Global Telehealth Scam Busted for Bogus Call Centers, Fake Prescriptions, and Conspiring Pharmacies

A multi-level, complex, and international telemedicine scheme comes crashing down as the seventh defendant pleads guilty to health care fraud conspiracy in a Brooklyn federal court. Seven out of eight of the defendants have pleaded guilty, while the eighth, ringleader Brian Sutton, remains at large overseas. Between 2017 and 2022, the defendants and their organization acquired over $1.7 billion in fraudulent prescriptions from pharmacies across the United States, some of which were located in Brooklyn, Long Island, and Staten Island.  

The international scam consisted of an intricate web of fraud, implicating various different parties and relying on the trust of innocent individuals contacted through bogus call centers. The guilty parties secured U.S. pharmacies with ties to private health insurance companies before collaborating with said pharmacies to solicit unneeded prescriptions to the general public using their call centers together with a network of enlisted physicians. Their process resulted in $1.7 billion worth of bogus prescriptions filled by over 50 implicated pharmacies nationwide and the deceitful billing led to private insurers shelling out over $500 million. 

Sutton, the director of the intricate con, has fled and is believed to be in Russia while the other seven defendants have been indicted and arrested. Under Sutton’s orders, the nefarious network managed call centers originally located in Utah and later moved to Russia following Sutton’s plans to contact beneficiaries of private insurers suggesting free or low cost prescriptions minus the required medical exam needed to determine whether the medications were even necessary. Doctors were also conned into the scam, recruited to review and approve prescriptions sent by medical practitioners following telehealth visits that never actually took place. Armed with these physician’s names and National Provider Identifier (NPI) numbers, the guilty parties created fraudulent prescriptions that never reached the intended patients. 

By relocating their operations to foreign countries and encrypting all internal communications, the ring laundered hundreds of millions of dollars through straw owners and shell companies, often using aliases to further disguise their collusion. A combination of tangible and digital operations abetted the five year fraud, as defendants snatched up brick and mortar pharmacies, installing software that enabled their reimbursement requests to be sent to private insurers remotely. Additionally they trained and managed a phony team of billers employed to remotely process thousands of reimbursement requests.

According to a press release from the Eastern District of New York United States Attorney’s Office, “Using aliases, shell companies and straw owners, moving their operations overseas, and laundering millions of dollars through foreign countries, the defendants conducted a sophisticated, multi-faceted scheme, employing scores in call centers and remote billing teams to line their pockets to the tune of more than a billion dollars. Health care fraud victimizes American businesses and drives up the cost of care for all. Let these convictions serve as a message: we will work tirelessly to investigate and prosecute those who exploit American health care plans no matter where in the world they operate.”

With healthcare landing on the top five list of industries private equity firms invest in, it’s critical to remain aware of the rampant fraud running game beneath an often well postured and masterfully masked exterior company. Pre-investment due diligence shines a light through the veil, exposing aliases, foreign operations, problematic pasts, and any other red flags hiding in plain sight. Schedule your free demo with Intelligo today and let us dig through the dirt ensuring every investment is planted in fertile soil. Our scalable and customizable services offer checks on both a national and global scale and grant you the ability to vet both the companies and their owners you are looking to invest with so you aren’t blindsided by bad actors.