Convictions in $45 Million Medicaid-Medicare Fraud Scheme Announced by FDA’s Office of Criminal Investigation

The Food and Drug Administration has announced that it’s Office of Criminal Investigation (OCI) has been successful in obtaining a sweeping conviction in a massive medical products diversion scheme that defrauded Medicaid and Medicare programs of some $45 million.

The convictions were obtained through the efforts of the U.S. Attorneys Office for the Southern District of Georgia in conjunction with the Internal Revenue Service — Criminal Investigation Division, the U.S. Immigration and Customs Enforcement, and that State of Florida Attorney General’s Medicaid Fraud Control Unit, as well as the FDA’s OCI, and followed a six-week trial in the U.S. District Court for the Southern District of Georgia.

Martin J. Bradley III and Martin J. Bradley, Jr., officers of Bio-Med Plus, a Florida pharmaceutical wholesale distributor, were convicted of more than two hundred and forty-seven criminal counts stemming from the illegal scheme that included wire fraud, money laundering, conspiracy, and racketeering. Albert Tellechea, president of Infustat Inc., was also convicted of conspiracy to commit wire fraud and for paying kickbacks to health care providers.

During its extensive investigation, the OCI “uncovered various illegal schemes in which the defendants bought and sold millions of dollars of illegally obtained medications, primarily blood derivative drugs, which are used in the treatment of AIDS, cancer, hemophilia, and other ailments.”

According to Margaret O’K. Glavin, Associate Commissioner for Regulatory Affairs: “This type of illicit diversion not only defrauds and deceives the unsuspecting public, but also presents potential health risks to patients who rely on these critical medications for their treatment. Thanks to the aggressive work of our Office of Criminal Investigations, FDA was able to halt these greedy and unlawful actions, which endangered the public health by subverting the integrity of the legitimate pharmaceutical distribution system.”

One of the schemes involved the payment of kickbacks to physicians who wrote bogus prescriptions for injectable blood-based medicines, many of which cost thousands of dollars per treatment.

These prescriptions were then submitted for payment to Florida and California Medicaid and Medicare programs and the medications diverted to Bio-Med Plus Inc., where they where then sold in the open pharmaceutical wholesale market.

The Bradleys now face significant penalties that include incarceration, fines, and restitution. The government is the forfeiture of over $39,000,000 in assets owned by the Bradleys and Bio-Med Plus. A sentencing date has not yet been announced.

Bio-Med Plus, Inc., was started by the Bradley’s in 1995, and “quickly grew to be the fourth largest wholesaler of blood-based drug products in the country, with annual sales of more than $200 million, mostly to hospitals.”

This prosecution and conviction reveals the extent to which various government reimbursement programs are exploited and defrauded thereby driving up medical costs in the U.S. and lining the pockets of unscrupulous wholesalers, doctors, and other healthcare providers in the pharmaceutical distribution system.

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