Shahjahan Sultan, et al., Multi-Million Dollar Compounding Pharmacy Fraud Scheme, Mississippi 2019

Physicians, Nurses Indicted in Multi-Million Dollar Compounding Pharmacy Fraud Scheme

Two Mississippi-licensed physicians and two Mississippi-licensed registered nurses were charged in an indictment unsealed today for their roles in a multimillion dollar scheme to defraud TRICARE, the health care benefit program serving U.S. military, veterans and their respective family members, as well as private health care benefit programs Blue Cross & Blue Shield of Mississippi and United Healthcare of Mississippi.

The indictment was unsealed upon the arrests of Shahjahan Sultan, M.D., 37, of Madison, Mississippi; Thomas Edward Sturdavant, M.D., 56, of Kingsport, Tennessee; Freda Cal Covington, R.N., 54, of Hattiesburg, Mississippi; and Fallon Deneem Page, R.N., 36, of Soso, Mississippi.

The defendants were each charged in various counts of a 15-count indictment returned on June 11, 2019 in the Southern District of Mississippi. The indictment alleges that Sultan, Sturdavant, Covington and Page participated in a scheme to defraud TRICARE and private health care benefit programs by prescribing and dispensing medically unnecessary compounded medications, some of which included ketamine, a controlled substance, to individuals, at times without first examining them, for the purpose of having an Ocean Springs, Mississippi-based compounding pharmacy dispense these medically unnecessary compounded medications.

The indictment further alleges that, between March 2014 and February 2015, the defendants' scheme caused TRICARE and private health care benefit programs to reimburse the compounding pharmacy more than $7 million for dispensing the compounded medications prescribed by Sultan and Sturdavant. Sultan is alleged to have then paid Sturdavant for prescribing compounded medications to TRICARE beneficiaries and to have paid other co-conspirators for identifying and recruiting TRICARE beneficiaries to receive compounded medications.

The defendants will make their initial appearances this week before U.S. Magistrate Judge Michael T. Parker of the Southern District of Mississippi. An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

This case was investigated by the FBI and DCIS. Assistant Chief Dustin M. Davis and Trial Attorney Sara E. Porter of the Criminal Division's Fraud Section and Assistant U.S. Attorneys Mary Helen Wall and Kathlyn R. Van Buskirk of the Southern District of Mississippi are prosecuting the case.

Criminal Charges: Conspiracy to commit health care fraud and mail fraud, mail fraud, conspiracy to distribute and dispense a controlled substance, distributing and dispensing a controlled substance, conspiracy to pay and receive health care kickbacks, and paying health care kickbacks.

Source: https://www.justice.gov/archives/opa/pr/two-physicians-and-two-registered-nurses-indicted-mississippi-compounding-pharmacy-fraud