A former chief compliance officer of a now-defunct pharmacy holding company was convicted June 8 by a federal jury for conspiracy to commit health care fraud and wire fraud, the Department of Justice announced.
According to court documents, Steven King “fraudulently billed Medicare over $50 million for dispensing lidocaine and diabetic testing supplies that Medicare beneficiaries did not need or want.” King and his co-conspirators operated A1C Holdings, which held pharmacies in various states.
A1C violated Medicare and pharmacy benefit manager rules when it “secured prescriptions and refills on behalf of its pharmacies for medically unnecessary lidocaine and diabetic testing supplies,” the DoJ said.
According to the DoJ, King and his co-conspirators took several steps to conceal their scheme, including by:
- Enrolling their mail-order pharmacies as brick-and-mortar retail locations to evade oversight;
- Shipping prescription refills for high-reimbursing medications and supplies without patient consent;
- Concealing the ownership of A1C Holdings and its pharmacies; and
- Transferring patients among pharmacies without patient consent.
“King and his co-conspirators took each of these steps to ensure that Medicare continued to be billed for profitable medications and supplies. As chief compliance officer, King was in a unique position to prevent and report the fraudulent scheme, but he used his position to defraud Medicare instead,” the DoJ said.
The jury convicted King of conspiracy to commit health care fraud and wire fraud, which carries a maximum penalty of 20 years in prison. His sentencing is scheduled for Sept. 14. 
Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.