Mississippi pain cream scheme: Pharmacist pleads guilty in $182.5M fraud. He made $13.3 M. – Clarion Ledger

David “Jason” Rutland, one of three men accused in a more than $180 million fraud, pleaded guilty Tuesday morning in federal court to conspiracy to solicit and pay kickbacks and bribes.
Rutland, 41, of Bolton, a licensed pharmacist, was charged in June 2020 for 14 charges in a 15-count indictment issued in May 2020 with alleged co-conspirators Mitchell “Chad” Barrett, 55, of Gulf Breeze, Florida, and Thomas “Tommy” Shoemaker, 57, of Rayville, Louisiana.
The government contends in court documents the three men were involved in a scheme “to solicit and pay kickbacks and bribes to marketers, physicians, other medical providers and beneficiaries to refer, prescribe, and receive prescriptions for medically unnecessary compound medications.”
The men also were charged with conspiracy to commit health care fraud totaling more than $182.5 million between September 2011 and January 2016, of which Rutland admitted he received approximately $13.3 million.
More than $50 million of the fraud involved TRICARE and other government-funded health care benefits providers.
The conspiracy is part of the state’s largest health care fraud to date.
More than $515 million in fraudulent prescription billings were made to TRICARE, Medicare, Medicaid and private health care benefit providers in Mississippi. 
Nationwide, more than $1.5 billion was reported in the fraud, which entailed marketing compounded medications to health care providers, especially those treating patients with military health care coverage. 
Rather than formulating the compounded medications based on an individual’s needs the medications were prescribed to maximize profit. Some of the medications cost over $10,000 and up to $15,000 apiece.
In Rutland’s case, some of the medications were formulated for ear drops. Other medications generated in the fraud included pain and scar creams and vitamin pills.
Rutland appeared before U.S. Senior Judge Keith Starrett at William M. Colmer Federal Courthouse in Hattiesburg. His voice was barely audible as he answered the judge’s questions before admitting guilt.
MS pain cream scheme:He signed checks on many seized accounts. Here’s what happened.
Rutland’s sentencing hearing is set for Nov. 30. He will remain free on a $100,000 unsecured bond. 
Rutland faces up to five years in prison and a $250,000 fine.
How did it start?:Roots of Mississippi pain cream scheme began long ago. Walters, Thomley names pop up
The fraud was conducted through several pharmacies in Mississippi, including World Health Industries Inc., of which Rutland was an owner. He and others formed and contracted with Affordable Medical Solutions to make it appear the patients, many of whom did not see the prescribing doctor, had paid their insurance’s co-payment, Assistant U.S. Attorney Kathlyn Van Buskirk said during Rutland’s hearing.
Pain cream kingpin:Wade Walters sentenced to 18 years, must repay millions in massive fraud
Federal investigators began looking into the scheme some time in 2014-15 and in January 2016 conducted an orchestrated statewide search of pharmacies and related businesses the agents believed were connected with the fraud, many of which have since been shut down.
Since that time, more than two dozen people in Mississippi were charged and at least 20 of them either pleaded guilty or were convicted at trial in connection with the fraud and were sentenced to prison or probation.
Shoemaker is set to plead guilty on Aug. 12. Barrett, one of four people accused in earlier court documents of being the masterminds behind the fraud, is set to stand trial Sept. 20. The other three, Wade Walters, Hope Thomley and Tommy Spell pleaded guilty and are serving their sentences in federal prisons.
Contact Lici Beveridge at [email protected]. Follow her on Twitter @licibev or Facebook at facebook.com/licibeveridge.


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