A shady Utah pharmaceutical company teamed up with a Tennessee clinic and California-based Marines to defraud Tricare by selling $14,500 single-use tubes of bogus scar & pain creams.
In a case that is as fantastical as it is complex, a multi-state conspiracy involving doctors, pharmacists, Marines and others, the alliance managed to scam the US military out of $65 million.
The plan was fairly elaborate- US Marines would be prescribed a drug made in Utah by a doctor’s office in Tennessee, all at the encouragement of the Marine veteran who recruited the active duty servicemembers to use the drug as a trial. The participating Marines would receive monetary cutbacks for their use.
The cream is a “compounded medication,” meaning it is a mixture of medications that does not meet FDA approval but is approved by Tricare.
According to USA Today, each tube of the product costs around $14,500, and does absolutely nothing.
The scam initially began in 2015, and was brought to light in part due to a private investigator by the name of Bill Schneid.
Curious about California Marines getting extra income, the savvy detective convinced an involved Marine to send the medicine to his own place of residence.
“After the second delivery, I realized this was some kind of fraud,” Schneid said in an interview. “I believed there were about a dozen Marines involved, and they were being actively recruited to be prescribed this cream. It was a conspiracy, and it was growing, but I just didn’t know how huge.”
In the end, around seven individuals -including two doctors and a nurse practitioner from an East Tennessee practice, a Marine veteran and others- were implicated, as well as the Utah company that makes the creams. Around a dozen Marines were reportedly duped into the fake “clinical trials.”
Several guilty pleas have been recorded, the Tennessee practice has since closed and the pharmaceutical company is under indictment.
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