United States v. Simpson

MEMORANDUM OPINION AND ORDER

SIM LAKE SENIOR UNITED STATES DISTRICT JUDGE

A grand jury charged Shalondria R. Simpson ("Defendant") in a thirteen-count Indictment.^[1] Pending before the court is Shalondria R. Simpson's Motion to Dismiss Counts 1 Through 8 of the Indictment ("Defendant's Motion to Dismiss") (Docket Entry No. 51) . For the reasons stated below, Defendant's Motion to Dismiss will be denied.

I. Background

On September 7, 2023, a grand jury in the Southern District of Texas returned a thirteen-count Indictment.^[2] The Indictment charges Defendant with Conspiracy to Defraud the United States and

Pay and Receive Health Care Kickbacks (Count 1), Conspiracy to Commit Health Care Fraud (Count 2), Payment of Health Care Kickbacks (Counts 3 through 7), Conspiracy to Commit Money Laundering (Count 8), and Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity (Counts 9 through 13) . ^[3]

The Indictment alleges that Defendant owned Texas pharmacies Advance Pharmacy, LLC ("Advance") and Eclectic Rx Consulting Inc. d/b/a TruCare Pharmacy ("TruCare") . ^[4] The Federal Employees Compensation Act ("FECA") pays workers' compensation benefits -including medical care and prescription drugs - to federal employees who suffer injury, disease, or death on the job.^[5]Advance and TruCare were enrolled as health care providers with the Department of Labor Office of Worker's Compensation ("DOL-OWCP"), which administers FECA. ^[6]

A. Count 1

Count 1 alleges that Defendant and codefendants Shayla Bryant and Lashondria Simpson-Camp, M.D., violated 18 U.S.C. § 371 by conspiring "to defraud the United States by impairing . . . through

deceitful and dishonest means, the lawful government functions of the DOL-OWCP in its administration and oversight of FECA[.]"^[7] Count 1 further alleges that the defendants conspired to violate 42 U.S.C. § 1320a-7b(b) (2) by offering and paying kickbacks in exchange for referring persons for items or services payable by FECA. ^[8] Count 1 describes the "Purpose of the Conspiracy" as:

unlawfully enrich[ing] and benefit[ing] [the defendants] through . . . (a) offering, paying, soliciting, and receiving kickbacks and bribes in exchange for the referral of prescriptions for high-reimbursing drugs; (b) submitting . claims to DOL-OWCP for prescription drugs that were induced by kickbacks and bribes and medically unnecessary; (c) concealing and disguising the payment and receipt of kickbacks and bribes, and the submission of false and fraudulent claims; and (d) diverting the proceeds of the conspiracy for [their] personal use,, . and to further the fraud.^[9]

Count 1 alleges the "Manner and Means of the Conspiracy" by incorporating paragraphs 20-50 of the Indictment,^[10] which allege in relevant part:

22. [Defendant and Bryant] used false and fraudulent means to maximize prescription-drug reimbursements from FECA [Defendant and Bryant] . . . identified high-reimbursing drugs by submitting "test claims" to DOL-OWCP to determine reimbursements for a given drug.

23. "Test claims" were false and fictitious claims that did not reflect an actual prescription . . . but rather were claims submitted for learning the reimbursements rates from FECA for certain drugs. After learning the reimbursement rate, [Defendant and Bryant] . . . used the reimbursement rate information to identify high-reimbursement drugs to fraudulently bill to FECA.

24. [Defendant and Bryant] . . . formulated high-reimbursing drugs, and created . . . pre-printed prescription pads listing these high-reimbursing drugs. These prescriptions . . . contained ingredients . . . selected based on the DOL-OWCP reimbursement-ascertained through "test claims"-not claimants' medical needs . . .

25. [Defendant and Bryant] . . . sent these pre-printed prescription pads, listing high-reimbursing drugs, to [prescribers] for them to issue prescriptions to claimants, often regardless of the claimants' medical need.

26. [Defendant and Bryant] instructed [prescribers] . . . which drugs to prescribe to claimants.

27. [Defendant and Bryant] . . . submitted claims to DOL-OWCP for prescriptions that were not dispensed or that were not dispensed as billed.

28. Between in or around January 2016, and May 2022, Advance and TruCare billed FECA approximately $170 million for prescription drugs. FECA paid Advance and TruCare approximately $53 million on those claims.^[11]

The Indictment alleges that Defendant paid kickbacks to induce prescribers to refer prescriptions to Advance and TruCare:

29. As part of the scheme, [Defendant and Bryant] offered and paid [prescribers] in exchange for the referral of prescriptions, billable to FECA, to Advance and TruCare.

30. To induce [Simpson-Camp] to refer prescriptions . . . to Advance and TruCare, [Defendant]. . . paid, $1.65 million in kickbacks and bribes to [Simpson -Camp], so that [Simpson-Camp] could purchase [a medical clinic, Accuhealth Injury & Wellness ("Accuhealth"-] with the

understanding that, in exchange for these kickbacks and bribes, [Simpson-Camp] would refer prescriptions payable by FECA to Advance and TruCare.

32. After acquiring Accuhealth, [Simpson-Camp] changed, and caused others to change, Accuhealth's claimants' "Preferred Pharmacy" to TruCare, and referred prescriptions for high-reimbursing drugs, using pre-printed prescription pads, to TruCare and Advance in furtherance of the scheme.^[12]

The Indictment describes how Defendant allegedly paid kickbacks to two other specific prescribers, Griselda Adams and an unnamed "Medical Assistant l."^[13] With respect to Adams, the Indictment alleges:

34. Similarly, to induce Griselda Adams to refer . . . prescriptions for claimants to Advance and TruCare, [Defendant and Bryant] paid . . . kickbacks and bribes to Griselda Adams, often through shell companies.

35. Between in or around July 2016, and 2021, [Defendant] paid at least $2 million in kickbacks and bribes to Griselda Adams through shell companies, including Era Remodeling Corp and Taxx Corp, set up for Griselda Adams's benefit, in return for Griselda Adams's referral of prescriptions to Advance and TruCare . . .^[14]

The Indictment further alleges:

41. To induce other prescribers, known and unknown to the Grand Jury, to send prescriptions for claimants to Advance and TruCare, [Defendant] paid . . . kickbacks and bribes to other marketers, known and unknown to the Grand Jury, often in the form of cash she withdrew from the Advance Operating Account.^[15]

The Indictment alleges that Defendant engaged in transactions designed to disguise the scheme's proceeds:

45. Between in or around September 2016, and November 2016, [Defendant] issued checks involving proceeds of the scheme from the Advance Operating Account, made out to "Era Remodeling Corp," for a total of approximately $167,800, which represented kickbacks and bribes intended for Griselda Adams . . .

46. Between in or around October 2016, and August 2021, [Defendant] paid kickbacks and bribes in the form of checks involving proceeds of the scheme from the Advance Operating Account, made out to "Taxx Corp," for a total of approximately $1.8 million, intended for Griselda Adams . . .

47. [Defendant] . . . made the checks out to the shell companies rather than directly to Griselda Adams, to conceal and disguise the nature of the transactions.

48. Between in or around February 2 016, and March 2021, [Defendant] withdrew cash and issued counter checks to cash totaling more than $1 million that involved proceeds from the Advance Operating Account and -:he TruCare Operating Account.

49. [Defendant] used the cash to pay kickbacks and bribes to Griselda Adams, Medical Assistant 1, and others, known and unknown to the Grand Jury. These counter check and cash withdrawals were designed to conceal and disguise the nature of the transactions. . . .

50. After in or around May 2 022, when [Defendant] learned that law enforcement was investigating her conduct . . . she took steps to further conceal proceeds, including by converting proceeds to cash, transferring proceeds between and among accounts she owned or controlled, and soliciting other's help in liquidating assets and concealing her ownership and control of those assets.^[16]

Count 1 alleges that the defendants committed the following overt acts in furtherance of the conspiracy:

a. On or about October 8, 2016, [Defendant] paid $83,000 to Griselda Adams by check from the Advance Operating Account, made out to "Taxx Corp."

b. On or about March 8, 2018, [Defendant] paid $500,000 to [Simpson-Camp] by check from the Advance Operating Account, made out to "Tru Essence Cosmetic + Medical Spa."

c. On or about March 16, 2018, [Defendant] paid $1,150,000 to [Simpson-Camp] by check from the Advance Operating Account, made out to "Tru Essence Cosmetic Spa."

d. On or about June 1, 2018, [Bryant] sent [Defendant] an email with the subject line "Confidential Payments." The email contained a spreadsheet titled "Payments .xlsx,” which consisted of kickback calculations.

e. On or about November 12, 2019, [Simpson-Camp] sent an email to [Defendant] with the subject line "One other thing," including a message about prescription referrals from Accuhealth to TruCare and Advance, that stated: "I would like to see each month how much money is coming in on your end from the scripts we write. Let's face it, the amount may not be what you thought it was going to be when you bought the clinic, but it's more than what you would have coming