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12th person pleads guilty in Mississippi pharmacy fraud

February 27, 2019

HATTIESBURG, Miss. (AP) — A Mississippi man has pleaded guilty in a fraud case that prosecutors say reaped more than $200 million from a federal military health insurer and others.

Randy Thomley of Hattiesburg entered his plea Tuesday in federal court to one count of conspiracy to commit health care fraud, and could face up to 10 years in prison at his July 2 sentencing. Prosecutors are dropping an earlier 26-count indictment that carried a potential 245-year sentence.

Prosecutors say Thomley and his wife, Hope Thomley, bribed health care providers to prescribe handcrafted high-dollar medications that were generally unnecessary. They targeted people insured by TRICARE, which covers military members, their families, retirees and some National Guard members and reservists. Prosecutors have said Advantage Pharmacy, partly owned by Hope Thomley, took in $192 million in revenue from TRICARE alone over several years.

Hope Thomley pleaded guilty to charges last week and could face up to 15 years in prison.

Pharmacists would concoct recipes for pain or scar creams that they would make by hand, prosecutors say. Such compounded medications are typically tailored to the needs of an individual patient. But in this case, pharmacists tailored them for maximum reimbursement, using expensive ingredients “without regard to the individual needs of the patients,” prosecutors have said.

Marketing companies, including one co-owned by Randy Thomley, would get health care providers to prescribe the creams. The marketers would sometimes pay prescribers kickbacks that are illegal under federal law, and the prescribers would sometimes write orders for the patients without examining them, according to prosecutors.

The Thomleys are agreeing to forfeit $29 million as part of their pleas, including $15 million in cash, three vehicles and 15 pieces of real estate.

Parts of the investigation became public knowledge after agents raided nine Mississippi pharmacies in January 2016. Randy Thomley is the 12th person convicted.

Last week, 51-year-old Joseph Wiley II of Monroe, Louisiana, was charged with one count of conspiracy to commit health care fraud. Wiley pleaded guilty a day later, waiving indictment as part of a plea deal.

Wiley owned Affordable Medication Solutions of West Monroe, Louisiana. Advantage and other pharmacies began paying Wiley’s company a monthly fee. In exchange, Wiley was supposed to be applying manufacturer coupons to covering the cost of co-pays for people getting the medicines. But the pharmacies were actually funneling money for the co-pays to Wiley. Co-pays for patients were being waived, because they otherwise might have refused to pay for ineffective but expensive medication they didn’t want. Instead, Wiley admitted to generating fake documents that helped the pharmacies escape audits, enabling the pharmacies to fraudulently bill insurers for at least $57 million.

Wiley faces up to 10 years in prison and a fine of up to $250,000 or twice his gain. He’s also agreeing to forfeit $300,000 in cash.

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