Texas Pharmaceutical Marketer Sentenced to Two Years, Five Months in $59 Million Compound Scheme Fraud

But some doctors did, thanks to Quintan Cockerell, who conspired to defraud insurers for compound medications that patients didn’t need, say prosecutors.

Quintan Cockerell, 43, a Texas pharmaceutical marketer from Palos Verdes Estates, California, was sentenced on July 12th to two years and five months in prison and ordered to pay $59 million or more in restitution, according to a Department of Justice (DOJ) press release.

The sentencing comes nearly nine months after Cockerell’s criminal conviction for his part in a $55 million conspiracy to commit fraud using TRICARE, a federal healthcare program for retired and active duty service members and their families, as well as other federal healthcare programs, per the press release.

Compound pharmacies paid Cockerell kickbacks to recruit doctors to prescribe expensive compound medications to patients who didn’t need them to scam reimbursements from the federal healthcare programs, according to the initial DOJ press release on Oct. 26, 2023.

These bespoke medications are usually created in compounding pharmacies, which are a little different than regular pharmacies in that they specialize in custom-made or made-to-order medicines for patients needing a unique mix of medications, according to an article by WebMD.

A licensed physician usually prescribes compound medicines, which can only be created by a licensed pharmacist in a state-licensed pharmacy or federal facility, as stated on the FDA’s A&Q sheet about compounding. Although the individual medication used in customized medications is FDA-approved, the finished product, or the personalized medicines created by the compounding pharmacy, is not FDA-approved, according to the FDA’s Human Drug Compounding Progress Report in 2017.

Between 1% and 3% of all prescriptions in the U.S. are custom or compounded drugs created for people with particular allergens or specific dosage needs of a certain medication, according to WebMD. This opens the floodgates for fraudsters looking to exploit the system.

In Cockerell’s case, “pharmacy owners and others paid illegal kickbacks to individuals like Cockerell, who recruited area doctors to write prescriptions for these expensive compounded medications,” The Inspector General wrote in October 2023.

Cockerell also created “investment opportunities so that doctors who wrote prescriptions to the pharmacy could profit from the pharmacy operations… then spent the proceeds of the scheme on expensive vacations, trips on private jets, and a yacht charter,” the DOJ wrote in its initial 2023 report.

Cockerell was convicted of one count of conspiracy to defraud the United States, one count of money laundering, and one count of receiving unlawful kickbacks. He could have received a maximum sentence of 20 years for his crimes, as detailed in his indictment. A federal court sentenced Cockerell to two years and five months in prison, according to sentencing documents.

This is especially true since this type of crime isn’t an anomaly. The following are just a few similar cases:

• A federal court found two former servicemembers guilty for their roles in a compound drug scheme that also targeted TRICARE, as previously covered by The Daily Muck.
• Navid Vahedi, 44, the owner of a compounding pharmacy, was sentenced to two and a half years for obtaining $14 million in reimbursements by using a “check-the-box” system where doctors could quickly check a box to maximize insurance reimbursement, the U.S. Attorney’s office in California reported in Feb 2022.
• Eight men pleaded guilty to conspiracy to commit healthcare fraud in 2018, when they set up pharmacies and bribed healthcare providers to “write unnecessary prescriptions for compounded drugs like pain or scar creams, then billed the patients’ insurance companies large sums for the drugs,” the FBI reported.
• Christopher Parks, 63, was sentenced to serve 18 months in federal prison with a two-year supervised release period after that and paid $6,400,651.57 in restitution. He provided physicians with lists of high-cost compound drugs to prescribe to their patients. Instead of tailoring the custom prescription to the individual, the doctors would pick from a list and get paid a commission from Parks, according to the U.S. Attorney’s Office in Northern Oklahoma.

Compounding pharmacy scams are not victimless crimes. They can be life-threatening to the patients involved, who are already experiencing health issues. If the maximum sentence for these crimes is 20 years, maybe Cockerell got off light with only two years and five months.