PHILADELPHIA — US Attorney Jennifer Arbittier Williams announced that the United States has filed an expanded civil lawsuit against pharmacist Todd Goodman and pharmacy employees Eric Pestrack and Lee Kamp for their alleged involvement in years of illegal and systematic dispensing of opioids and other controlled substances have filed healthcare fraud at Philadelphia-based pharmacy Spivack, Inc., formerly known as Verree Pharmacy. These individuals were added as defendants in the previously filed lawsuit against Verree and its previous owner, pharmacist Mitchell Spivack, over the same alleged schemes. The amended complaint continues to seek civil penalties and civil damages, which could total millions of dollars, and injunctive relief.
The lawsuit, which added Goodman, Pestrack and Kamp, was the culmination of a multi-year federal-state investigation. The amended complaint alleges that Verree Pharmacy, Spivack, Goodman, Pestrack and Kamp had a responsibility to only dispense opioids and other controlled substances when it was appropriate. Instead, the United States maintains that Verree and these individuals dispensed the drugs even when faced with numerous red flags that indicate distraction — such as extreme doses of opioids, dangerous combinations of opioids, and other “cocktail” drugs that preferred by addicts. excessive cash payments for the drugs, apparent fake prescriptions, and other signs that the pills were being diverted to illegal uses.
The amended complaint alleges that Verree — the largest retail pharmacy that purchased oxycodone in Pennsylvania — was a statewide and regional outlier in deviant purchasing, dispensing and billing of controlled substances. To avoid scrutiny by the drug dealers who sold them the pills, Verree allegedly misrepresented Spivack in order to maintain the facade of legitimacy and to supply the pharmacy with pills critical to its profits. Behind this facade, the amended complaint alleges that Spivack siphoned millions of dollars from the pharmacy while the public suffered the consequences, including a patient who overdosed and died next to Spivack-dispensed Verree Pharmacy bottles.
The amended United States complaint also alleges that Verree, Spivack, Goodman, Pestrack and Kamp were involved in a widespread healthcare fraud scheme that involved fraudulent billing for medications not actually dispensed. The supposed cornerstone of the scheme was a code that pharmacy employees used in their internal computer system: “BBDF” or “Bill But Don’t Fill”. Verree, Spivack, Goodman, Pestrack and Kamp allegedly used BBDF as a way to cover their losses on other drugs and increase the pharmacy’s illicit profits by falsely claiming to insurers, including Medicare, that they had a drug delivered to a patient delivered when they were at the pharmacy fact that they hadn’t. According to the amended complaint, this sophisticated fraud — which one of the employees admitted to investigators — resulted in significant losses to Medicare and other federal programs.
The lawsuit seeks to award Verree, Spivack, Goodman, Pestrack and Kamp civil penalties and damages under the Controlled Substances and False Claims Acts. If Verree, Spivack, Goodman, Pestrack and Kamp are found liable, they face civil penalties of up to $68,426 for each illegally dispensed prescription, civil penalties of up to $23,607 for each false claim they make to state health programs, and treble damages for alleged health fraud against federal programs. The court may also award an injunction to prevent the defendant from committing further controlled substance violations.
If the public has information regarding the Verree Pharmacy or any other allegation of healthcare fraud, individuals should contact the HHS-OIG hotline at 800-HHS-TIPS.
The case is being investigated by the Philadelphia Field Division of the Drug Enforcement Administration, the Bureau of Enforcement and Investigation of the Pennsylvania Department of State, HHS-OIG, and the Pennsylvania Office of the Attorney General, with additional assistance from the Office of Personnel Management Office of the Inspector General, the Defense Health Agency and the Defense Criminal Investigative Service. The civil investigation and litigation will be conducted by Assistant US Attorney Anthony D. Scicchitano and Certified Public Accountants Dawn Wiggins and George Niedzwicki.
The amended complaint contains only allegations that the United States must prove if the case goes to trial.