Inspections, Compliance, Enforcement, and Criminal Investigations
October 19, 2010: Pharmacy Owner Charged with $12 Million Dollar Health Care Fraud
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that the former owner of a closed pharmacy located in Sciota, Monroe County, Pennsylvania, has been charged with health care fraud, false statements relating to a health care matter, and misbranding of pharmaceuticals.
According to United States Attorney Peter J. Smith, the three-count Indictment alleges that Benny Salerno, age 40, of Stroudsburg, Pa, was the owner of a closed pharmacy, a pharmacy that supplies prescription medication to health care institutions. The Indictment further alleges that Salerno directed employees to retrieve unused portions of medications from the health care institutions and return the unused medications to stock for future use, regardless of lot number or expiration. Such conduct is in direct violation of the Pennsylvania Pharmacy Act and the Federal Food and Drug Administration regulations, which prohibit the return and reuse of medications once they have left the pharmacy. Such items are considered to be misbranded pharmaceutical products.
Salerno then sought reimbursement from government health care insurance providers for dispensing the items.
The Indictment alleges that the criminal conduct occurred over a period spanning approximately five years from 2001 until February 2006. The Indictment also seeks forfeiture of approximately $12 million dollars of illicit proceeds obtained by Salerno as a result of the alleged fraud scheme.
"While OIG works to shield Medicare and Medicaid from fraudulent billing, we also have a role in protecting the safety and health of some of America’s most vulnerable citizens," said Nick DiGiulio Special Agent in Charge for the Philadelphia Region of the Office of Inspector General of the Department of Health of Human Services. “Violating federal and state law, as is charged in this indictment, is bound to result in investigation and prosecution by OIG and its law enforcement partners."
U.S. Attorney Smith noted that the prosecution of health care fraud cases and the recovery of assets obtained through such fraud schemes are among the highest priorities of the United States Department of Justice.
If convicted, Salerno faces a term of imprisonment of up to 28 years and fines of up to $750,000.
This investigation was conducted by the Office of Inspector General for Health and Human Services, the Food and Drug Administration and the Pennsylvania Office of Attorney General and is being prosecuted by Assistant United States Attorney Amy C. Phillips.