Case Results: Pharmacy Owner Acquitted of Healthcare Fraud and $14.5M Medicare Kickbacks

Professional:
Pharmacy Owner

Primary issue:
In December 2022, prosecutors brought charges against a San Antonio pharmacy owner who, along with his partner, operated several Medicare-registered pharmacies. Prosecutors alleged the pharmacies paid kickbacks to telemarketing companies in exchange for doctors prescribing unnecessary hip, knee and back braces for elderly patients. The charges brought forth included one count of conspiracy to pay and receive health care kickbacks, one count of conspiracy to commit healthcare fraud, six counts of healthcare fraud, and six counts of aggravated identity theft and aiding and abetting. Additionally, the pharmacy owner was charged with four counts of payment of illegal healthcare kickbacks totaling $14.5 million. Government prosecutors alleged that he paid $50,000 a week to a marketer under a sham marketing services agreement as an illegal inducement or kickback for the referral of Medicare beneficiaries. The alleged kickbacks were paid in exchange for signed doctor’s orders issued for unnecessary durable medical equipment including hip, knee and back braces.

Argument:
White Collar defense attorney Jonathan Meltz argued that although his client trusted the wrong people and made many mistakes in his business, he acted in good faith, sincerely believing himself to be in compliance with the law. Mistakes are not fraud and mistakes are not crimes. Additionally, we argued that the government’s case was a rushed decision to arrest based only on data driven analytics without a proper investigation. Attorney Meltz had to make sure that the jury knew that advertising and marketing for durable medical equipment to Medicare beneficiaries is not illegal and there is no kickback if a beneficiary opts-in to marketing and requests more information for the durable medical equipment.

Result:
After a three week trial, followed by two days of jury deliberations, on August 12, 2024 a federal grand jury in San Antonio found our client and his partner not guilty for their roles in the alleged $14.5 million Medicare kickbacks. With Attorney Meltz’s solid legal work, attention to detail, and a complete grasp of the law, the jury found that there was “no evidence” that our client did things “willfully.” “The evidence was not there to prove his guilt.”,  “we needed more evidence, more that we could sink our teeth into” and that what the jury felt in their “gut” did not match the evidence.”  According to the jury, our client and his business partner were doing due diligence and trying to follow the rules in good faith.” A juror brought up the distinction between fraud, waste, and abuse. The juror said that it was important to know that fraud meant intentional and said that it was “hard to determine intent.”  

Areas of Law:
Pharmacy Ownership
Healthcare Fraud
Federal Anti-Kickback Statute

Attorney:
Jonathan Meltz

Disclaimer:
This information is a sample of our past results. Prospective clients may not obtain the same or similar results. Every case is different, and each case must be evaluated and handled on its own merits. The circumstances of your case may differ from the results provided. The information provided has not been reviewed or approved by the State Bar.