters caused TRICARE and other health care benefit programs to reimburse his and other compounding pharmacies more than $510 million.

The case is being prosecuted by Assistant Deputy Chief Dustin Davis and Trial Attorney Sara Porter of the Fraud Section, Trial Attorneys Amanda Wick and Stephanie Williamson of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorney Mary Helen Wall of the Southern District of Mississippi.

Gregory Auzenne, M.D., 49, of Meridian, Mississippi, and Tiffany Clark, 45, of Meridian, Mississippi, were charged for their alleged participation in a scheme to defraud TRICARE and other private health insurance companies by prescribing medically unnecessary compounded medications in exchange for kickbacks and bribes.

The indictment alleges that Auzenne and Clark caused the submission of over $1.6 million in fraudulent claims to TRICARE. The case is being prosecuted by Trial Attorneys Jared Hasten and Sara Porter of the Fraud Section and Assistant U.S. Attorney Mary Helen Wall.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division said the operation involved charges against a total of 11 individuals across four federal districts for their alleged involvement in various schemes to defraud Medicare, Medicaid and TRICARE and to obtain oxycodone and other controlled substances by fraud. The conduct allegedly resulted in more than $515 million in fraudulent billings.

Those charged included physicians, licensed social workers, as well as other medical and business professionals.

In addition, in the state of Louisiana, 22 defendants, including 19 certified mental and home health professionals, have been charged with defrauding Medicaid out of approximately $300,000. These cases were investigated by Louisiana’s Medicaid Fraud Control Unit (MFCU).

“Fraud against our nation’s vital federal health care programs amounts to theft from American taxpayers,” Benczkowski said. “The Department of Justice, together with our law enforcement partners, will continue to investigate and prosecute aggressively those who bill these programs for medically unnecessary services, whether in the Gulf Coast or elsewhere in the United States.”

“Health care fraud steals valuable resources from those truly in need and tarnishes the hard-earned respect of honest health care providers who deliver legitimate health care for their fellow Americans every day,” said U.S. Attorney Brandon J. Fremin of the Middle District of Louisiana. “It is especially egregious when carried out by health care professionals who are betraying the trust given them by the community. As demonstrated by this takedown, this office remains committed to working with our outstanding partners in the Strike Force including federal, state, and local law enforcement and prosecutors in Louisiana and throughout the country to aggressively pursue those who defraud our health care systems. Our message is consistent: we will bring every available resource to bear in seeking justice through investigations and convictions of those who commit health care fraud. I want to commend the hard work of all who have been instrumental in this nationwide effort.”

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Among those charged in partnership between Strike Force attorneys and U.S. Attorney’s Offices are the following:

In the Middle District of Louisiana, four defendants have been charged.

J. Foster Chapman, D.O., 40, of Alexandria, Louisiana, was charged for his alleged participation in a scheme to prescribe medically unnecessary durable medical equipment, namely orthotics, to Medicare beneficiaries whom he never examined and in the absence of any doctor-patient relationship. According to the indictment, Chapman concealed the fraud with falsified orders that stated, among other things, that he consulted with the beneficiaries and conducted diagnostic tests, which were not conducted. The indictment alleges that Chapman caused the submission of over $4.8 million in fraudulent claims to Medicare. The case is being prosecuted by Trial Attorney Justin M. Woodard of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Kristen L. Craig of the Middle District of Louisiana.

Victor Clark Kirk, 70, of Baton Rouge, Louisiana, and Marilyn Brown Antwine, 51, of Baton Rouge, Louisiana, the former CEO and COO, respectively, of a federally qualified health center, were charged for their alleged roles in a scheme to defraud Medicaid. Specifically, the indictment alleges that Kirk and Antwine directed employees to falsely diagnose students with significant mental health disorders and subsequently submit false claims to Medicaid falsely claiming that psychotherapy services were provided, when in fact they were not. According to the indictment, during the relevant time period, the health center’s claims for purported group psychotherapy services totaled more than $1.8 million. The case is being prosecuted by Trial Attorney Justin M. Woodard and Assistant U.S. Attorney Jessica M.P. Thornhill of the Middle District of Louisiana.

In the Eastern District of Louisiana, three defendants have been charged.

Aaron Denn, 34, of Metairie, Louisiana, was charged for his alleged role in a scheme to obtain and divert oxycodone pills to the black market. The case is being prosecuted by Trial Attorney Jared Hasten.

Christie Lynn Browning, 40, of Metairie, Louisiana, was charged for her alleged role in a conspiracy to obtain oxycodone by fraud and to then distribute those oxycodone pills. The case is being prosecuted by Trial Attorney Jared Hasten and Assistant U.S. Attorney Myles Ranier of the Eastern District of Louisiana.

In the Northern District of Florida, two defendants have been charged.

Helen Elizabeth Storey, 37, of Tallahassee, Florida, and Stephanie Lynn Fleming, 42, of Tallahassee, Florida, the owner of, and a licensed mental health counselor at, a Tallahassee-based counseling center, were charged for their alleged participation in a scheme to defraud Medicaid by submitting false and fraudulent claims for purported behavioral health services, including psychotherapy, that were not provided. According to the indictment, Fleming and Storey submitted approximately $250,000 in false and fraudulent claims to Medicaid. The case is being prosecuted by Assistant U.S. Attorney Justin Keen of the Northern District of Florida.