Prescription drug fraud continues to present a widespread, multifaceted, and devastating cost to the American people. The abuse of prescription medication has a tremendous cost to us all, and we must remain committed to fighting opioid dependence, addiction, and crime.
Most providers are honest, but some take advantage of the system and look for ways to make a quick buck off insurance companies.
The National Insurance Crime Bureau (NICB) continues to assist with many investigations concerning prescription drug fraud, “pill mills,” and kickbacks. One in particular involved the arrest and conviction of William Hickman.
NICB Supervisory Special Agent Terri DiGiorgio assisted the Atlantic County Prosecutor’s Office, and the FBI Atlantic City Resident Agency in the investigation of William Hickman and Boardwalk Medical LLC.
A Department of Justice news release stated William Hickman exploited patients medical insurance plans at the expense of New Jersey taxpayers. According to the FBI, Hickman created an organized ring of individuals to recruit patients. Their duties were to find New Jersey public employees and others with insurance coverage administered by “Pharmacy Benefits Administrator”, prescribe medications with high insurance reimbursement, and give 12 months worth of refills. Medical providers, working with Hickman, would then sign the prescription forms without even seeing the patient(s).
Federal investigators say, these patients were compensated for receiving the compounded medication. The “Pharmacy Benefits Administrator” paid the compounding pharmacy more than $50 million for the medications. William Hickman ended up making in excess of $26 million for the compound medications prescribed by him and his conspirators.
- On June 16, 2020, William Hickman pleaded guilty to one count of conspiracy to commit health care and wire fraud and one count of conspiracy to commit money laundering. In his plea agreement, Hickman agreed to pay restitution of $53,037,639 and to the entry of a forfeiture money judgment for $26,241,327. Hickman also agreed to forfeit specific property obtained with criminal proceeds, including five investment accounts and four real estate parcels.
- June 26, 2020 - Dr. Michael Goldis pleaded guilty to making false statements relating to health care matters.
- June 25, 2020 - Dr. Brian Sokalsky was charged with conspiracy to commit health care fraud and wire fraud.
- December 16, 2019 - Dr. Daniel Oswari pleaded guilty to making false statements relating to health care matters. Oswari also pleaded guilty to a separate conspiracy to take kickbacks for referring laboratory work and signing prescriptions.
- September 2017 - Dr. John Gaffney pleaded guilty, admitting to signing off on fraudulent compound medication prescriptions for more than 200 individuals and received thousands for his role in the scheme.
The NICB's close working relationship with federal law enforcement and member companies increase our ability to assist in large criminal investigations. As the opioid crisis worsens, public awareness to this issue has grown, as more news stories highlight the link between addiction and crime. The crime, in turn, has a direct impact on the insurance industry in the form of higher insurance costs.