A federal jury has convicted David Byron Copeland, a Florida man, for his role in a $54 million bribery and kickback scheme. The scheme targeted TRICARE, a federal program that provides health insurance benefits to active duty and retired service members and their families.
Copeland, 55, of Tallahassee, was a part-owner and senior sales manager at Florida Pharmacy Solutions (FPS), a pharmacy specializing in compounded prescription drugs. According to court documents and evidence presented at trial, Copeland and his accomplices engaged in a practice known as “test billing.” This practice was used to develop the most expensive combination of compounded drugs to maximize reimbursement from TRICARE.
The Kickback Scheme
The group targeted physicians who treated TRICARE beneficiaries. They paid bribes and kickbacks to physicians and salespeople to encourage the referral of prescriptions to FPS. These bribes included lavish hunting trips and expensive dinners. Additionally, Copeland and his accomplices used “blanket letters of authorization” that allowed FPS to modify the prescription components to make them more profitable.
Copeland and his sales representatives received millions of dollars in kickbacks. These were based on a percentage of the amount that TRICARE reimbursed for their prescriptions. This provided an incentive to seek prescriptions for the most expensive compounded drugs possible, including pain and scar creams. Copeland facilitated the kickbacks through companies he set up to receive and funnel the payments. From late 2012 through mid-2015, FPS billed TRICARE over $54 million for its compounded pharmaceuticals.
The Verdict and Sentencing
The jury convicted Copeland of two counts of soliciting and receiving illegal health care kickbacks and three counts of offering and paying illegal health care kickbacks. However, the jury acquitted Copeland of conspiracy to defraud the United States and to pay and receive illegal health care kickbacks. His sentencing is scheduled for Sept. 14. He faces a maximum penalty of 10 years in prison for each kickback count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Two other men, James Wesley Moss, the former chief executive officer of FPS, and Michael Gordon, a former FPS sales representative, previously pleaded guilty for their roles in the scheme and are awaiting sentencing.
The Investigation and Prosecution
The announcement of the conviction was made by Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; U.S. Attorney Roger Handberg for the Middle District of Florida; and Special Agents in Charge from the U.S. Department of Defense Office of Inspector General (DOD-OIG), the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG), the U.S. Department of Veterans Affairs Office of Inspector General (VA-OIG), and the FBI Tampa Field Office.
The DOD-OIG, HHS-OIG, VA-OIG, and FBI investigated the case. Trial Attorneys Devon Helfmeyer, Katie Rookard, and Clayton Solomon of the Criminal Division’s Fraud Section are prosecuting the case.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, comprised of 15 strike forces operating in 25 federal districts, has charged more than 5,000 defendants who collectively have billed the Medicare program for more than $24 billion.
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