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Case Number: 1:07-cr-00430-JAB
Judge: Catherine C. Eagles
Court: United States District Court for the Middle District of North Carolina (Guilford County)
Plaintiff's Attorney: United States Attorney’s Office
Description: Greensboro, North Carolina False Claims Act violation lawyer represented the United States by asserting a Qui Tam claim against Defendant accused of submitting more than $1 million in false claims for payment to the TRICARE program between September 2014 and May 2015.
David and Lois Tsui of Chapel Hill, North Carolina formerly owned Wellcare Compounding, in Hillsborough, North Carolina.
They were the owners of a now-closed compounding pharmacy that received $1,082,991.94 over payments.
David Tsui was previously convicted of health care fraud, and in 2009 was excluded from participation in federal health care programs, including TRICARE. The United States contended that Wellcare intentionally concealed David Tsui’s involvement in and ownership of the pharmacy, including by falsely representing to TRICARE that Lois Tsui was the pharmacy owner. The United States also asserted that Wellcare made improper payments to physicians and “marketers” in exchange for prescriptions or referrals for prescriptions, in violation of the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b). In addition, Wellcare encouraged medically unnecessary prescriptions consisting of high-margin ingredients to maximize the pharmacy’s reimbursement. The United States contended that through these actions, the Tsuis and Wellcare knowingly caused false claims to be presented to the TRICARE program.
“This settlement sends a strong message that individuals who defraud federal health care programs cannot rely on the passage of time or the use of straw owners to conceal their wrongdoing,” said Acting United States Attorney Sandra Hairston. “We will continue to identify those who seek to seek to exploit federal programs for personal gain and will hold them accountable.”
“The results of this investigation highlight another step forward by the Defense Criminal Investigative Service (DCIS) and its law enforcement partners to root out fraud and corruption involving medical professionals who undermine the integrity of the Department of Defense,” said Special Agent in Charge Christopher Dillard, DCIS Mid-Atlantic Field Office. “DCIS will continue to target fraud, waste, and abuse to preserve and recover precious taxpayer dollars for our most vulnerable programs, such as TRICARE.”
This case was handled by the U.S. Attorney’s Office for the Middle District of North Carolina and the Defense Criminal Investigative Service. The United States was represented by Assistant United States Attorney Cassie Crawford.
The claims settled by this agreement are allegations only. The Settlement Agreement is not an admission of liability or wrongdoing by Wellcare or the Tsuis.
Outcome: Defendants agreed to pay $1.082 million to resolved the civil claims against them.