A Tennessee couple at the helm of a prescription pharmacy scheme that defrauded the Pentagon's health program of more than $65 million and also ensnared service members will serve time and must pay back the federal government, the Justice Department announced Thursday.
Jimmy Collins, 59, and Ashley Collins, 37, of Birchwood, Tennessee, must pay $65,679,512.71 in restitution to the Defense Health Agency and Tricare. Jimmy Collins was sentenced to 10 years in prison -- the maximum he could have received for the charge of receipt of illegal remuneration -- while Ashley Collins will serve 18 months in home confinement for conspiracy.
From 2014 to May 2015, the Collinses ran a medical clinic that used a network of doctors and a nurse practitioner to recruit service members and other Tricare beneficiaries to receive specialty medications they didn't need in return for kickbacks.
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The prescriptions were then filled by a pharmacy in Bountiful, Utah, which billed Tricare at amounts of $10,000, and in some cases up to $20,000, per prescription -- enough for the Collinses to cover the cost of beneficiaries' copayments, provide payments to participants and spend lavishly on themselves.
According to the Justice Department, the Collinses used their taxpayer-funded wealth to finance a lavish lifestyle, purchasing an 82-foot yacht, two Aston Martins and other luxury vehicles, three pieces of real estate in Tennessee, gold and silver bars, and a multimillion-dollar investment annuity.
"Today, defendants who defrauded millions of tax dollars intended for the care of our nation's service members were held accountable for their crimes. Yachts and Aston Martins are a fantasy now, and prison is the reality," U.S. Attorney Tara McGrath said in a statement.
The Collinses are among hundreds of defendants pursued by the Justice Department in the largest case of medical fraud in the Pentagon's history.
In 2013, a number of pharmacy companies that make compounded medications -- personalized dosages or formulas normally crafted for patients who can't tolerate certain ingredients -- as well as unscrupulous physicians, clinic owners and others like the Collinses who teamed with pharmacists found they could produce medications such as pain and scar creams, wound ointments and erectile dysfunction drugs, and market them directly to Tricare patients via phone, advertising and mail without much interference.
The companies made thousands of dollars on each prescription, and the scheme became so widespread that the Defense Health Agency spent more than $1.5 billion on these prescriptions in the first half of 2015, causing a budget shortfall that year and prompting the Pentagon to restrict coverage of compounded medications.
The Justice Department then began pursuing those involved, as well as service members who got caught up in the scheme.
Among those who worked with the Collinses were Josh Morgan and Daniel Castro, two Marines who were stationed in Southern California at the time, and Kyle Adams, a former Navy sailor, according to court documents. The three worked as recruiters, finding Tricare beneficiaries to receive the medications and promising pay in return.
The Collinses made nearly $46 million in profit from the fraud and paid Morgan, Castro and Adams roughly 10% of the money. All three previously pleaded guilty for their participation.
"Tricare fraud is not a victimless crime; it is theft of taxpayer dollars that would be directly used in support of the health and readiness of our warfighters," said Special Agent-in-Charge Greg Gross of the Naval Criminal Investigative Service Economic Crimes Field Office in a press release.
The sentencing of Jimmy and Ashley Collins does not complete the case. A nurse practitioner who worked for them and several patient recruiters await sentencing, according to the Justice Department.
In fiscal 2022, the Justice Department paid the Defense Department $26.2 million in funds recouped as a result of health care fraud convictions.
