Bolos Peter, Telemedicine Pharmacy Fraud, Tennessee 2022

A nationwide health care fraud scheme that deceived pharmacy benefit managers and private insurers has resulted in severe penalties for seven individuals and seven related corporate entities in Tennessee.

The scheme, orchestrated by Peter Bolos and his co-conspirators, involved tens of thousands of prescriptions and millions of dollars in claims for prescription drugs. Pharmacy benefit managers, such as Express Scripts and CVS Caremark, were deceived into authorizing claims that private insurers, including Blue Cross Blue Shield of Tennessee, and public insurers, such as Medicaid and TRICARE, paid to pharmacies controlled by the co-conspirators.

Peter Bolos was convicted by a federal jury in December 2021. Co-conspirators Michael Palso, Andrew Assad, Scott Roix, Larry Smith, Maikel Bolos, and various associated business entities pleaded guilty to their roles in the conspiracy. Arun Kapoor and Mihir Taneja pleaded guilty to felony misbranding in a conspiracy with Bolos.

On May 16, Bolos was sentenced to 14 years in prison and $2.5 million in forfeiture. Bolos was also ordered to pay nearly $25 million in restitution. On the same date, Michael Palso, 48, of Lutz, Florida, was sentenced to 33 months in prison and ordered to pay nearly $25 million in restitution.

On May 17, Larry Smith, 52, of Tampa, was sentenced to 42 months of imprisonment. The now-defunct corporate entities created by Smith, Alpha Omega Pharmacy, Germaine Pharmacy, Zoetic Pharmacy, ULD Wholesale LLC, and Tanith Enterprises, were sentenced to pay nearly $25 million in restitution.

On May 18, Mihir Taneja, 47, of Tampa, was sentenced to 10 months of imprisonment and a $10,000 fine. Sterling Knight, a now-defunct corporate entity created by Taneja and Arun Kapoor, was sentenced to pay $21 million in restitution.

On May 19, Arun Kapoor, 48, of Temple Terrace, Florida, was sentenced to three years’ probation and a $10,000 fine. Maikel Bolos, 36, of Tampa, was sentenced to 15 months of imprisonment and a $25,000 fine.

The sentencing reflects the seriousness of the large-scale fraud scheme, in which the defendants deceived consumers to facilitate the distribution of drugs without proper medical oversight and overbilled insurers for illegal prescriptions. The U.S. Attorney’s Office for the Eastern District of Tennessee will continue to support the cooperation among its federal law enforcement partners to bring criminal swindlers to justice.

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