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90%+ SUCCESS RATE
AVOIDING CRIMINAL CHARGES

Dr. Nick Oberheiden
Founder

Aaron Wiley
Former State &
Federal Prosecutor

S. Amanda Marshall
Former U.S. Attorney

Bill McMurrey
Former DOJ-Trial Attorney

Lynette Byrd
Former Assistant
U.S. Attorney

  • Federal Criminal Defense
  • Federal Trial Lawyers
  • Search Warrant Defense
  • Grand Jury Subpoenas
  • OIG Subpoenas
  • Whistleblower Cases
  • FBI, DEA, IRS, OIG, HHS Cases

Defending Compound Pharmacy Fraud in New Mexico

With many pharmacists seeing the need to provide personalized drugs for their patients, establishment of compounding pharmacies has recently been on the rise. Compounding allows pharmacists to do things like provide reduced dosages for children, engineer medications to work around patients’ allergies, and create creams instead of pills for patients who find it difficult to consume oral medications. However, as more and more compound pharmacies open their doors to meet patients’ needs, the government needs to pay close attention for potential signs of fraud.

Fraud is not only a serious civil offense – it also may constitute a federal felony. As a result, not only can the financial liability for fraud be insurmountable, but the government may also seek to put the pharmacy’s owners and operators in prison. The risks of being found liable or guilty for Medicare, Medicaid, Tricare, and other types of health care fraud need to be taken extremely seriously, and should caution you to invest your time and resources in working with an experienced federal fraud lawyer to develop a strategic and thoughtful defense plan.

Oberheiden, P.C. is a team of former federal prosecutors and experienced defense counsel. If you have received a subpoena from the Office of Inspector General (OIG) or been contacted by federal agents, or if you are the target of an ongoing government investigation in New Mexico, you should call (800) 719-7249 immediately to speak with:

We offer free initial consultations to all potential clients. Contact us today to get a former federal prosecutor’s thoughts on your case.

What Are Some Common Accusations Involving Compounding Fraud?

Over the past few years, the federal authorities have been increasingly executing criminal search warrants on compound pharmacies. While indictments for health care fraud often focus on falsified records and kickbacks, the most common fraud charges against compound pharmacies actually center on the pharmacies’ ability to bill for each ingredient in a compound formulation.

For example, U.S. Attorneys will often accuse pharmacists of adding ingredients to compounds that are unnecessary and do not benefit the patient, but which are merely added in order to increase the pharmacy’s bottom line. In addition, the federal government will often file fraud charges against compound pharmacies for overbilling, billing for unnecessary products, providing automatic on-going refills, mass compounding, and manufacturing compound drugs that are identical to commercially-available alternatives.

What Are the Penalties for Compounding Fraud?

Like most allegations of health care fraud, the government investigates compound pharmacy fraud under the False Claims Act and the general health care Fraud Provision. This gives the government the ability to ask for reimbursements and fines (civil penalties) and to criminally prosecute the pharmacy’s owners and operators in federal court.

18 U.S.C. Sect. 1347 (Health Care Fraud)(a)

 Whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice—

(1) to defraud any health care benefit program; or

(2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program, in connection with the delivery of or payment for health care benefits, items, or services, shall be fined under this title or imprisoned not more than 10 years, or both. If the violation results in serious bodily injury (as defined in section 1365 of this title), such person shall be fined under this title or imprisoned not more than 20 years, or both; and if the violation results in death, such person shall be fined under this title, or imprisoned for any term of years or for life, or both.

(b) With respect to violations of this section, a person need not have actual knowledge of this section or specific intent to commit a violation of this section.

If found guilty of compound pharmacy fraud, targets of federal investigations can face civil or criminal fines, recoupment requests, non-payment of future reimbursement claims, exclusion from federal health care programs, treble damages, attorneys’ fees, and incarceration in a federal prison.

31 U.S.C. Sect. 3729 et seq. (False Claims Act)

1. a) Liability for Certain Acts.—

(1) In general.— Subject to paragraph (2), any person who—

(A) knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval;

(B) knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim;

(C) conspires to commit a violation of subparagraph (A), (B), (D), (E), (F), or (G);

is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note; Public Law 104–410 [1] ), plus 3 times the amount of damages which the Government sustains because of the act of that person.

Importantly, in order to obtain a conviction, the government does not need to show that you had a specific intent to violate the law. In fact, the government does not even need to prove actual knowledge of the wrongfulness of the transaction. The mere fact that wrong bills were submitted is enough to establish liability and criminal culpability for compound pharmacy fraud.

Who Is Investigated?

The federal statutes that prohibit compound pharmacy fraud apply to any individual or business that directly or indirectly receives payment from the United States government. This includes:

  • Business Owners
  • CEOs, CFOs, and COOs
  • Physician Owners
  • Physician Referrals
  • Pharmacists
  • Employees and Marketers

What Happens In a Compound Pharmacy Fraud Investigation?

Compound pharmacy fraud is investigated by the Office of Inspector General (OIG), the Department for Health and Human Services (HHS), the Department of Labor (DOL), the Department of Justice (DOJ), the Federal Bureau of Investigation (FBI), the Drug Enforcement Agency (DEA), and the Food and Drug Administration (FDA).

A Subpoena from the OIG

Many cases begin with the pharmacy receiving a subpoena from the OIG. This subpoena will typically ask the pharmacy to produce company records, financial statements, marketing agreements, contracts with physicians, and other pertinent (or not so pertinent) documentation. While responding to a subpoena may seem harmless, the true danger with these subpoenas is that it is initially unclear whether the OIG’s investigation is civil or criminal in nature. However, our experienced fraud defense lawyers will often read between the lines to identify whether you are facing a civil or criminal investigation.

Federal Agents at Your Door

Alternatively, agents from the DEA, FDA or FBI may simply show up at your door and ask to speak with employees or staff. These agents may or may not have a search warrant. Regardless, for your protection, it is absolutely imperative that you insist on having your attorney present. Federal agents are trained to interview people and to gather information – often without revealing the true reason for their inquiries. As a result, while their questions may seem harmless, anything you or your employees say could end up being used against you.

In either situation, the key is to call an experienced attorney, such as one of the former health care prosecutors of Oberheiden, P.C., as soon as possible. Many compound pharmacy owners only face charges because of mistakes they made during the initial stages of their investigation. To avoid making mistakes that could affect you and your business for years to come, call us at 214-469-9009 as soon as you find out that you are being investigated. It is your right.

Our Experience in the Pharmacy Industry

At Oberheiden, P.C., we have significant experience in cases involving allegations of pharmacy fraud. Specifically, Dr. Oberheiden and his team have advised pharmacies, pharmacists, pharmacy CEOs and CFOs, and affiliated physicians involved in the compound pharmacy industry in New Mexico in cases involving:

  • Pharmacy Kickback Defense
  • Pharmacy Health Care Fraud Defense
  • Pharmacy DEA Audit Assistance
  • Pharmacy DEA Show Cause Preparation
  • Pharmacy Diversion Conflict
  • Pharmacy DEA Licensing Issues
  • Purchases of State and DEA Licensing

With our vast experience, we are able to combine intimate knowledge of pharmacy law with a thorough understanding of federal court procedures and the arguments that federal prosecutors use to try to bring down compound pharmacies. All together, our attorneys have analyzed, reviewed, and defended hundreds of thousands of billed pharmacy claims.

How to Get in Touch with Us about Your New Mexico Compound Pharmacy Case

If you have been accused of compound pharmacy fraud, you need lawyers who understand the laws as they apply to the pharmacy industry and who have the necessary court and government experience to get your case dismissed. This is what you get with Oberheiden, P.C.. From the moment you call us, you will only talk to lawyers about your case – not secretaries and paralegals. Call (888) 727-5159 now and you will be immediately connected to Dr. Nick Oberheiden or one of our highly experienced attorneys to discuss your case.

Our Track Record (Fraud Defense)

  • Defense of Medicare entity against investigations by the Department of Justice and the U.S. Attorney’s Office for alleged Medicare Fraud.
    Result: No civil or criminal liability, case dismissed.
  • Defense of a health care services company against an investigation by the Office of Inspector General, the Department of Justice, and the Department of Health and Human Services for alleged False Claims Act and Stark Law violations.
    Result: No civil or criminal liability, case dismissed.
  • Defense of Medicare laboratory against investigations by the Department of Health and Human Services and the Office of Inspector General for alleged Health Care Fraud.
    Result: No civil or criminal liability, case dismissed.
  • Defense of nationally operating health care company against an investigation by the Department of Defense for alleged Tricare fraud.
    Result: No civil or criminal liability, case dismissed.
  • Defense of health care marketing company against an investigation by the Office of Inspector General for alleged False Claims Act and Medicare violations.
    Result: No civil or criminal liability, case dismissed.
  • Defense of a laboratory against an investigation by various branches of the federal government for alleged fraud.
    Result: No civil or criminal liability, case dismissed.
  • Defense of physician owned entity against an investigation by the Department of Health and Human Services for alleged Stark Law violations.
    Result: No civil or criminal liability, case dismissed.
  • Defense of a physician owned entity against an investigation by the Office of Inspector General for alleged fraud.
    Result: No civil or criminal liability, case dismissed.
  • Defense of a physician owned entity against an investigation by the Department of Justice for alleged fraud.
    Result: No civil or criminal liability, case dismissed.
  • Defense of a physician owned entity against an investigation by the Office of Inspector General for alleged Stark Law violations.
    Result: No civil or criminal liability, case dismissed.
  • Defense of a physician owned entity against an investigation by the Office of Inspector General for alleged False Claims Act violations.
    Result: No civil or criminal liability, case dismissed.
  • Defense of a physician owned entity against an investigation by various branches of the federal government for alleged False Claims Act, Stark Law, and Medicare violations.
    Result: No civil or criminal liability, case dismissed.
  • Defense of a physician owned entity against an investigation by the Office of Inspector General for alleged fraud.
    Result: No civil or criminal liability, case dismissed.
  • Defense of a physician owned entity against an investigation by the Department of Defense for alleged Tricare fraud.
    Result: No civil or criminal liability, case dismissed.
  • Defense of a physician owned entity against an investigation by the Department of Justice for alleged Medicare Fraud.
    Result: No civil or criminal liability, case dismissed.
  • Defense of physician owned entity against an investigation by the Department of Health and Human Services for alleged Stark Law violations.
    Result: No civil or criminal liability, case dismissed.
  • Defense of health care management organization against an investigation by the Office of Inspector General, the Department of Justice, and the Department of Health and Human Services for alleged Medicare Fraud.
    Result: No civil or criminal liability, case dismissed.
  • Defense of nationally operating laboratory against an investigation by the Office of Inspector General for alleged fraud.
    Result: No civil or criminal liability, case dismissed.

Who Will Handle Your Case

When you hire us, you will not work with paralegals or junior lawyers. Each lawyer in our Health Care Practice Group has handled at least one hundred (100) matters in the health care industry. So, when you call, you can expect a lawyer that immediately connects with your concerns and who brings in a wealth of experience and competence.

Bill C. McMurrey

Bill C.
McMURREY

Dr. Nick Oberheiden

Dr. Nick
OBERHEIDEN

Lynette S. Byrd

Lynette S.
BYRD

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