Medical equipment over dollar bills

Former Alabama pharmacy owner pleads guilty in $200 million health care fraud scheme

Federal authorities announced the prosecution of a former pharmacy co-owner and chief executive who orchestrated a massive health care fraud scheme. The scheme was designed to cheat private and government health insurance programs out of more than $200 million.

The Case of John Jeremy Adams

John Jeremy Adams, 39, of Panama City Beach, Florida, pleaded guilty to 16 counts of health care fraud, seven counts of spending the proceeds of health care fraud, one count of conspiring to commit fraud, and one count of conspiring to pay kickbacks, federal officials said.

As co-owner and CEO of Northside Pharmacy in Haleyville, Alabama, Mr. Adams is one of 23 defendants to plead guilty to a prescription drug-billing scheme that used insurers as their “personal piggy banks,” according to assistant U.S. Attorney and lead prosecutor Chinelo Diké-Minor. The pharmacy did business as Global Compounding Pharmacy. Prosecutors have charged the defendants with more than 100 counts of fraud between them so far.

Others implicated in the fraud include two nurse practitioners, the COO, a vice president of sales, an operations manager, a district manager, and multiple sales representatives.

Under Mr. Adams’ direction, Global Compounding Pharmacy billed insurers for medically unnecessary prescription drugs, court documents stated. Mr. Adams also paid prescribers to write prescriptions and directed employees to get medically unnecessary drugs for themselves, family members, and friends.

Mr. Adams also pleaded guilty to altering prescriptions by adding other, non-prescribed drugs; automatically refilling prescriptions regardless of the patients’ needs; routinely waiving and discounting co-pays to coax patients to obtain drugs they didn’t need; and billing for drugs without patients’ consent or knowledge.

The scheme targeted multiple health insurance plans, including Blue Cross Blue Shield of Alabama, and programs providing health insurance to the elderly, disabled, members of the military, and veterans, such as Medicare, TRICARE, and CHAMPVA, among others.

When officials attempted to police the pharmacy’s activity, Mr. Adams and other defendants evaded and obstructed them. They provided false information in response to audits and diverted their billing through affiliated pharmacies.

Shameless Fraud

According to the plea agreement, Mr. Adams not only directed the massive health care fraud scheme, but he also joked about it.  The court documents describe a text exchange between him and another defendant in which they discuss altering prescriptions. She tells him she will be getting him white-out as a birthday gift, and he responds, “Yep.  Made us money.”

“These defendants committed a reprehensible federal crime when they chose to steal funds designated to care for the sick,” U.S. Attorney Jay Town said. “Especially in this day and time where our health care system has the potential to be overwhelmed, we can ill afford to allow the wellness of many to be sacrificed by the greed of a few.”

Adrian Gonzalez, Postal Inspector in Charge, Houston Division, said that health care fraud schemes are expensive to everyday, honest people.

“In addition to undermining public health and safety, health care fraud cheats Americans out of more than eighty billion dollars a year in higher premiums and increased out-of-pocket expenses,” he said.

Federal officials said that of the $200 million Mr. Adams’ pharmacy falsely billed to insurers, it received more than $50 million.

Fraud Lawyers

Beasley Allen lawyer Ali Hawthorne has focused her practice primarily on complex litigation on a national level. Most recently, she has been involved in several litigations in multiple states that seek to recover money on behalf of the states that paid for pharmaceutical products and devices as a result of fraudulent and deceptive acts. She would be happy to discuss any potential claims related to health care and pharmaceutical fraud.

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