United States Attorney Roger B. Handberg announced that Mihir Taneja has agreed to pay the United States $2 million to resolve allegations that he violated the False Claims Act by causing the submission of claims for compounded medicated pain and scar creams related to prescriptions tainted by a kickback arrangement. The conduct covered by the settlement agreement relates to allegations that Taneja conspired with Larry Smith, the owner of Z Stat Medical, LLC d/b/a Oldsmar Pharmacy, to enter into a kickback arrangement with a marketing company, Centurion Compounding, Inc., which led to millions of dollars in TRICARE reimbursement for compound prescriptions.
Specifically, the settlement resolves allegations that Taneja and Smith negotiated an arrangement with Centurion that paid Centurion a percentage of profits from TRICARE claims it referred to Oldsmar Pharmacy. As a result, from November 2014 to February 2015, Oldsmar Pharmacy submitted thousands of claims for reimbursement to TRICARE for compounded drugs that were tainted by kickbacks and, therefore, were false. The actions of Taneja and his co-conspirator played out against a larger trend of fraud against TRICARE involving compounded prescriptions. TRICARE’s costs for compounded drugs skyrocketed during this period, rising from $5 million in 2004 to $514 million in 2014, before reaching a high-water mark of $1.75 billion in fiscal year 2015.
