Mississippi woman pleads guilty in massive $200 million pharmacy fraud

JACKSON, Miss. — A Mississippi woman charged in a fraud case that prosecutors say reaped more than $200 million from a federal military health insurer and others pleaded guilty Wednesday.

Hope Thomley of Hattiesburg entered guilty pleas in federal court in that city to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering and tax evasion.

Prosecutors say the 52-year-old Thomley and her husband, Randy Thomley, bribed health care providers to prescribe handcrafted high-dollar medications that were generally unnecessary. They targeted people insured by TRICARE, which covers military members, their families, retirees and some National Guard members and reservists. Prosecutors have said Advantage Pharmacy, partly owned by Hope Thomley, took in $192 million in revenue from TRICARE alone over several years.

Prosecutors are dropping an earlier 26-count indictment that carried a potential 245-year sentence for both Hope and Randy Thomley. U.S. Attorney Mike Hurst said the husband is scheduled to plead guilty next Tuesday in Hattiesburg to one count of conspiracy to commit health care fraud, a charge that carries up to 10 years in prison.

Hope Thomley faces up to 15 years in prison at sentencing on July 2. She agreed Wednesday to forfeit $29 million under her plea, including $15 million in cash, three vehicles and 15 pieces of real estate. Authorities also said she is also required to pay $6.6 million to the IRS for income taxes she evaded, and could face other fines.

“The egregious corruption uncovered in this complex and expansive fraud scheme wasted and diverted millions of dollars in limited taxpayer funds that should have been spent on critical medical care for our military members and their families,” Special Agent in Charge John F. Khin of the Defense Criminal Investigative Service said in a statement.

Parts of the investigation have been visible since agents raided nine Mississippi pharmacies in January 2016, and Thomley is the 11th person convicted. In earlier court papers seeking to seize the assets of various defendants, federal officials identified her as one of the “central architects” of the scheme that ran from 2012 to 2015, saying it “threatened the very solvency of some health care benefit programs.”

They said pharmacists would concoct recipes for pain or scar creams that they would make by hand. Such compounded medications are typically tailored to the needs of an individual patient. But in this case, pharmacists tailored them for maximum reimbursement, using expensive ingredients “without regard to the individual needs of the patients,” prosecutors said. Sometimes pharmacies would submit multiple claims to determine which recipe would bring the most money, prosecutors have said.

Then Thomley’s marketing company would get health care providers to prescribe the creams. The marketers would sometimes pay prescribers kickbacks that are illegal under federal law, and the prescribers would sometimes write orders for the patients without examining them, according to prosecutors. At other times, Thomley admitted Wednesday, she obtained prescribers’ signatures on blank forms and filled them out herself. Participants in the scheme would often improperly waive co-pays of patients, who otherwise might refuse to pay for ineffective medication they didn’t want, and prosecutors have said pharmacies would even refill prescriptions against doctors’ orders.

Thomley also acknowledged Wednesday that she tried to hide the proceeds from the IRS by under-reporting her income and shuffling money through bank accounts of other companies they controlled.

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