TULSA, OK – A South Carolina doctor is shelling out $92,506.30 to settle allegations of participating in a brazen kickback scheme that bilked the federal TRICARE healthcare program, federal authorities announced Wednesday. Dr. Jerry Back, 62, allegedly received illegal payments for prescribing compounded pain creams through OK Compounding, a company at the center of a widening investigation into healthcare fraud in the Northern District of Oklahoma.
The settlement marks the eighth kickback resolution since January, signaling a concerted effort by the U.S. Attorney’s Office to crack down on unscrupulous medical professionals exploiting federal health insurance programs. U.S. Attorney Shores made it clear: “My office remains focused on protecting the integrity of our federal health care system by holding accountable…doctors who have allegedly cheated insurance programs.” The office vows to use “all tools at our disposal, including civil and criminal remedies,” to halt these corrupt practices.
According to investigators, beginning in 2013, Dr. Back prescribed the pain creams to his patients, effectively boosting sales for OK Compounding. The company then allegedly compensated Back with “medical director fees” ostensibly based on an hourly rate. However, authorities claim these payments were, in reality, illegal kickbacks – financial incentives for pushing the product, regardless of medical necessity. The fact that many of Back’s patients were covered by TRICARE, the Department of Defense healthcare program for veterans, family members, and retirees, turned the scheme into a violation of the False Claims Act.
“This settlement highlights the commitment of the Defense Criminal Investigative Service (DCIS)…to protect the integrity of the Department of Defense health care program,” stated DCIS Special Agent in Charge Michael C. Mentavlos. “DCIS will aggressively investigate those health care providers that attempt to defraud the DoD, in order to preserve American taxpayer dollars intended to care for our warfighters.” The core issue, officials say, is that financial incentives can compromise a physician’s objective medical judgment, leading to potentially harmful and fraudulent practices.
The civil False Claims Act is a key weapon in fighting healthcare fraud, allowing the government to recover lost funds and penalize those who abuse the system. The investigation into OK Compounding and its network of participating doctors is ongoing, and authorities are urging anyone with information about similar schemes to come forward. Citizens can report fraud against the Federal government in the Northern District of Oklahoma by contacting the U.S. Attorney’s Office at 918-382-2700 and speaking to a member of the Affirmative Civil Enforcement (ACE) Unit. TRICARE fraud can also be reported at https://www.justice.gov/civil/report-fraud.
The investigation was a collaborative effort involving DCIS, the Department of Labor – Office of Inspector General (OIG), IRS – Criminal Investigation Division, U.S. Postal Service – OIG, FBI, Department of Veterans Affairs – OIG, and the Department of Health and Human Services – OIG. Assistant U.S. Attorney Marianne Hardcastle handled the matter. While the settlement resolves allegations, it’s important to note that no determination of liability has been made. The claims remain allegations only.
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Key Facts
- Agency: U.S. Secret Service
- Category: Fraud & Financial Crimes
- Source: Official Press Release
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