A Mississippi pharmacist pleaded guilty today for his role in a multimillion-dollar scheme to defraud TRICARE and private insurance companies by paying kickbacks to distributors for the referral of medically unnecessary compounded prescription medications that were ultimately dispensed by his pharmacies.

The conduct allegedly resulted in more than $180 million in fraudulent billings, including more than $50 million paid by federal healthcare programs.

According to court documents, David “Jason” Rutland, 42, of Bolton, a pharmacist and co-owner of various compounding pharmacies, admitted that he participated in a scheme to defraud TRICARE and other health care benefit programs by distributing medically unnecessary compounded medications by, among other things: adjusting prescription formulas to ensure the highest reimbursement without regard to efficacy; soliciting recruiters to procure prescriptions for high-margin compounded medications and paying those recruiters commissions based on the percentage of reimbursements paid by pharmacy benefit managers and health care benefit programs, including commissions on claims reimbursed by TRICARE; and routinely and systematically waiving and/or reducing copayments to be paid by beneficiaries and members, including utilizing a purported copayment assistance program to falsely make it appear as if Rutland’s pharmacy and its affiliate compounding pharmacies had been collecting copayments.

Rutland pleaded guilty to conspiracy to defraud the United States and solicit, receive, offer and pay illegal kickbacks, and faces a maximum penalty of five years in prison. Sentencing has been scheduled for Nov. 30. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Rutland must also pay restitution and forfeit all assets traced to the ill-gotten gains.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Darren J. LaMarca for the Southern District of Mississippi; Special Agent in Charge Michelle Sutphin of the FBI’s Jackson Field Office and Special Agent in Charge Cynthia A. Bruce of the Department of Defense Office of Inspector General Defense Criminal Investigative Service (DCIS) Southeast Field Office made the announcement.

The FBI and DCIS are investigating the case.