Gambling with Fraud

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36414458 - rear view of a pharmacist working in lab coats in the pharmacy

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When people choose to commit fraud they assume significant risk. The Lincoln Journal Star tells the story of a Lincoln, Neb., pharmacist who lost a record-setting gamble while failing to manage his risk. The pharmacist, who pleaded guilty to one count of Medicaid fraud in a plea deal on Sep. 29, 2015, spent the majority of his $14,430,059 haul at two casinos in Council Bluffs, Iowa. (This fraudster did not know when to hold ’em and when to fold ’em.)

The story explains that an FBI special agent filed a criminal complaint alleging the pharmacist committed 18 counts of health care fraud between May 2009 and February 2015. The complaint stemmed from the pharmacist requesting $2,476,402 in Medicaid reimbursements for 399 inhaler prescriptions that he never filled. The story notes that each of these prescriptions were for the same specific inhaler, and that each prescription originated from one of six doctors in the Lincoln metropolitan area. (Although the pharmacist’s scheme was temporarily effective, no one is characterizing it as creative.)

After further examination, the story explains that federal investigators discovered more fraudulent prescriptions, and likewise, millions of dollars in documented bets at two casinos in Council Bluffs. Sometimes the pharmacist wagered as much as $20,000 per hand at blackjack tables. (One in a series of bad bets this guy placed.)

As a result of his plea bargain, the pharmacist will serve 8-10 years in a federal prison, and he must repay the remaining balance of his $14.4 million haul on top of the amount the government will recoup from his bank accounts, and from the sale of his home in Omaha, NE, his Lincoln, NE pharmacy, his stocks and his life insurance policy.

The Justice system and Nebraska’s Medicaid program are thankfully getting their rightful restitution. Hopefully, this case can help serve as a lesson to would-be fraudsters who might now think twice before gambling with taxpayer dollars.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Lincoln pharmacist pleads guilty to possibly state’s biggest Medicaid fraud,” written by Lori Pilger and published by the Lincoln JournalStar.com on September 30, 2015.

A Lincoln pharmacist tearfully pleaded guilty Tuesday to health care fraud, admitting he bilked Nebraska’s Medicaid program of $14.4 million in what is believed to be the largest such fraud on record in the state.

Federal prosecutors say Scott Tran, owner of Tran Pharmacy at 2655 S. 70th St., submitted hundreds of claims for TOBI, a tobramycin solution used in inhalers for cystic fibrosis patients, in the names of his customers’ children.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.