RGV Pharmacy Owner and Marketer Arrested In Connection with Health Insurance Fraud Scheme

McALLEN, Texas ? The owner of Penitas Family Pharmacy aka Riverside Pharmacy and a marketer employed by the pharmacy have been indicted in connection with a scheme to defraud Blue Cross and Blue Shield of Texas, announced Acting United States Attorney Abe Martinez.

A federal grand jury returned a 16-count sealed indictment against Omar Espericueta and Oscar Elizondo on July 18, 2017. It was unsealed in its entirety this afternoon as Elizondo, 47, of Pharr, turned himself in to authorities. He is expected to make his initial appearance before Judge Peter Ormsby Monday, July 24, 2017, at 10:30 a.m. The owner of the pharmacy - Espericueta, 45, of Mission - was taken into custody Thursday and made his initial appearance today before U.S. Magistrate Judge Dorina Ramos.

Both are charged with conspiracy to commit health care fraud, seven counts of health care fraud and six counts of aggravated identity theft.

According to the indictment, the scheme involved submitting more than $1.7 million in fraudulent claims to Blue Cross and Blue Shield of Texas for expensive pain patches and scar creams. The defendants allegedly targeted employers that carry employee health insurance through Blue Cross, such as the City of Mission, City of Pharr, Frontera Produce and Point Isabel Independent School District, among others. Working with contacts at those entities, Elizondo and other marketers offered meals, drinks and promises of "free" prescription pain patches and scar creams to entice employees to turn over their insurance information, according to the indictment. The insurance information and fraudulent prescriptions were then allegedly used to submit fraudulent and medically unnecessary claims to Blue Cross.

Many employees never received any pain patches or scar creams or saw a doctor to obtain a valid prescription, according to the charges. Other employees saw a doctor, but it was a doctor to whom Espericueta was allegedly paying kickbacks in the form of cash, loans and prescription drugs. The indictment further alleges that in some instances, the defendants set up a temporary office for the doctor in a vacant office or a rented recreational vehicle near the restaurant where they solicited employees for the sole purpose of writing fraudulent prescriptions.

Conspiracy to commit health care fraud and health care fraud carry a maximum punishment of 10 years in federal prison and a possible $250,000 maximum fine upon conviction. A convicted for aggravated identity theft carries a mandatory two?year additional prison term which must be served consecutively to any other prison sentence imposed.

The FBI, Mission Police Department, Texas Department of Insurance -- Fraud Unit and Texas Health and Human Services Commission conducted the investigation. Assistant United States Attorney Andrew Swartz is prosecuting the case.

An indictment is an accusation of criminal conduct, not evidence.

A defendant is presumed innocent unless convicted through due process of law.