2 St. George men charged in New York federal court for allegedly bilking insurance companies out of millions – St George News

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ST. GEORGE –An indictment filed in the US District Court in New York alleges two St. George business owners of bilking insurance companies out of tens of millions of dollars in fraudulent prescription claims.

Courtroom in US District Court in Brooklyn, New York | Photo by Douglas Palmer/Flickr, St George News

According to the complaint filed in US District Court in Brooklyn, New York, and unsealed on Wednesday, two St. George men, David Gary Bishoff, 37, and Brycen Kay Millett, 31, each face one federal felony charge of conspiracy to commit health care fraud following an investigation that was launched by the FBI in 2020.

According to the complaint, agents allege that Bishoff and Millett ran a number of call centers based out of Utah to fraudulently bill private health insurers for telemedicine prescriptions, and while the operations were initially based in the US, the defendants later moved the call centers overseas .

Millet owned three call center companies — Brace Today, Advanced Response and Midway Connection — and federal prosecutors allege they were used in the scheme to funnel money back and forth between multiple bank accounts owned by the defendants and to finance the operation.

According to the complaint, the scheme went something like this:

First, the call centers would contact the individuals enrolled in private insurance programs and offer them medications at no cost and without any medical exam to determine the medical necessity for those medications. Some individuals agreed to receive the medication, while others did not. But in either case, the complaint states, the defendants generated false prescriptions for these individuals.

From there, Bishoff, using the alias “Bobby Fisher,” and Millett, also known as “Brett Johnson” along with several codefendants, recruited licensed physicians whose job it was to review the prescriptions presented by health care practitioners following a telemedicine appointment with the patient.

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These licensed physicians would then create the prescriptions as requested by the practitioners and from there, the prescriptions were sent to a number of pharmacies owned by the defendants and were purportedly filled and sent to the patient. The insurance companies were then billed for the medication on behalf of the insured.

Through the course of the investigation, however, agents found no evidence that any mid-level practitioners ever recommended or prescribed any medications during the alleged telemedicine appointments.

Agents also learned the defendants were using the National Provider Identifier number assigned to each of the licensed physicians which identified that particular doctor as the one prescribing the medication – unbeknownst to the physicians and without their authorization.

The evidence also suggested that both Bishoff and Millett purchased or acquired a number of brick and mortar pharmacies that already had established relationships with insurers and the necessary board certifications to operate. Federal prosecutors say these businesses were acquired fraudulently by using buyer straws to conceal the fact it was the defendants who were the alleged owners of the businesses.

The pharmacies, operating under their preexisting licensing in some cases, or using the name of the straw buyer in others, then would bill the insurance companies for the prescriptions submitted. In many cases, the complaint says, the patient never received the medications that were purportedly filled and then billed to their insurance companies.

Once the insurance companies caught on to the scheme they terminated the relationship with the fraudulent pharmacy, and once that happened, the defendants allegedly abandoned that particular pharmacy and then set up another one elsewhere — a process that continued throughout the scam.

The investigation also revealed that private insurers “paid tens of millions of dollars in reimbursements for fraudulent prescriptions,” according to the complaint.

The scheme operated using a series of call centers, including three based in Utah, one of which operated under the business name of Brace Today, a company that opened in 2016 and offered telemedicine services. Both Bishoff and Millett claimed ownership of the call center on various documents recovered by investigators and in August 2018, they moved the call center to a different location in Utah and began to operate the business as Advanced Response.

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The third company, Midway Connections, opened a call center in June 2017 in Richfield under the name of Millett’s wife, who was listed as the owner on bank documents later found by investigators, but she never worked for the company, according to several employees that were later interviewed by the FBI.

Prosecutors also allege that while Midway Connections was listed as a “medical insurance benefits” company, it operated as a call center. In 2019, the company closed its doors in Utah and the operation was moved overseas.

In essence, the defendants billed insurance companies for medications purportedly processed by mid-level practitioners during a telemedical appointment using a series of upper-level physician’s licenses. Those prescriptions, if filled, were processed through pharmacies also owned by the defendants purchased using straw buyers.

The reality, however, is that instead of patients being seen during telemedicine appointments, they were contacted by one of several call centers and told they could get their medications for free. Then their insurance company would be billed for those prescriptions – without ever having an appointment with a provider. And, more often than not, the complaint alleges, the patients never received the medications as promised.

Additionally, the complaint says, straw purchasers often were unaware that the pharmacy they purchased was involved in the scheme, and the physicians whose licenses were used to bill the insurance company were in the dark as well.

The scheme was kept afloat by funneling funds between the different call centers and the first two, Brace Today and Advanced Response, acted as shell companies used to funnel money from overseas into the US, and those funds were then used to pay operating and other costs to keep the scheme going, as well as providing funds to the defendants.

During numerous interviews, investigators learned that call center employees were falsely implying they were affiliated with the insured’s pharmacy, doctor or insurance company in order to gather information on the patient, or to convince them to accept certain medications.

In early 2020, beneficiaries reported receiving third-party calls selling migraine medication, pain creams and other medications at no cost to the patient. A majority of the patients never received the items as promised – only to learn later their insurance company had been billed for the items.

The same held true for patients whose insurance companies paid for medications they never ordered. Complaints began to funnel into the call centers from insurance companies stating they were unable to secure the documentation needed to reimburse the company for prescriptions purportedly provided to patients. The insurers also reported receiving calls from their beneficiaries reporting they were being billed for medications they never authorized or for those they were told were “free.”

The complaint also states that patients also were contacting the call centers saying they had never received their medications.

In August 2019, the state board in Alabama issued an emergency order to suspend the operations of one of the pharmacies purchased by the defendants, less than a month after the business operations began. Ultimately, the state revoked the pharmacy’s license.

The previous month, the company received notification from one of the insurers that more than $1.7 million had been billed for “claims that were invalid.”

From July 2018 through February 2019, nearly $500,000 was transferred from Brace Today. And from October 2018 through May 2020, more than $931,000 was transferred from Advanced Response and another $1 million from Midway.

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The amount of money transferred from each of the companies represented more than 97% of the business’ total revenue.

Over a three-year period starting in 2018, prosecutors allege that Millett received nearly $1.8 million from Midway’s multiple bank accounts, while Bishoff received $5.7 million from multiple bank accounts owned by Brace Today and Advanced Response.

In total, more than $12 million was disbursed to Bishoff and Millett from the first two call centers over the four year period.

The complaint was filed in federal court in Brooklyn, New York on March 7, and at the time of filing, federal prosecutors requested the complaint remained sealed so as not to jeopardize the investigation or to reduce the risk that disclosure may increase the risk that both defendants would flee, since neither had been arrested at that point. The complaint remained sealed until April 20.

The case was filed in the Eastern District of New York since one of the defendant’s, Hafizullah Ebady, lived in New Jersey when the case was filed and will retain jurisdiction.

Under federal law, however, the defendants must appear before a federal magistrate that is closest to where they live for identification and to establish custody arrangements, which in this case was the US District Court of Utah. The file was then forwarded to Magistrate Judge Paul Kohler in St. George.

As such, both defendants were taken into custody by the US Marshals office and then appeared before Kohler last month, where they were identified during an initial appearance held in federal court in St. George on March 13, and then released from federal custody. With both defendants identified and out on pretrial release, all hearings going forward in the case will take place in federal court in New York.

This report is based on statements from court records, police or other responders and may not contain the full scope of findings. Persons arrested or charged are presumed innocent until found guilty in a court of law or as otherwise decided by a trier-of-fact.

Copyright St. George News, SaintGeorgeUtah.com LLC, 2022, all rights reserved.

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