Insurance Fraud NEWS
Ex-drug rep in N.Y facing 15 years in prison for $45M drug scam
February 19, 2018, North Tonawanda, NY
A North Tonawanda man is going to have to pay back $45 million, and is facing the possibility of 15 years in prison, after admitting to a massive pharmacy fraud scheme.
On Wednesday, Steven Butcher pleaded guilty in U.S. District Court in Newark NJ to two charges: conspiracy to commit health care fraud and violation of the Anti-Kickback Statute.
Butcher, a former pharmaceutical sales representative, owned MedMax LLC, based in Niagara Falls. Through MedMax, Butcher targeted people covered by private and federally-funded insurance plans and convinced them get the specially made medications, even if they didn't need them.
According to charging documents, from 2014-2016, the 39-year-old organized the large-scale scheme to defraud health insurance plans by submitting phony claims for medically unnecessary and costly prescription compounded medications; including scar creams, pain creams and metabolic supplements.
Investigators also found Butcher had recruited pharmaceutical reps to work with him. Butcher admitted that they conspired to pay kickbacks to persuade people to bill TRICARE a healthcare benefit program for members of the military and their families.
2 On Your Side reached out to Butcher's lawyer, Herbert Greenman, who wouldn't say much regarding the case, but did tell us why Butcher pleaded guilty.
"He accepted responsibility for what had taken place, but this whole situation was pretty widespread throughout the United States, "Greenman said. "So, it's not limited to Steve or anybody working with him. There are parts of it where he had gotten involved through other people, that he knows he shouldn't have been involved with and that's pretty much the reason he decided to take the plea."
For the conspiracy to commit health care fraud charge, Butcher faces a maximum of 10 years in prison. For the conspiracy to violate the Anti-Kickback law, he's looking at a max of five years.
In addition to the $45 million in restitution, Butcher may have to pay $250,000 in fines for each charge.