Prosecutors claimed the pharmacist made more than a million dollars in the scheme and used the funds to buy a fleet of luxury vehicles.
(CN) — The Department of Justice fought in the 11th Circuit Thursday to preserve the conviction of a pharmacist who prosecutors say participated in a half-baked scheme to fraudulently bill millions of dollars for topical creams.
The DOJ’s counsel urged a three-judge panel to uphold Ademola Adebayo’s conviction and 10-year sentence for his role in a health care fraud scheme that purportedly milked $121 million from private insurers, Medicare and the U.S. military’s civilian health care program.
Prosecutors say Adebayo personally made $1.5 million in the scheme and used it to buy a house and luxury vehicles, including a Ferrari, Lamborghini, Bentley, Porsche and two Cadillacs. They were all seized by the government.
He was convicted of various fraud and conspiracy charges after a four-day trial in January 2019 and was ordered to pay nearly $3.3 million in restitution.
Hatched at now-defunct A to Z Pharmacy in New Port Richey, Florida, the scheme involved Adebayo’s co-worker generating bogus prescriptions for topical creams that patients never actually requested from the pharmacy. A now-imprisoned doctor would sign off on the prescriptions without seeing or speaking to the patients.
At the direction of pharmacy owner Nicholas Borgesano Jr., the pharmacy’s drug-compounding facility would formulate the creams using a process that fraudulently maximized profits. The pharmacy billed for one ingredient, ethoxydiglycol, at the reimbursement rate listed for one-milliliter vials while purchasing the ingredient in four-liter bottles at vastly cheaper rates.
Borgesano and several other defendants pleaded guilty in the case.
On appeal in the 11th Circuit, Adebayo’s attorney Rachael Reese is arguing that the prosecution failed to prove Adebayo knew about the conspiracy and voluntarily participated in it.
Reese has sought to portray Adebayo as the manager of the retail side of A to Z Pharmacy, who had little direction over profiteering going on in the pharmacy’s compounding facility.
“Mr. Adebayo was identified [at trial] as the pharmacist acting in the front of the pharmacy,” Reese told the panel. “The testimony was that [defendant Edwin Young] was the person in the back, actively being the pharmacist in charge.”
The government maintains that the evidence overwhelmingly showed that Adebayo was in on the scheme.
Sofia Vickery, appellate attorney for the DOJ, told the panel that Adebayo’s knowledge of the conspiracy was evident in his role implementing prescription changes when claims were rejected – and his purported time fielding phone calls from confused patients who were receiving the bogus prescriptions.
Vickery reminded the court that Adebayo allegedly served as a straw owner of Havana Pharmacy, an entity that suddenly started submitting high volumes of claims right after A to Z came under close investigation by claims auditors.
The day Adebayo took ownership of Havana Pharmacy, he received $50,000 in payments from A to Z, according to Vickery. Three weeks later, when he signed an agreement with a high-volume pharmacy-benefit manager on behalf of Havana Pharmacy, he was paid $62,000 from a company owned by Borgesano, she said.
“In the month after he agreed to become the pretend owner of Havana Pharmacy, [the pharmacy’s] compound claims went from zero dollars to $1.3 million,” Vickery told the panel.
The panel is being asked to consider whether a district judge erred in denying Adebayo’s motion for acquittal. In order to grant acquittal from the bench, the judge would have to have found that no reasonable jury could find the defendant guilty.
Thursday’s oral arguments also took up the issue of whether the district judge properly applied a sentencing enhancement against Adebayo for use of a “special skill” and “sophisticated means” in the crime.
Reese insisted that Adebayo “was not using this special skill as a pharmacist to further the conspiracy” or the underlying fraudulent activity. She pointed to fellow defendants who she says managed to carry out the same alleged fraudulent activity as Adebayo without having medical or pharmaceutical training.
The government countered that when the hammer was coming down on A to Z Pharmacy, Adebayo handled claim auditors’ investigations in a manner that exploited his knowledge as a pharmacist to conceal the fraud.
According to the Bureau of Prisons, Adebayo is housed at Florida’s Marianna Federal Correctional Institute in Jackson County.
Borgesano, the pharmacy owner, received a 15-year sentence in the criminal case and is not scheduled for release until 2031.
Peter Williams, the doctor who signed off on the bogus prescriptions, received a two-year sentence in the Middle District of Florida, which was tacked onto a five-year sentence he received in a separate case in the state’s Southern District.
The appeal was fielded Thursday by U.S. Circuit Judge Charles Wilson, a Bill Clinton appointee, along with U.S. Circuit Judges Barbara Lagoa and Andrew Brasher, both appointees of Donald Trump.