Health Law Alert by Lamb McErlane attorneys Vasilios J. Kalogredis, Esq. and Sonal Parekh, Esq.

On May 31, 2024, Richard Hall, co-owner of a Texas pharmacy, was sentenced to four years and four months of incarceration and ordered to pay over $59 million in restitution for defrauding the government in an illegal kickback and money laundering scheme.

Court documents and evidence presented at trial revealed that Hall worked with others to create and market expensive compounded medications which are intended to be custom-tailored to individual patient needs. Hall paid marketers to find and recruit doctors to write prescriptions to his pharmacy for such medications. Hall further created “investment opportunities” for said doctors so they could financially profit from the pharmacy’s operations. A federal jury in the Northern District of Texas found that Hall paid illegal kickbacks to the marketers and engaged in a conspiracy to launder the unlawful proceeds. Hall was convicted of four counts of paying and receiving illegal kickbacks and one count of conspiring to launder money. Hall and each of his co-conspirators were each charged in connection with the case in 2020.

According to the indictment, from May 2014 to September 2016, Hall and his co-conspirators allegedly engaged in a scheme to pay kickbacks and bribes for the referral of TRICARE and U.S. Department of Labor beneficiaries to obtain compound drugs. A superseding indictment alleged that Rxpress Pharmacy and Xpress Compounding (both owned by Hall and/or his co-conspirators) utilized the same marketers but paid them according to whether they were receiving a commission on a federal or private prescription in order to disguise the illegal kickback payments relating to federal prescriptions. Hall and his co-conspirators spent the proceeds of the scheme on luxury vehicles, chartered vessels, and other personal property. Three of the co-conspirator marketers were convicted  of conspiracy to defraud the United States and pay and receive kickbacks in 2023.

If you have any questions or if we may be of further assistance regarding fraud and compliance, policy, or other health law matters, please feel free to contact Bill Kalogredis, Esq. or Sonal Parekh, Esq.

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Vasilios J. (Bill) Kalogredis, Esq. has been advising physicians, dentists, and other healthcare professionals and their businesses as to contractual, regulatory and transactional matters for 50 years. He is Chairman of Lamb McErlane PC’s Health Law Department. Bill can be reached by email at bkalogredis@lambmcerlane.com or by phone at 610-701-4402.

Sonal Parekh, Esq., is an associate at Lamb McErlane PC who focuses on healthcare transactional matters and a broad range of healthcare regulatory-related issues on behalf of healthcare systems, physicians, dentists, and other healthcare providers, and is a pharmacist by education and training. Sonal can be reached by email at sparekh@lambmcerlane.com or by phone at 610-701-4416.

*This alert is for educational purposes only and is not intended to be legal advice. Should you require legal advice on this topic, any health care matter, or have any questions or concerns, please contact Vasilios J. (Bill) Kalogredis, Esq. or Sonal Parekh, Esq.