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Three Men Convicted in $515 Million Mississippi Healthcare Fraud Case Involving Pain Creams   

Three men were just sentenced in connection with a healthcare fraud scheme involving unnecessary pain cream prescriptions. Nationwide, the alleged misconduct cost government healthcare programs $1.5 billion. In Mississippi alone, the illegal billings amounted to $515 million.

Three Men Convicted in $515 Million Mississippi Healthcare Fraud Case Involving Pain Creams   

In 2016, law enforcement raided several pharmacies and doctor’s offices in Mississippi, the epicenter of the scheme. Five years later, Dempsey Levi, 51, and Jeffrey Rollins, 44, were sentenced to seven years in prison. Charles Smith, 43, who was indirectly involved in the scheme, was sentenced to five years of probation. Levi and Rollins were also ordered to make restitution of $16.3 million.

The alleged scheme involved the mass production and prescription of medicinal creams. These compounded medications are supposed to be made for individuals. The defendants allegedly caused unnecessary prescriptions to be written, triggering tainted Tricare, Medicare, and Medicaid billings.

Charles Smith had dealings with several companies involved in the scheme, including Wade Walters Consulting, Walters Holdings, Prime Care Revenue Management, P3 in a Pod, Performance Capital Leasing, IPMSI Holdings, Performance Accounts Receivable, and Advantage Marketing Professionals.

In the case of Levi and Rollins, their misconduct is tied to $18 million in fraudulent billings. The defendants used Ocean Springs’ Gardens Pharmacy and Alvix Laboratories to mass-produce and package the medicinal creams they promoted. Prescriptions were often written by medical practitioners who hadn’t seen the patients. Levi, Rollins, and Levi’s brother, Clark, co-owned the pharmacy, while Clark Levi owned Alvix.

After about 20 defendants pleaded guilty, four individuals still await trial. Information that came to light during multiple trials has been beneficial to understand this massive conspiracy.

In November 2020, Dr. Gregory Auzenne and Tiffany Clark stood trial in federal court in Jackson.

Auzenne allegedly received $127,000 in kickbacks in exchange for signing preprinted prescription forms for pain creams. Clark’s role involved identifying patients who met the criteria for the medicinal ointments.

According to Marco Moran, a pharmacist who testified at Auzenne and Clark’s trial, he opened his business, Custom Care Pharmacy, to process the illegal prescriptions. At trial, Moran claimed he directly paid Auzenne $127,000 in kickbacks.

Last January, the scheme’s mastermind, Wade Walters, was sentenced to 18 years in prison. The Hattiesburg resident was ordered to pay back over $340 million between restitution, fines, and forfeitures.

During the trial in Hattiesburg, the presiding judge told Walters, "You organized and orchestrated the fraud by your management skills. You involved so many people—good people. Maybe they would not have been involved if they hadn't been recruited by you."

The scheme especially targeted veterans, who often require pain creams, and Tricare greatly suffered. Wade pleaded guilty to conspiracy to commit health care fraud and conspiracy to commit money laundering.

Other Mississipi defendants who pleaded guilty include Howard Thomley, Hope Thomley, Glenn “Doyle” Beach, Thomas "Tommy" Spell Jr., Marco Moran, Brantley Nichols, Jason May, Gerald "Jay" Schaar, Dr. Albert Diaz, Gregory Parker, Susan Perry, Silas Richmond II, Dr. Shahjahan Sultan, Fallon Page, Gregory Auzenne, Tiffany Clark, and Freda Covington.

Whistleblowers who provided information about billing fraud and pharmaceutical fraud have received millions of dollars in awards. Under the False Claims Act, tipsters can receive up to 30 percent of any recoveries resulting from their information.

Medicaid Fraud Hotline: 888.742.7248 or Report Online
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