California pharmacist gets 15 years in prison for $11.4M fraud of military’s health plan

Sandy Mai Trang Nguyen, 42, of Irvine, was sentenced by United States District Judge Otis D. Wright II, who also ordered her to pay $11,098,756 in restitution.

At the conclusion of a five-day trial in November 2022, a jury found Nguyen guilty of 21 counts of health care fraud, and one count of obstruction of a federal audit.

Nguyen was the pharmacist-in-charge of the now-defunct Irvine Wellness Pharmacy (IWP) in Irvine. From late 2014 to May 2015, Nguyen and others under her supervision filled approximately 1,150 compounded prescriptions for pain, scarring and migraines that Tricare reimbursed for tens of thousands of dollars per prescription. Nearly all the prescriptions were sent to the pharmacy by so-called marketers who were paid kickbacks of upwards of 50% of the Tricare reimbursements.

Compounded drugs are tailor-made products doctors may prescribe when the Food and Drug Administration-approved alternative does not meet the health needs of a patient.

The beneficiaries were solicited to provide their Tricare insurance information for medications they did not seek out or need, and most were never examined by a physician. The prescriptions were electronically sent from marketers or telemedicine businesses and submitted by the pharmacy for reimbursement even though Tricare rules excluded reimbursements for claims based on telemedicine visits and would not, in any event, have authorized reimbursements for prescriptions obtained through the payment of kickbacks.

Nguyen was aware that the prescriptions - purportedly tailored to individual patients' needs - were purportedly written by physicians in states other than where the beneficiaries lived, multiple members of the same families received the same medications, and the same prescriptions were written for members of different patient populations, including a 13-year-old boy in Chicago who got the same prescription as a woman in Orange County who happened to be Nguyen's grandmother.

The pharmacy invoiced the beneficiaries to pay hundreds of dollars in required co-payments, but the beneficiaries stated that they knew nothing about co-payments and understood that the medications were fully covered by Tricare, according to trial testimony. The total co-payments due during the scheme exceeded $16,000, but the pharmacy never collected them.

Nguyen also obstructed a federal audit by providing bogus, cut-and-pasted prescriptions to frustrate Tricare's effort to validate millions of dollars paid for the same prescriptions.

During Nguyen's tenure as pharmacist-in-charge, Tricare paid $11,098,756 on the fraudulently submitted claims.

"At [Nguyen's] trial, the government proved that [Nguyen] knew that IWP was, essentially, a fraud factory that was churning out prescriptions solely to make a fast buck," prosecutors argued in a sentencing memorandum. "She routinely ignored the numerous red flags that indicated that the prescriptions were fraudulent."

On March 20, Judge Wright sentenced co-defendant Marcus Orlando Armstrong, 56, of Miami, to 91/2 years in federal prison for his role in the scheme to defraud Tricare. Armstrong was IWP's director of operations when the criminal activity occurred.

Co-defendants Leslie Andre Ezidore, 53, of West Los Angeles, and Alexander Michael Semenik, 51, of Las Vegas, have pleaded guilty to felony charges in this case and await sentencing.

The Department of Defense Office of Inspector General; the Defense Criminal investigative Service; the FBI; the Amtrak Office of Inspector General; IRS Criminal Investigation; the United States Department of Labor - Employee Benefits Security Administration; the California Department of Insurance; and the Office of Personnel Management Office of Inspector General investigated this matter.

Assistant United States Attorneys Mark R. Aveis and Ali Moghaddas of the Major Frauds Section are prosecuting this case.

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Original text here: https://www.justice.gov/usao-cdca/pr/orange-county-pharmacist-sentenced-15-years-federal-prison-helping-defraud-us