Texas Pharmaceutical Marketer Sentenced for $59 Million Medications Fraud Conspiracy

Texas Pharmaceutical Marketer Sentenced for $59 Million Medications Fraud Conspiracy

On July 12, Quintan Cockerell, a Texas pharmaceutical marketer, was sentenced to over two years in prison and ordered to pay more than $59 million for receiving illegal kickbacks in exchange for prescription referrals for compounded medications intended to be made specific for individual patient needs.

According to court documents, Cockerell worked with co-conspirators to defraud the United States by creating and marketing expensive compounded medications that were not medically necessary. Court documents and evidence presented at trial demonstrated that Cockerell used preloaded prescription pads and “standing orders” for doctors to easily select expensive compounded medications. The pharmacy could then switch ingredients in the medications actually prescribed by doctors to maximum insurance reimbursements. According to the government, Cockerell recruited doctors to invest in the compounded medications so they could profit from the pharmacy operations. Trial evidence also demonstrated that the pharmacy paid Cockerell’s wife as a sham employee to assist in covering up the illegal kickbacks Cockerell received.

A federal jury in the Northern District of Texas convicted Cockerell in October 2023 of one count each of conspiracy to defraud the government, receiving kickbacks, and money laundering.

The US Department of Justice’s (DOJ) press release can be found here.

Hospice Companies Agree to Pay Almost $20 Million to Resolve False Claims Act Allegations

On July 17, Gentiva, a successor to the hospice services company Kindred at Home, agreed to pay $19.4 million to settle allegations that Kindred at Home and related entities (collectively, Kindred) retained overpayments for hospice services provided to patients who were known to be ineligible for hospice benefits under Medicare and Medicaid. The settlement also resolves allegations that another Kindred entity improperly concealed or avoided obligations to repay the hospice claims.

In a complaint filed by the federal government and the state of Tennessee in 2021 against Kindred, the government alleged that Kindred knowingly submitted false claims for hospice services provided to hospice patients in Tennessee who were not terminally ill and were ineligible for Medicare or Medicaid hospice benefits. The settlement further resolves allegations that certain Kindred hospice locations knowingly and fraudulently avoided repaying the overpaid hospice claims.

The DOJ’s press release can be found here.

Satellite GPS Manufacturer Agrees to Pay $2.6 Million to Settle False Claims Act Allegations

On July 17, Hemisphere GNSS (USA) Inc., a satellite GPS system manufacturer, agreed to pay $2.6 million to settle allegations of False Claims Act (FCA) violations. As alleged, Hemisphere violated the FCA by knowingly supplying fraudulent information in its applications for federal Payment Protection Program (PPP) loans.

According to the government, Hemisphere applied for a second-round PPP loan in February 2021. The government alleges that, in submitting its application for the second-round PPP loan, Hemisphere represented, among other things, that no “entity created in or organized under the laws of the People’s Republic of China” owned or held more than 20% of an economic interest in the company, and that Hemisphere did not have any board members that are residents of the People’s Republic of China. According to the government, both of these certifications were false at the time of Hemisphere’s application. If these certifications were false, Hemisphere would not have been eligible for the second-round PPP loan that it received and later sought forgiveness for.

The settlement includes resolution of qui tam claims brought by GNGH2 Inc. in the case captioned United States ex rel. GNGH2, Inc. v. Hemisphere GNSS (USA) Incorporated, 2:22-cv-00224 (D. Arizona).

The DOJ’s press release can be found here.