Ex-Servicemembers Perpetrate Multi-Million Dollar Drug Compounding Fraud Against Military Health Care System
It’s a huge responsibility, and the last thing it needs is a $65 million dollar straw to break its back.
Yet that’s how much a conspiracy involving former servicemembers defrauded Tricare in a drug-compounding scheme. Tricare is the healthcare provider for active duty servicemembers, their families, and military retirees.
After years of investigations by the Navy, DoD, the IRS, and the FBI, two more fraudsters associated with the extensive crimes have been sentenced.
Marine and Sailor Sentenced for Recruiting Others
A pair of former servicemembers were key in a conspiracy that involved fake prescriptions prescribed by medical personnel.
Morgan and Kyle faced ten years apiece for their roles in the fraud. For such a massive crime, one might expect the former Sailor and Marine to get the maximum sentence, but each will serve not quite two years.
Ex-Marine Joshua Morgan received 21 months in prison, and U.S. Navy Sailor Kyle Adams got 15 months, according to an April 12 press release from the U.S. Attorney’s Office for the Southern District of California.
Both will also have to pay back the money they stole from Tricare, according to the ruling.
Former Servicemembers Recruited Current Servicemembers
Morgan and Adams recruited active-duty military members to receive fake prescriptions for expensive compounded drugs. Many of these recruits were active duty Marines stationed in Southern California and were paid $300 by Morgan and Adams to ostensibly receive the medications, which were never compounded or sent.
Compounded drugs are specially formulated to a patient’s specific and unique needs, according to a description by the FDA.
That makes compounded drugs expensive, sometimes costing more than $10,000 for a month’s supply.
Co-Conspirators
Prosecutors say a married couple from Tennessee ran the conspiracy ring. Jimmy and Ashley Collins eventually pleaded guilty to the charges related to the conspiracy in July 2023, according to a Justice Department statement.
In January, Jimmy Collins received a ten-year sentence. The court sentenced Ashley Collins to 18 months of home confinement, according to the U.S. Attorney’s Office.
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