United States Attorney Joseph H. Hogsett announced Friday pharmacist and controlling member of the Terre Haute Prescription Shop (THPS), John D. Love, Brazil, was charged with one count of health care fraud and two counts of money laundering.
"As U.S. District Attorney, I've come to Terre Haute today to announce the largest case of health care fraud and money laundering discovered in this district to date," Hogsett said during a press conference. "I want to make it loud and clear, that when individuals, who through their own greed, take advantage of the health care system for their own greed, take benefits intended to serve the neediest of Indiana's citizens, it will not be tolerated. Suspects will be investigated and prosecuted to the fullest extent of the law."
According to officials involved in the investigation, a tip to authorities prompted the investigation.
"An outside agency performing an audit with patients tipped officials off," Assistant U.S. Attorney Bradley P. Shepard, who will be prosecuting the case for the government, said. "Love is the sole person being charged in this matter. There is no evidence against any others."
The tip spawned a joint investigation involving Health and Human Services, Office of Inspector General (HHS), The Internal Revenue Service (IRS), the Federal Bureau of Investigation (FBI), and Indiana Attorney General Greg Zoeller's Medicaid Fraud Enforcement Unit (MFCU).
According to information provided during the press conference, officials allege Love submitted claims to the Indiana Medicaid Program (IMP) for prescriptions that were never given to patients from Jan. 1, 2006, through September 2010.
Using his access and knowledge of the THPS computer billing system, Love allegedly inputted false prescription claims to the IMP. But, as soon as the billing system submitted the prescription, Love would log in again to void the claim before any other employee of the THPS could notice a record for a prescription that would never be filled or dispensed.
As a result of Love's fraudulent acts, officials allege IMP paid the THPS $3,575,699.73 for prescription medications never provided to patients.
Officials allege these funds were deposited into the main business account of THPS. Love, in his authority as business owner, used at least $3 million of the fraudulent proceeds to purchase, in whole or in part, four parcels of real estate, 15 vehicles, a destination wedding for one of his children in Destin, Fla., and numerous other personal expenses.
"For a pharmacist to bill the taxpayers millions of dollars for prescription drugs that doctors never ordered and patients never received is a brazen abuse of the Medicaid system," Zoeller stated in a press release. "The Attorney General's Medicaid Fraud Control Unit collaborates closely with our federal colleagues to unravel such schemes so that those who try to game the system will be held accountable."
As part of the investigation, federal authorities have seized property Love allegedly purchased, including five Harley Davidson motorcycles, a Corvette and a Mustang, four sport utility vehicles, two pickup trucks, one four-wheeler RV and trailer, and funds from multiple bank accounts. The government will be seeking forfeiture of these and other assets.
The money laundering charges concern the purchase of one Harley Davidson motorcycle and the destination wedding.
Shepard, who is prosecuting the case for the government, added Love faces a maximum of 10 years in prison and a $250,000 fine if convicted of the allegations.
An initial hearing will be scheduled for an initial appearance and arraignment in Terre Haute before a U.S. Magistrate Judge William Lawrence.
Shepard confirmed a summons has been issued, notifying Love to surrender himself to authorities and appear in court at the appointed time.
When asked about the future of the THPS, officials confirmed that no other individuals were apparently involved with Love's actions and that the business license would be a matter for the state.
"As far as we know, the business partner is currently running the THPS now with no problems," Shepard said. "Love is the sole person being charged."