TN Nurse Practitioner Pleads Guilty in $65 Million TRICARE FRAUD

U.S Attorneys Southern District of California -- Press Release 

Department of Justice
U.S. Attorney’s Office
Southern District of California

FOR IMMEDIATE RELEASE

Wednesday, November 28, 2018

TENNESSEE NURSE PRACTITIONER PLEADS GUILTY FOR ROLE IN $65 MILLION TRICARE FRAUD

NEWS RELEASE SUMMARY –

November 27, 2018

Candace Michelle Craven, a Tennessee-based nurse practitioner pleaded guilty in federal court today, admitting that she participated in a health care fraud scheme that bilked TRICARE – the health care program that covers United States service members – out of more than $65 million. As part of her guilty plea, Craven admitted to conducting sham “telemedicine” evaluations that resulted in the prescription of exorbitantly expensive compounded medications to patients that she never saw or examined in person.

Craven entered her guilty plea, to conspiracy to commit health care fraud, before U.S. District Judge Janis L. Sammartino, who will sentence Craven at a hearing scheduled for February 8, 2019.

Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient requires a particular dosage or application or is allergic to a dye or other ingredient.

According to the guilty plea, a team of individuals worked to recruit and pay Marines, primarily from the San Diego area, and their dependents – all TRICARE beneficiaries – to obtain compounded medications that would be paid for by TRICARE. This information was sent to Choice MD, the Tennessee medical clinic that employed Craven. Craven then conducted phone calls with the TRICARE beneficiaries, and recommended that they be prescribed compounded medications despite never examining the patients in person. These prescriptions were then signed by doctors employed by Choice MD, were not given to the beneficiaries, but sent directly to particular pharmacies controlled by co-conspirators, which filled the prescriptions and billed TRICARE at exorbitant prices.

Josh Morgan, a former Marine from San Diego, pleaded guilty in April to Conspiracy to Commit Health Care Fraud for his role in recruiting TRICARE beneficiaries to fraudulently receive these prescriptions. The doctors who signed the prescriptions, Carl Lindblad and Suzy Vergot, pleaded guilty to the same charges in September.

Between December 2014 and May 9, 2015 – the day that TRICARE stopped reimbursing for compounded medications – doctors working at Choice MD signed 4,442 total prescriptions. Over this time, their co-conspirators billed TRICARE $65,679,512 for these prescriptions.

Craven represents the seventh defendant charged in relation to this fraud scheme. In addition to Morgan, Lindblad, and Vergot, Jimmy and Ashley Collins, the owners of Choice MD, and CFK, Inc., the owner of a co-conspirator pharmacy, were indicted in March 2018 on charges of Conspiracy to Commit Health Care Fraud and Illegal Payments of Remunerations. That case remains pending.

This case is being prosecuted by Assistant United States Attorneys Benjamin J. Katz and Mark W. Pletcher.

DEFENDANTS Case Number 18-cr-4209-JLS

Michelle Candace Craven Age: 52

SUMMARY OF CHARGES

Conspiracy to Commit Health Care Fraud – Title 18, U.S.C § 1349

Maximum penalty: 10 years’ imprisonment and fine of higher of $250,000 or double loss amount

AGENCIES

Defense Criminal Investigative Service

Naval Criminal Investigative Service

IRS Criminal Investigation Division, Gulfport, MS

Federal Bureau of Investigation - Jackson, MS Field Office