Six pharmacists were properly convicted of health-care fraud for their actions in Michigan and Ohio, the 6th Circuit Court ruled on June 12.
Raef Hamaed and Hassan Abdallah opened five pharmacies in the two states and recruited four friends to help operate them.
Pharmacies receive payments through the work of pharmacy benefit managers (PBMs), who serve as intermediaries with insurance companies.
The fraud took place when patients did not pick up their medicine. The pharmacists did not reverse the charge and instead pocketed the money.
At one of the five locations, the pharmacists billed the insurance companies for name-brand drugs while secretly dispensing their generic counterparts.
The defendants made millions of dollars and evaded detection by auditors until a federal government contractor named Qlarant uncovered the scheme.
“They all used identical strategies, including falsifying patients’ signatures and cultivating a designated area for fraudulently billed prescription labels. And they all targeted specific kinds of medications, such as inhalers and insulin,” Circuit Judge Mathis noted.
Qlarant discovered that the five pharmacies had bilked the Medicare and Medicaid system out of $13 million.
Hamaed, Abdallah, and their co-defendants were charged with conspiracy to commit healthcare and wire fraud. They were sentenced to between two and seven years in prison and ordered to pay between $607,000 and $12 million in restitution.
The defendants appealed, claiming violations of their constitutional rights and unreasonable sentences.
The 6th Circuit ruled that the testimony of Qlarant employee Johanna Sullivan did not violate the defendants’ rights to confront their accuser.
“As Defendants point out, any missteps in the data-collection process would have
undermined Sullivan’s conclusion,” Mathis wrote. “But their inability to cross-examine everyone involved in that process does not create a Confrontation Clause violation.
“Defendants stipulated to the admissibility of the data that Sullivan relied on, and they did not need to cross-examine the subject-matter experts to “weed out” any errors in Sullivan’s analysis,” he added.
Defendant Kindy Ghussin claimed that the sentence enhancement should have been reserved for “cunning and scheming defendants.”
Mathis stated that Ghussin belonged in that category.
“The evidence shows that Ghussin participated in a healthcare-fraud scheme that survived for almost a decade, spanned five pharmacies, and involved six defendants,” the judge wrote. “Part of the reason the scheme lasted so long was because of Ghussin’s sophisticated method to evade detection.”
