Federal prosecutors allege that a sprawling fraud scheme generated $51 million in insurance reimbursements for HIV medications. Two men are now facing federal charges.
JACKSONVILLE, Fla. — An offer for a free government cellphone allegedly served as the entry point to a far larger operation designed to generate millions of dollars.
Federal prosecutors said Charlie Bernard Griffin III, the owner of First Coast Community Development, worked with a marketing company to obtain people’s personal information and health insurance details. That information was then allegedly used to bill Medicare, Medicaid and private insurers for costly HIV-related medications.
According to prosecutors, the alleged scheme produced approximately $51 million in insurance reimbursements through tens of thousands of fraudulent claims.
Griffin and accountant Ethelbert Chinenye Nwanegbo are now charged in federal court.
How the alleged scheme worked
The indictment says Griffin owned First Coast Community Development, a Jacksonville pharmacy, and had an agreement with a marketing company operated by Jonathan Gholston.
Representatives of the marketing company visited Jacksonville neighborhoods, including lower-income communities, where they set up tables and tents to promote free government-sponsored cellphones.
Prosecutors allege the outreach involved far more than cellphone enrollment.
As marketers collected information from people seeking the phones, they also obtained health insurance details, including whether an individual had Medicare, Medicaid or private coverage.
The marketers then allegedly forwarded that information to Griffin’s pharmacy.
Prosecutors said the pharmacy used the data to create prescriptions for HIV medications even though the individuals had not been properly assessed by a medical professional.
Nurse practitioner Rashan Jones allegedly approved prescriptions without seeing, speaking with or examining the people identified as patients.
The indictment further alleges that false medical diagnoses were added to patient records to make the prescriptions appear medically necessary.
The pharmacy then filled the prescriptions and submitted claims to the patients’ insurance providers.
Millions of dollars in profit
Prosecutors said the operation generated tens of thousands of fraudulent claims and approximately $51 million in insurance reimbursements.
Griffin allegedly received about $14 million in proceeds.
According to federal prosecutors, the marketing company received $200 for each person it referred to the pharmacy when the resulting insurance claim was approved. Its representatives generally received $50 for every successful referral.
Prosecutors said making the payments contingent on insurers approving and paying the claims constituted illegal kickbacks.
U.S. Attorney Gregory Kehoe said the allegations were particularly troubling because of the people targeted and the possible health consequences.
“Let’s not forget those people from maybe low socio-economic areas that were taking advantage of that we’re giving a medication that could jeopardize their health in a very serious way,” Kehoe said.
Some people reportedly did not know why the medication was being sent to them and said it simply arrived at their homes.
There is no indication that any residents took the medication.
Who is facing charges?
Griffin faces a 31-count federal indictment alleging health care fraud and money laundering. If convicted, he could receive a maximum sentence of 20 years in prison for each count.
Prosecutors are seeking to recover millions of dollars they say were generated by the scheme, including more than $14.2 million in alleged fraud proceeds and another $17.8 million tied to the money laundering charges.
The government also wants to forfeit approximately $8.18 million seized from Griffin’s bank accounts, as well as three properties and four vehicles.
Nwanegbo, the accountant, is charged with money laundering. Prosecutors allege that he moved the proceeds through bank accounts under his control before sending the money back to Griffin and another person involved in the operation. He allegedly retained about 10% as a fee.
The government is seeking more than $6 million in forfeiture from Nwanegbo. He also faces a maximum sentence of 20 years in prison for each count if convicted.
Three other people linked to the operation have been charged separately and agreed to plead guilty:
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Jonathan Gholston: The marketing company owner who allegedly organized the patient referrals.
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Albert Chester: The pharmacist who allegedly filled the prescriptions.
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Rashan Jones: The nurse practitioner who allegedly approved prescriptions without evaluating the patients.
What happens next?
The FBI and the U.S. Department of Health and Human Services Office of Inspector General conducted the investigation.
The case will proceed through the federal court system as Griffin and Nwanegbo respond to the charges in the new indictment.
Prosecutors are also pursuing the forfeiture of money and property they believe are connected to the alleged fraud.
Griffin and Nwanegbo are presumed innocent unless they are proven guilty in court.