Tennessee couple pleads guilty to $65 million TRICARE fraud

Jimmy Collins, 59, and Ashley Collins, 37, are scheduled for sentencing at 9 a.m. on Oct. 27, before U.S. District Judge Janis L. Sammartino.

He faces a 10-year prison sentence and a $100,000 fine. His wife faces five years in prison and a $250,000 fine.

An order of restitution will require the defendants pay $65,679,512.71 to DHA/TRICARE.

The couple admitted they worked with others to recruit TRICARE beneficiaries who were willing to sign up to receive expensive compounded medications, even though the beneficiaries did not really need the medications.

The beneficiaries' information was sent to Choice MD, a Tennessee medical clinic co-owned and operated by the Collinses.

Doctors and medical professionals employed by the Collinses at Choice MD, Cleveland physicians Dr. Susan Vergot, Dr. Carl Lindblad, and nurse practitioner Candace Craven, then wrote prescriptions for the TRICARE beneficiaries, despite never conducting a medical review or examination of the patients in person.

Once signed by the doctors, the prescriptions were not given to the straw beneficiaries, but sent directly to The Medicine Shoppe, a pharmacy in Bountiful, Utah, which filled the prescriptions and received massive reimbursement from TRICARE.

Between December 2014 and May 9, 2015 — the day that TRICARE stopped reimbursing for compounded medications — the doctors working for the Collinses at Choice MD authorized 4,442 prescriptions and billed TRICARE $65,679,512 for these prescriptions.

The owners of The Medicine Shoppe then paid kickbacks to the Collinses based on a percentage of the TRICARE reimbursement paid for the prescriptions referred by the Collinses' recruiter network.

Between February and July 2015, the kickback payments to the Collinses totaled at least $45.7 million.

The Collinses, in turn, paid kickbacks to the recruiters working as part of their network, including defendants Josh Morgan, Kyle Adams, and Daniel Castro, among others.

The United States has seized property and items purchased by the Collinses and others with the proceeds of the scheme.

Included among the items was an 82-foot yacht; multiple luxury vehicles, including two Aston-Martins; a multimillion-dollar investment annuity; dozens of pieces of farm equipment and tractor-trailer trucks; and three pieces of Tennessee real estate.

The Collinses are the last members of the conspiracy to plead guilty.

The doctors and nurse practitioner who prescribed these unnecessary prescriptions, the corporate owner of the pharmacy that filled these unneeded prescriptions, and the patient recruiters have all pleaded guilty for their roles in the conspiracy to commit healthcare fraud and admitted their roles in the fraudulent scheme.

"The scheme alleged in this case resulted in massive losses to a taxpayer-funded healthcare program meant to help members and veterans of our armed forces," said U.S. Attorney Randy Grossman. "The days of yachts and luxury cars are gone. With these guilty pleas, we are holding these defendants accountable for their crimes."

Grossman thanked the prosecution team and investigating agencies for their excellent work on this case.

"The Department of Defense Office of Inspector General, Defense Criminal Investigative Service is committed to protecting the integrity of TRICARE, the health care system for our military members and their families," said Special Agent-in-Charge Michael C. Mentavlos of the DCIS Southwest Field Office. "Today's outcome demonstrates our unwavering commitment to hold accountable those that perpetrate fraud against TRICARE and put its beneficiaries at risk."

Special Agent in Charge Greg Gross of the NCIS Economic Crimes Field Office, said the Collinses "operated a TRICARE scheme that defrauded the American taxpayer of more than $65 million in healthcare resources that should have been directed to service members, retirees, and their dependents."

"This guilty plea should serve as a warning that NCIS and our partners are dedicated to rooting out fraud that harms the military community," he said.