Pharmacy Owner Convicted for Leading $174M Telemedicine Fraud Scheme

A pharmacy owner has been convicted for participating in a $174 million telemedicine fraud, waste, and abuse scheme that deceived pharmacy benefit managers, payers, and consumers.

Peter Bolos, age 44, of Tampa, Florida, was convicted December 2 by a federal jury in Tennessee of 22 counts of mail fraud, conspiracy to commit healthcare fraud, and introduction of a misbranded drug into interstate commerce.

Bolos, several co-conspirators, and a number of pharmacies swindled pharmacy benefit managers into processing and approving fraudulent claims for prescription drugs that totaled over $174 million. Private and public payers including Blue Cross Blue Shield of Tennessee, Medicaid, and TRICARE then reimbursed the claims to pharmacies that the co-conspirators operated.

Bolos, Andrew Assad, and Michael Palso owned Synergy Pharmacy in Palm Harbor, Florida. The company partnered with Scott Roix, who ran the telemarketing platform HealthRight, to generate prescriptions for Synergy and other involved pharmacies, including Sterling Knight Pharmaceuticals.

Roix used HealthRight as a telemedicine service and deceitfully convinced consumers to accept the prescriptions and provide their insurance information, according to evidence presented during the trial. HealthRight then paid doctors to authorize the prescriptions through the telemedicine platform, with the doctors relying on the telemarketer’s faulty screening process as means for approval.

The fraudulent screening process rendered the prescriptions invalid, which led them to be misbranded under the Food, Drug, and Cosmetic Act. But the pharmacies still distributed the prescriptions to the consumers and submitted reimbursement claims to the numerous health insurers as part of the fraud, waste, and abuse scheme.

The prescriptions were mainly for pain creams, scar creams, and vitamins.

Bolos paid Roix more than $30 million over a nearly three-year period to buy 60,000 false prescriptions that the telemedicine platform produced. Bolos chose specific medications that would generate the highest reimbursement amounts from payers, evidence showed. He was responsible for at least $89 million out of the $174 million in fraudulent billings. Bolos also hid his activity from the pharmacy benefit managers using illegal means, the news release noted.

“The defendants deceived consumers in order to facilitate the distribution of drugs without proper medical oversight, and overbilled insurers for illegal prescriptions,” Arun G. Rao, deputy assistant attorney of the Justice Department’s Civil Division, stated in the news release. “The Department will continue to investigate and prosecute individuals who use telemedicine to advance fraudulent schemes that violate the Food, Drug, and Cosmetic Act.”

Roix, Assad, Palso, and co-conspirators Larry Smith and Maikel Bolos pleaded guilty to their involvement in the healthcare fraud, waste, and abuse conspiracy. Other co-conspirators Mihir Taneja, Arun Kapoor, and Sterling Knight Pharmaceuticals pleaded guilty to felony misbranding in a conspiracy with Bolos.

“Healthcare fraud is an egregious crime problem that impacts every American,” Joseph E. Carrico, special agent in charge of the FBI’s Knoxville Field Office, said in the news release. “The guilty verdict was a result of a multi-agency investigation into a complex healthcare fraud scheme that required substantial investigative resources. Along with its law enforcement partners, the FBI remains committed to investigate these crimes and prosecute all those that are intent in defrauding the American public.”

The HHS Office of Inspector General, the Food and Drug Administrations Office of Criminal Investigations, and the Department of Homeland Security were among the agencies that assisted with the investigation.

Bolos is set to receive his sentence on May 19, 2022, in the United States District Court for the Eastern District of Tennessee at Greeneville.