'Hate to See It': Houston Power Couple Sentenced to a Combined 35 Years In Federal Workmans Comp Fraud Scheme

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• If you use PACER, please install RECAP
• Houston power couple sentenced to federal prison in $126 million fraud scheme
• Workers Compensation News Topics
• Driver in wrong-way DUI crash that killed 2 at Las …
• Prominent Houston Couple Sentenced to Combined 35 Years for $126M Fraud Scheme
• Attorneys for Plaintiffs

Healthcare fraud investigations involve complex healthcare and pharmacy matters requiring legal counsel with knowledge and experience in TRICARE and healthcare law. Those involved in the industry would be well advised to educate themselves about best practices. As far back as 2015, The Health Law Offices of Anthony C. Vitale, who specialize in healthcare law,  have been writing about the feds cracking down on compounding pharmacy fraud. Cruise filed a Motion to Substitute Counsel on November 10, 2022 (Docket Entry No. 560), which was granted on December 2, 2022 (Docket Entry No. 569). On February 2, 2023, a United States Probation Officer filed Cruise's initial Presentence Investigation Report ("PSR") (Docket Entry No. 587). On March 3, 2023, Cruise filed Defendant's Amended Objections to Presentence Investigation Report, which did not indicate any intention to withdraw his plea (Docket Entry No. 633).

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Prominent Houston couple John Cruise and his wife, LaShonia Johnson, were sentenced to a combined 35 years in federal prison after being convicted of fraud. The notable Harris County couple were a few in the scam involving 9 defendants who were sentenced for their respective roles in a scheme to defraud the Department of Labor’s Office of Workers’ Compensation Programs and a healthcare program for U.S. service members and their families. Cruise has failed to show that any of the seven Carr factors weigh in his favor. Accordingly, the court concludes that the totality of the circumstances do not favor allowing Cruise to withdraw his guilty plea. The operation included one additional pharmacy owner, a physician, two pharmacists, and three patient recruiters.

Houston power couple sentenced to federal prison in $126 million fraud scheme

Along with three patient recruiters and others, the group submitted fraudulent claims to Tricare and the Department of Labor's Office of Workers' Compensation Programs for prescriptions prescribed to injured federal workers and armed forces members. Defendants paid kickbacks to patient recruiters and physicians to prescribe the drugs, which were chosen based on their reimbursement amounts. "The defendants also paid kickbacks to patient recruiters and physicians to prescribe these drugs. The defendants chose the particular compounds and other drugs based not on the patients’ medical needs but in light of the amount of reimbursement for the drugs. The drugs were then mailed to patients, even though the patients often never requested, wanted, or needed them." Texas physician James Don Jackson, MD, and eight others including three pharmacy owners, two pharmacists and three patient recruiters, were sentenced for their roles in a $126 million compounding pharmacy fraud scheme designed to bilk workers' compensation programs and Tricare, the Justice Department said April 14. The Justice Department outlined the alleged scheme, stating, "The defendants submitted false and fraudulent claims to the OWCP and TRICARE for prescriptions for compounded and other drugs prescribed to injured federal workers and members of the armed forces. The defendants paid kickbacks to patient recruiters and physicians to prescribe those drugs, and chose the particular compounds and other drugs based on the amount of reimbursement for the drugs.

9 Sentenced In $126M Government Aid Scheme - Law360

9 Sentenced In $126M Government Aid Scheme.

Posted: Fri, 14 Apr 2023 07:00:00 GMT [source]

Workers Compensation News Topics

Cruise, a former co-owner of Assurance Consolidated Pharmacy, was sentenced to 20 years in prison, according to the department. Other defendants were given shorter sentences, ranging from one to ten years in federal prison. He provided no credible support for his change of position, and his conclusory allegations were substantially undercut by the government's cross-examination. In light of the court's detailed admonitions to Cruise regarding the importance of answering truthfully and Cruise's admission under oath in open court that all of the facts stated in the factual basis were true, the court is not persuaded by Cruise's selfserving, last-minute assertion that he is not guilty.

He, along with other members of the conspiracy, recruited injured federal workers or claimants to sign up with the IFWAA in exchange for free assistance with their workers’ compensation claims. A Houston couple was sentenced to federal prison for their involvement in a $126 million fraud scheme. Cruise argues that his Motion is not unduly delayed and that allowing him to withdraw his plea will not unreasonably prejudice the government. Cruise filed his Motion more than 17 months after he pleaded guilty, and approximately two weeks before his sentencing. See Carr, 740 F.2d at 345 (describing as "not promptly filed" a motion to withdraw filed twenty-two days after the plea). At his rearraignment the court explained to Cruise that the court was required to ask him a number of questions.

Defendant's sentencing was continued several times so that he could continue to cooperate with the government. On December 27, 2022, the court entered an order resetting the defendant's sentencing for March 2, 2023. John Cruise and his wife, LaShonia Johnson, were the co-owners of Assurance Consolidated Pharmacy in Spring, Texas, and Cruise was the owner of the Injured Federal Workers Advocate Association (“IFWAA”).

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On March 6, 2023, a United States Probation Officer filed Cruise's final PSR (Docket Entry No. 659). On March 30, 2023, twenty-four days after the final PSR was issued and approximately two weeks before his sentencing hearing, Cruise filed the pending Motion to Withdraw Plea ("Cruise's Motion") (Docket Entry No. 682). The United States filed the Government's Opposition to Defendant John Cruise and Lashonia Johnson's Motions to Withdraw Pleas (Under Seal) ("Government's Response") on April 2, 2023 (Docket Entry No. 684). Four additional defendants — Dr. Jay Bender, Dr. Deepak Chavda, Donathan Kemp and Naresh Jivanji — are scheduled to be sentenced on May 25. The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with False Claims Act and Anti-Kickback litigation and white collar criminal matters.

A Houston power couple has been sentenced to a combined 35 years in federal prison after being convicted of fraud. The U.S. Department of Justice said Sherod Brown, 44, of Las Vegas, was among nine defendants sentenced Thursday for their roles in defrauding the Department of Labor’s Office of Workers’ Compensation Programs (OWCP) and TRICARE. Former compounding pharmacy co-owners John Cruise, LaShonia Johnson and Kenny Ozoude were sentenced to 20 years, 20 years and 15 years in prison, respectively.

Nine Sentenced in Texas for $126 Million Fraudulent Scheme Compounding Drugs

Because the court has accepted Cruise's guilty plea, Cruise's Motion is governed by Federal Rule of Criminal Procedure ll(d)(2). Rule ll(d)(2)(B) provides that a defendant may withdraw a plea of guilty after the court accepts the plea if the defendant can show "a fair and just reason for requesting the withdrawal." Cruise and Johnson also ran a pharmacy in Texas that dispensed the compounded medicines. The president of another pharmacy in Houston also participated in the fraud, according to court documents.

The drugs were then mailed to patients, even though the patients often never requested, wanted, or needed them. According to a news release, the defendants submitted false and fraudulent claims to the OWCP and TRICARE for prescriptions for compounded and other drugs prescribed to injured federal workers and members of the armed forces. The defendants chose the particular compounds and other drugs based not on the patients’ medical needs but in light of the amount of reimbursement for the drugs. The defendants submitted false and fraudulent claims to the OWCP and TRICARE for prescriptions for compounded and other drugs prescribed to injured federal workers and members of the armed forces.

It was alleged that the defendants in compounding pharmacy fraud scheme submitted false and fraudulent claims or prescriptions for compounded and other drugs prescribed to injured federal workers and members of the armed forces. The defendants also paid kickbacks to patient recruiters and physicians to prescribe these drugs. The compounds and other drugs were not based on the patient’s medical needs, but on the amount of reimbursement.

Those drugs were then mailed to patients, despite the patients never requesting them. The couple, 52-year-old John Cruise and 50-year-old LaShonia Jackson, owned a Harris County pharmacy, according to the U.S. The nine defendants submitted false claims to the Office of Workers’ Compensation Programs and TRICARE for prescriptions of drugs normally prescribed to injured federal workers. The defendants paid kickbacks to patient recruiters and physicians to prescribe the drugs, according to the U.S. On Thursday, April 13, 2023, nine co-conspirators were sentenced to various prison terms for their respective roles in a fraud scheme in which they submitted false claims to Tricare and the Office of Workers’ Compensation Programs.

His wife, Johnson, was sentenced to 15 years and also required to pay $32 million in restitution, mirroring her husband’s penalty. A Florida man was sentenced today to one year and one day in prison for using his hedge fund management company as part of a years-long, multimillion-dollar Ponzi scheme. Four additional defendants (Dr. Jay Bender, Dr. Deepak Chavda, Donathan Kemp, and Naresh Jivanji) are scheduled to be sentenced on May 25. The fraudulent operations involved doctors in Houston, Dallas, Atlanta and Columbus, Ohio, and pharmacies, and federal worker advocates in Houston, federal prosecutors told the Houston Chronicle newspaper. Cruise was sentenced to 20 years’ imprisonment, while Johnson was sentenced to 15 years.

The drugs were then mailed to patients, who often hadn't requested or needed them, the department said. Kenny Ozoude, James Don Jackson, Nirvana Hightower, Keith Hudson, Audra Jones, Terrance Aice and Sherod Johnson were also sentenced for their involvements in the scheme. Cruise and Johnson were hit with the hardest sentences for their significant involvement in the scheme. Cruise received a 20-year prison term and was ordered to pay around $32 million in restitution.

Other members were sentenced to between 18 months and ten years imprisonment. Department of Justice, the nine took part in a years-long multistate scheme to defraud the Department of Labor’s Office of Workers’ Compensation Programs and TRICARE, the healthcare program for U.S. service members and their families. A New Jersey doctor was sentenced today to two years in prison and barred from practicing medicine for unlawfully distributing addictive opioids without performing necessary patient assessments. A New York man was resentenced today to nine years in prison and ordered to pay $39 million in restitution for his role in a multimillion-dollar health care kickback and tax...

The court told Cruise that it was very important that he listen carefully and provide truthful and complete answers to all of the court's questions for several reasons. The court reminded Cruise that he was under oath and, therefore, that if he gave an untrue answer he could be charged with the separate crime of perjury. The court also explained to Cruise that his answers must be truthful and complete because the court was required to make a number of findings based on Cruise's answers before it could accept his guilty plea. The court informed Cruise that he should ask the court to repeat or explain anything that he did not understand and that he could confer with his attorney at any time without asking for permission from anyone. Three doctors and two pharmacy operators have been indicted in connection with a compounded drug scheme that defrauded the federal workers' compensation program and Tricare out of almost $40 million, prosecutors said.