Case 7:17-cr-0114O Document 1 Filed in TXSD on 07/18/17 Page 1 of 9 United States District Court UNITED STATES DISTRICT COURT somber? ,Eml 0i 1?an SOUTHERN DISTRICT OF TEXAS i .. DIVISION UL I a 2017 Davis J. Bradley. Clerk UNITED STATES OF AMERICA V. Criminal No. 17 1 14 OMAR ESPERICUETA OSCAR ELIZONDO SEALED INDICTMENT THE GRAND JURY CHARGES: At all times material to this Indictment: GENERAL ALLEGATIONS 1. Blue Cross and Blue Shield of Texas a division of Health Care Service Corporation, was a private health care insurance provider that provided insurance contracts and plans, affecting commerce, under which medical bene?ts, items, and services were provided to insured individuals. 2. BCBS had two general business segments, fully?insured and self-insured. Fully? insured policies relate to businesses, government entities or individuals where BCBS receives premiums and then funds all covered services. Self?insured policies relate to businesses or government entities where BCBS is paid a fee to allow the employer to utilize BCBS networks and for BCBS to process and initially pay their employee and dependent claims, but subsequently reimburse BCBS for the actual amount paid to the provider for each claim. 3. BCBS contracted with an entity called Prime Therapeutics to process prescription drug related claims. In practice, a pharmacy in the BCBS network submitted claims for prescription drugs for BCBS bene?ciaries to Prime Therapeutics for processing and approval. If Case 7:17-cr-0114O Document 1 Filed in TXSD on 07/18/17 Page 2 of 9 the claim was approved, Prime Therapeutics noti?ed BCBS of the amount to be paid to the pharmacy. BCBS then sent the funds to Prime Therapeutics, who in turn remitted payment to the pharmacy. 4. BCBS was a ?health care bene?t program? as de?ned by Title 18, United States Code, Section 24(b). DEFENDAN TS 5. Defendant OMAR ESPERICUETA, a resident of Hidalgo County, Texas, is the owner and operator of Penitas Family Pharmacy, also known as Riverside Pharmacy, located in Penitas, Texas (?Penitas Pharmacy?). 6. Defendant OSCAR ELIZONDO, a resident of Hidalgo County, Texas, worked as a marketer for Penitas Pharmacy. COUNT ONE CONSPIRACY TO COMMIT HEALTH CARE FRAUD (18 U.S.C. 1347, 1349) 7. The Grand Jury incorporates by reference paragraphs 1 through 6 as though fully restated and re-alleged herein. 8. From in or about August 2015 to in or about January 2016, in the Southern District of Texas and elsewhere within the jurisdiction of the Court, defendants, OMAR ESPERICUETA and OSCAR ELIZONDO did conspire and agree with other persons known and unknown to the Grand Jury, to knowingly and willfully, in Violation of Title 18, United States Code, Section 1347, execute a scheme and artifice to defraud the health care bene?t program known as BCBS, by false or fraudulent pretenses, representations, or promises, any of the money and or property owned by or under the 2 Case 7:17-cr-0114O Document 1 Filed in TXSD on 07/18/17 Page 3 of 9 control of said health care bene?t program in connection with the delivery of or payment for health care bene?ts, items, and medical services. OBJECT OF CONSPIRACY 9. The object and purpose of the conspiracy and scheme was for OMAR ESPERICUETA and OSCAR ELIZONDO to unlawfully enrich themselves and others by submitting or causing others to submit false and fraudulent claims to BCBS for prescription pain patches and sear creams that were not medically necessary, were fraudulently authorized by a physician, not authorized by a physician, and/or not delivered to the bene?ciary. MANNER AND MEANS 10. In order to execute and carry out their illegal activities, defendants OMAR ESPERICUETA and OSCAR ELIZONDO conspired, between themselves and with others, known and unknown to the Grand Jury, and committed, aided and abetted the commission, or otherwise caused others to commit, one or more of the following acts: a) Due to the high reimbursement rate paid by BCBS for pain patches and sear creams, defendants and their co?conspirators targeted entities and employers throughout the Rio Grande Valley that provide employee health insurance through BCBS, such as the City of Mission, City of Pharr, Frontera Produce, and Point Isabel Independent School District (collectively the ?Insured Entities?). b) Defendants utilized marketers and contacts at the Insured Entities to approach and inform target employees that if they provided their insurance information, they could get ?free? pain patches and scar creams with no co-pay. c) Organized dinners at which employees of the Insured Entities were given free meals and drinks to entice them to provide their insurance information in exchange for ?free? pain patches and scar creams with no co?pay. (1) Paid kickbacks to Dr. Pedro Garcia in the form of cash, loans, and prescription medication in exchange for writing fraudulent prescriptions for pain patches and scar creams. Case 7:17-cr-0114O Document 1 Filed in TXSD on 07/18/17 Page temporary doctor?s of?ce for Dr. Pedro Garcia in a vacant building near the restaurant where employees were recruited for the purpose of writing fraudulent prescriptions for pain patches and scar creams for employees of Insured Entities. Utilized a recreational vehicle as a temporary mobile doctor?s of?ce for Dr. Pedro Garcia for the purpose of writing fraudulent prescriptions for pain patches and scar creams for employees of Insured Entities. The RV was parked in the parking lot outside the restaurants where employees were recruited. Throughout the dinner, employees were directed to the RV where Dr. Pedro Garcia wrote fraudulent prescriptions for pain patches and scar creams. Delivered prescription pain patches and scar creams to patients before the patient saw a doctor or received a prescription. Billed BCBS for pain patches and scar creams that were not delivered to patients. Used the identity and insurance information of patients to submit fraudulent claims to BCBS without the authorization or consent of the patient. Created ?ctitious documentation purporting to document collection of co?pays by patients, when in fact the required co?pay was not collected. In connection with the fraudulent scheme, submitted fraudulent claims to BCBS totaling $1,794,969. All in violation of Title 18, United States Code, Sections 1347 and 1349. 11. 12. COUNTS TWO THROUGH EIGHT HEALTH CARE FRAUD (18 U.S.C. 1347) The Grand Jury incorporates by reference paragraphs 1 through 6 and paragraph 10 as though fully restated and re?alleged herein. From in or about August 2015 to in or about January 2016, in the Southern District of Texas and elsewhere within the jurisdiction of the Court, the exact dates being unknown to the Grand Jury, defendant, OMAR ESPERICUETA did knowingly and willfully execute or attempt to execute a scheme or arti?ce to defraud the health care bene?t program known as BCBS, or to obtain by false or fraudulent pretenses, 4 Case 7:17-cr-0114O Document 1 Filed in TXSD on 07/18/17 Page 5 of 9 representations, or promises, any of the money or property owned by, or under the custody or control of the health care bene?t program known as BCBS, in connection with the delivery of, or payment for, health care bene?ts, items, or services. The defendant submitted, and aided, abetted, counseled, commanded, induced, procured or otherwise facilitated and caused others or attempted to cause others to submit, false and fraudulent claims to BCBS: Count Patient Patient Date Claim Amount Billed Reason Claim was Fraudulent Initials Birth Year Submitted (on or about) Fraudulent prescription, patient never saw a doctor, patient did not 2 1966 9/4/15 $2?758?28 receive pain patches billed to BCBS. Fraudulent prescription, patient 3 1.6. 1960 9/18/15 $2,758.28 received pain patches before seeing a doctor. Fraudulent prescription, patient 4 P.M. 1966 9/23/15 $2,758.28 never saw a doctor. Fraudulent prescription, patient 5 JR. 1957 9/18/15 $2,758.28 received pain patches before seeing a doctor. Fraudulent prescription, patient 6 CO. 1982 8/20/15 $2,758.28 did not receive pain patches billed to BCBS. Fraudulent prescription, patient 7 R.Y. 1969 8/25/15 $2,758.28 did not receive pain patches billed to BCBS. Fraudulent prescription, patient 8 CS. 1988 8/27/15 $2,758.28 did not receive pain patches billed to BCBS. All in violation of Title 18, United States Code, Sections 1347 and 2. 13. The Grand Jury incorporates by reference paragraphs 1 through 6 and paragraph 10 COUNTS NINE THROUGH TWELVE AGGRAVATED IDENTITY THEFT (18 .S.C. 1028A) as though fully restated and re?alleged herein. Case 7:17-cr-0114O Document 1 Filed in TXSD on 07/18/17 Page 6 of 9 14. From in or about August 2015 to in or about January 2016, in the Southern District of Texas and elsewhere within the jurisdiction of the Court, the exact dates being unknown to the Grand Jury, defendant, OMAR ESPERICUETA during and in relation to a felony Violation of Title 18, United States Code, Section 1347, Health Care Fraud, did knowingly transfer, possess, or use or cause others to transfer, possess, or use, without lawful authority, a means of identification of another person: Count Patient Patient Date Claim Means of Used Without Initials Birth Submitted Lawful Authority Year (on or about) Patient?s name, date of birth, and 9 MA- 1966 9/4/15 insurance identification numbers 10 co. 1982 8/20/15 Patlent 8 name? date; of birth, and insurance 1dent1f1cat10n numbers 1] R.Y. 1969 8/25/15 Fatient 3 name, date of birth, and insurance 1dent1ficat10n numbers 12 CS. 1988 8/27/15 Patient 3 name, date of birth, and insurance identi?cation numbers All in Violation of Title 18, United States Codes, Sections 1028A and 2. COUNTS THIRTEEN AND FOURTEEN HEALTH CARE FRAUD (18 U.S.C. 1347) 15. The Grand Jury incorporates by reference paragraphs 1 through 6 and paragraph 10 as though fully restated and re?alleged herein. 16. From in or about August 2015 to in or about January 2016, in the Southern District of Texas and elsewhere within the jurisdiction of the Court, the exact dates being unknown to the Grand Jury, defendants, Case 7:17-cr-01140 Document 1 Filed in TXSD on 07/18/17 Page 7 of 9 OMAR ESPERICUETA and OSCAR ELIZONDO did knowingly and willfully execute or attempt to execute a scheme or arti?ce to defraud the health care bene?t program known as BCBS, or to obtain by false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of the health care benefit program known as BCBS, in connection with the delivery of, or payment for, health care bene?ts, items, or services. The defendants submitted, and aided, abetted, counseled, commanded, induced, procured or otherwise facilitated and caused others or attempted to cause others to submit, false and fraudulent claims to BCBS, for: Count Patient Patient Date Claim Amount Billed Reason Claim was Fraudulent Initials Birth Year Submitted (on or about) Fraudulent prescription, patient never saw a doctor, patient refused 13 D.G. 1965 8/18/15 $2,758.28 pain patches, patient did not authorize submission of claim to BCBS. Fraudulent prescription, patient never saw a doctor, patient did not receive pain patches billed to BCBS. 14 F.V. 1975 8/27/15 $2,758.28 All in violation of Title 18, United States Code, Sections 1347 and 2. COUNTS FIFTEEN AND SIXTEEN AGGRAVATED IDENTITY THEFT (19 SC. 1028A) 17. The Grand Jury incorporates by reference paragraphs 1 through 6 and paragraph 10 as though fully restated and re?alleged herein. 18. From in or about August 2015 to in or about January 2016, in the Southern District of Texas and elsewhere within the jurisdiction of the Court, the exact dates being unknown to the Grand Jury, defendants, Case 7:17-cr-0114O Document 1 Filed in TXSD on 07/18/17 Page 8 of 9 OMAR ESPERICUETA and OSCAR ELIZONDO during and in relation to a felony Violation of Title 18, United States Code, Section 1347, Health Care Fraud, did knowingly transfer, possess, or use or cause others to transfer, possess, or use, without lawful authority, a means of identi?cation of another person: Count Patient Patient Date Claim Means of ID Used Without Initials Birth Submitted Lawful Authority Year (on or about) 15 DC. 1965 8/18/15 Patient 3 name, date of birth, and insurance identi?cation numbers Patient?s name, date of birth, and 16 1975 8/27/15 insurance identification numbers All in violation of Title 18, United States Codes, Sections 1028A and 2. NOTICE OF FORFEITURE (18 U.S.C. 982(a)(7)) l9. Pursuant to Title 18, United States Code, Section 982(a)(7), as a result of the criminal offenses charged in Counts 1 through 8, 16 and 17 of this Indictment, the United States of America gives the defendants, OMAR ESPERICUETA and OSCAR ELIZONDO notice that upon the conviction for a health care offense, all property, real or personal, which constitutes or is derived, directly or indirectly, from gross proceeds traceable to such offense, is subject to forfeiture. Case 7:17-cr-0114O Document 1 Filed in TXSD on 07/18/17 Page 9 of 9 Money Judgment 20. The defendants are noti?ed that upon conviction, 3 money judgment may be imposed equal to the total value of the property subject to forfeiture, which is in the amount of at least $1,488,569, the amount paid by BCBS based on the fraudulent claims. Substitute Assets 21. The defendants are noti?ed that in the event that property subject to forfeiture, as a result of any act or omission of a defendant, (A) cannot be located upon the exercise of due diligence; (B) has been transferred or sold to, or deposited with, a third party; (C) has been placed beyond the jurisdiction of the court; (D) has been substantially diminished in value; or (E) has been commingled with other property that cannot be divided Without dif?culty, the United States will seek to forfeit any other property of the defendants up to the total value of the property subject to forfeiture, pursuant to Title 21, United States Code, Section 853(p), incorporated by reference in Title 18, United States Code, Section 982(b)(1). A TRUE BILL FOREPERSON ABE MARTINEZ ACTING UNITED STATES ATTORNEY ANDREW R. SWARTZU ASSISTANT UNITED STATES ATTORNEY