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Prosecutors charge top figure in $400M-plus pharmacy fraud

Federal prosecutors on Wednesday filed criminal charges against a Mississippi pharmacist who they said in 2016 was one of the "central architects" in a $400 million health care fraud designed to bilk insurers for unneeded but pricey medications.

Posted: Aug 9, 2018 9:06 AM

JACKSON, Miss. (AP) — Federal prosecutors on Wednesday filed criminal charges against a Mississippi pharmacist who they said in 2016 was one of the "central architects" in a $400 million health care fraud designed to bilk insurers for unneeded but pricey medications.

Thomas E. Spell Jr. of Ridgeland was charged Wednesday with one count of attempt and conspiracy to commit health care fraud and is scheduled to appear in court Thursday in Hattiesburg. Spell faces a charge filed by prosecutors, not an indictment, often a sign a defendant intends to plead guilty. Lawyers for Spell didn't immediately respond to phone calls and emails seeking comment.

Spell faces up to 10 years in prison. Prosecutors also want him to forfeit more than $26 million in cash, financial assets, vehicles and property.

So far, seven others have been convicted in relation to the scheme and three more are under indictment. Of the top conspirators identified in a 2016 asset seizure case , Hope Thomley is under indictment and faces a November trial. Two others — Wade Walters and Chad Barrett — do not yet face criminal charges, although prosecutors have objected to attempts by Walters to unfreeze assets in the separate civil case, saying a criminal investigation continues.

Prosecutors say pharmacies figured out how to hand-make medications with a list of ingredients for which insurers would pay big money, making each prescription very profitable. At the same time, prosecutors allege the pharmacists hired marketers to seek and sometimes pay off physicians, nurse practitioners, dentists and others who could prescribe the drugs, which were typically topical creams. Often, the marketers provided pre-printed prescription pads and prescribers would send in orders for patients they had never examined, prosecutors say. The marketers or pharmacies would also improperly waive or pay copayments for patients who otherwise might have refused the drugs.

Walters had been a marketer for another pharmacy. Prosecutors have said he became a co-owner of Ridgeland pharmacy Medworx with Spell in 2014 after a falling out with other business partners. Prosecutors say compounded prescriptions paid for by Tricare, a federal military health insurer, skyrocketed at Medworx from $6,000 worth in the first three months of 2014 to $64 million in the first three months of 2015. Overall, between December 2014 and January 2016, prosecutors say Medworx and three other pharmacies associated with Spell took in $243.6 million from Tricare.

Prosecutors in the separate civil case say Spell — who previously earned less than $200,000 a year — reaped a huge windfall.

"After managing Medworx for only 18 months, he was able to amass assets estimated to be worth more than $12 million," prosecutors wrote in the case. "During the course of the fraud and as a direct result of his role in it, he was able to purchase, among other things, a boat, a luxury car, and several pieces of real property, as well as invest in real estate development projects."

Mississippi Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 95310

Reported Deaths: 2874
CountyConfirmedDeaths
Hinds7063159
DeSoto552159
Harrison382973
Jackson345670
Madison326586
Rankin325677
Lee268368
Jones246879
Forrest245571
Washington221972
Lafayette215439
Lauderdale2044125
Bolivar182366
Oktibbeha177350
Lamar167534
Neshoba1559104
Lowndes152658
Panola146328
Sunflower144546
Warren140250
Leflore139581
Pontotoc125916
Pike123050
Monroe122168
Scott117327
Copiah117133
Coahoma115028
Holmes109558
Marshall109217
Lincoln108353
Grenada107736
Yazoo105530
Simpson102544
Union99324
Tate97637
Leake95338
Adams93037
Wayne89421
Pearl River87353
Marion85735
Prentiss84417
Covington81922
Itawamba79421
Alcorn79111
Newton76723
George76513
Tallahatchie76321
Winston73719
Tishomingo67238
Chickasaw67024
Tippah66517
Attala65425
Walthall59825
Clay58918
Clarke58145
Hancock57721
Jasper56815
Noxubee54816
Smith53114
Calhoun51312
Tunica48313
Claiborne46216
Montgomery45920
Lawrence43112
Yalobusha42814
Perry41918
Humphreys37615
Quitman3725
Stone37012
Greene36617
Jefferson Davis33911
Webster33613
Amite32510
Carroll31512
Wilkinson30318
Kemper28815
Sharkey26513
Jefferson2449
Benton2252
Franklin1923
Choctaw1816
Issaquena1043
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Alabama Coronavirus Cases

Confirmed Cases: 133433

Reported Deaths: 2349
CountyConfirmedDeaths
Jefferson19441349
Mobile13271291
Montgomery8778179
Madison775480
Tuscaloosa7496119
Shelby584951
Lee582961
Baldwin516550
Marshall390944
Calhoun346641
Etowah342047
Morgan325428
Houston278123
Elmore263247
DeKalb239120
Walker228483
St. Clair227837
Talladega212728
Limestone206120
Cullman188519
Dallas177426
Franklin175529
Russell17442
Autauga173825
Lauderdale168233
Colbert163626
Blount159415
Escambia158425
Jackson154611
Chilton153531
Dale135444
Covington134427
Coffee13078
Pike11879
Chambers115142
Tallapoosa114685
Clarke107717
Marion95729
Butler91339
Barbour8577
Winston73712
Marengo70820
Lowndes65327
Pickens65114
Bibb64210
Randolph63713
Hale62828
Lawrence60922
Geneva5995
Bullock59814
Cherokee59115
Monroe5818
Clay5707
Washington55613
Perry5407
Conecuh53111
Crenshaw53132
Wilcox53111
Henry4865
Macon48020
Fayette4438
Sumter43419
Lamar3632
Choctaw34612
Cleburne3396
Greene30315
Coosa1673
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