Former Miramar Marines, sailor plead guilty in $65 million prescription fraud case

Three former military service members based at Marine Corps Air Station Miramar, including a Marine from Chula Vista, pleaded guilty Tuesday in federal court to participating in a nearly $66 million fraud scheme that targeted TRICARE, the military's medical insurance provider.

Federal prosecutors announced additional charges Tuesday against the alleged ringleaders of the fraud scheme, a Tennessee couple who prosecutors say fraudulently amassed $45 million by using Marines and sailors stationed in San Diego County as pawns to recruit other service members to participate in their kickback plot.

The couple, 56-year-old Jimmy Collins and his 33-year-old wife, Ashley, have pleaded not guilty to numerous charges related to the scheme, while at least eight co-defendants have now pleaded guilty. Prosecutors allege the husband and wife used their ill-gotten fortune to buy property around Tennessee, Aston Martin cars and a yacht.

Those who pleaded guilty in San Diego Tuesday were Jeremy Syto, a 26-year-old Marine from Chula Vista, as well as 33-year-old Kyle Adams, a Navy sailor from Victoria, Texas, and 32-year-old Marine Daniel Castro from Oak Lawn, Ill.

Syto, Adams and Castro were all based at Miramar. They admitted to working as recruiters for Jimmy and Ashley Collins, and are set to be sentenced in September.

At the center of the alleged scheme are compound medications — drugs that are custom-made by pharmacists to tailor to a patient's needs and are significantly more expensive than typical prescription drugs. The ingredients are not FDA approved.

Military members in San Diego would be paid to recruit other service members to participate in a fake medical study, according to the allegations. The participants, described by prosecutors as "straw beneficiaries," were paid $100 to $300 to speak with a doctor in a telemedicine session and would be prescribed the compound medication.

Prosecutors allege that doctors and medical professionals employed by Jimmy and Ashley Collins would then sign off on the prescriptions, but instead of sending them to the "straw beneficiaries," the defendants would instead send them to a Utah pharmacy, which filled the prescriptions and received "massive reimbursement" from TRICARE.

At least five people, including two Marines, and the corporate owner of the Utah pharmacy have previously pleaded guilty for their roles in the kickback scheme. One of the Marines, San Diego resident Josh Morgan, was also based at Miramar.

The others who have pleaded guilty include two Tennessee physicians, Carl Lindblad and Susan Vergot, and a nurse practitioner, Candace Cravens, who worked at a clinic run by Jimmy and Ashley Collins and signed off on the fraudulent prescriptions.

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