Two more indicted in $51M ‘free cellphone’ Medicare fraud conspiracy

Federal prosecutors in Florida have issued more indictments over an alleged $51 million Medicare fraud conspiracy said to have involved illegal kickbacks, money laundering, the submission of false reimbursement claims.

Charlie Bernard Griffin III, the president of First Coast Community Development— a social services nonprofit in Jacksonville—was indicted on 31 counts on Oct. 29 for his role in the alleged scam, which prosecutors said involved collecting personal information on Medicare beneficiaries, then using that data to bill the government program for unnecessary services.

The indictment is linked to a scheme involving a marketing company that lured in patients with free cellphone offers as a pretense to get the private details necessary to then bill Medicare for HIV prophylactic medications, used to prevent HIV infection after potential exposure.

Back in March, the owner of the unnamed marketing firm, Jonathan Simeon Gholston, pleaded guilty to participating in the conspiracy. At the time, the U.S. Department of Justice (DOJ) wrote in a statement that the Medicare beneficiaries were unwitting participants who did not need the HIV drugs.

The agency went on to allege that 20,316 fraudulent claims were submitted to government healthcare programs—including Medicare and Medicaid—during the course of the scheme, resulting in over $24 million in fraudulent payouts.

Gholston earned almost $2.3 million for his role, money which he will now forfeit to the federal government as part of a plea agreement.

As for Griffin, the indictment alleges First Coast Community Development, which operates a pharmacy for the purposes of providing drug addiction recovery services, filled the HIV prescriptions, sending $200 in kickbacks to Gholston’s firm for each referral.

Ultimately, it was the pharmacy that submitted claims to Medicare and Medicaid, billing for over $51 million in reimbursement, prosecutors wrote in the court filing.