Couple pleads guilty to taking part in $65 million Tricare fraud

A married couple in Birchwood, Tennessee, has pleaded guilty to participating in a health care scheme that defrauded Tricare — the health care program that covers United States service members — out of more than $65 million, according to a news release from the U.S. Attorney’s Office in the Southern District of California.

Jimmy, 59, and Ashley, 37, Collins on July 28 admitted in federal court they worked with others to recruit Tricare beneficiaries who were willing to sign up to receive expensive compounded medications, even though the beneficiaries did not need the medications. The beneficiaries’ information was sent to Choice MD, a Cleveland, Tennessee, medical clinic co-owned and operated by the Collinses, the release states.

At Choice MD, doctors and medical professionals employed by the Collinses, including Dr. Susan Vergot, Dr. Carl Lindblad and nurse practitioner Candace Craven, wrote prescriptions for the Tricare beneficiaries despite never conducting medical reviews or examinations of the patients in person. Once the prescriptions were signed by the doctors, the prescriptions were sent directly to The Medicine Shoppe, a pharmacy in Bountiful, Utah, which filled the prescriptions and received massive reimbursement from Tricare, according to the release.

From December 2014 to May 9, 2015 — the day Tricare stopped reimbursing for compounded medications — the doctors at Choice MD authorized 4,442 prescriptions and billed Tricare more than $65 million for the prescriptions.

The owners of The Medicine Shoppe then paid kickbacks to the Collinses based on a percentage of the Tricare reimbursement for the prescriptions referred by the Collinses’ recruiter network. Between February and July 2015, the kickback payments to the Collinses totaled at least $45.7 million dollars. The Collinses, in turn, paid kickbacks to the recruiters working as part of their network, including defendants Josh Morgan, Kyle Adams and Daniel Castro, among others.

Among the property and items purchased by the Collinses and others with the proceeds of the scheme that been seized include an 82-foot yacht; multiple luxury vehicles, including two AstonMartins; a multimilliondollar investment annuity; dozens of pieces of farm equipment and tractortrailer trucks; and three pieces of Tennessee real estate.

The Collinses are the last members of the scheme to plead guilty. The doctors and nurse practitioner who prescribed the unnecessary prescriptions, the corporate owner of the pharmacy that filled the prescriptions and the patient recruiters have all pleaded guilty for their roles to commit health care fraud and admitted their roles in the scheme, according to the release.

Jimmy and Ashley Collins are scheduled to be sentenced at 9 a.m. Oct. 27 before U.S. District Judge Janis L. Sammartino.