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Four men, seven companies indicted for billion-dollar health care scheme

The indictment alleges these individuals and companies conspired to deceive tens of thousands of patients and more than 100 doctors located in the Eastern District of Tennessee and across the country for the purpose of defrauding private health care benefit programs for nearly three years.
Credit: Zolnierek

Greeneville, Tenn. — Four men and seven companies were indicted in a $1 billion telemedicine fraud conspiracy on Oct. 12, according to the District Court for the Eastern District of Tennessee.

The court also unsealed an additional two plea agreements and an information charging another individual and his company for their role in the scheme.

Andrew Assad, 33, of Palm Harbor, Florida; Peter Bolos, 41, of Lutz, Florida and Michael Palso, 44, of Odessa, Florida, were indicted with their compounding pharmacies, Synergy Pharmacy Services in Palm Harbor and Precision Pharmacy Management in Clearwater.

Co-conspirator Larry Everett Smith, of Pinellas Park, Florida, and his companies Tanith Enterprises, ULD Wholesale Group, Alpha-Omega Pharmacy, all located in Clearwater; Germaine Pharmacy located in Tampa, Florida and Zoetic Pharmacy located in Houston, Texas, were also named as defendants.

All the defendants were charged with conspiracy to commit health care fraud, mail fraud and introducing misbranded drugs into interstate commerce, according to authorities.

On September 26, 2018, HealthRight LLC, a telemedicine company with locations in Pennsylvania and Florida, and its CEO Scott Roix, 52, pleaded guilty to felony conspiracy for their roles in the telemedicine health care fraud scheme in a criminal information on Sept. 26, according to officials. Roix and HealthRight LLC also pleaded guilty to conspiring to commit wire fraud in a separate scheme for fraudulently telemarketing dietary supplements, skin creams and testosterone supplements through concocted claims of efficacy and intentionally deficient customer service designed to stall consumer complaints.

The indictment alleges that from June 1, 2015 through April 1, 2018, these individuals and companies, with other persons and companies known to the grand jury, conspired to deceive tens of thousands of patients and more than 100 doctors located in the Eastern District of Tennessee and across the country for the purpose of defrauding private health care benefit programs, such as Blue Cross Blue Shield of Tennessee out of approximately $174,000,000. The indictment further alleges that the defendants submitted not less than $931,000,000 in fraudulent claims for payment.

According to the indictment, the defendants set up an elaborate telemedicine scheme in which HealthRight fraudulently solicited insurance coverage information and prescriptions from consumers

across the country for prescription pain creams and other similar products.

The indictment states that doctors approved the prescriptions without knowing the defendants were massively marking up the prices of the invalidly prescribed drugs, which the defendants then billed to private insurance carriers.

Assad, Bolos, Palso, and Smith appeared in court on Oct. 11 before the U.S. District Court for the Middle District of Florida, according to authorities.

All four individual defendants were released on bond and are scheduled for an initial appearance and arraignment in the U.S. District Court in the Eastern District of Tennessee before U.S. Magistrate Judge Clifton Corker on Oct 25.

If convicted, Assad, Bolos, Palso and Smith face a term of up to 20 years in prison as to each mail fraud charge, up to 10 years in prison for the conspiracy and up to three years in prison for introducing misbranded drugs into interstate commerce, according to officials.

Additionally, they face fines of up to $250,000 and up to three years of supervised release as to each count. The companies face fines of up to twice the gross loss sustained as a result of the conspiracy. The indictment also seeks forfeiture of approximately $154,000,000, according to authorities.

Roix and HealthRight pleaded guilty before the Eastern District of Tennessee. Roix faces a statutory maximum sentence of five years of imprisonment for each conspiracy, according to officials. The Court set sentencing for Feb. 13, 2019.

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