BIRMINGHAM – A federal judge today sentenced a Pleasant Grove man to six years in prison for his part in a prescription fraud scheme, announced U.S. Attorney Joyce White Vance.
U.S. District Judge C. Lynwood Smith Jr. sentenced ISAAC EARL SMITH, 38, for crimes involving health care fraud, aggravated identity theft and disclosures prohibited by the Health Insurance Portability and Accountability Act (HIPAA). Smith pleaded guilty to the charges in November 2009. The judge ordered him to serve three years of supervised release after completing his prison term.
Between September 2008 and April 2009, Smith engaged in a criminal conspiracy to commit health care fraud that resulted in HIPAA violations and aggravated identity theft. During that time, according to court records, Smith and others accessed the personal information of individuals who had Flexible Spending Accounts administered by United Healthcare Inc. and were also covered by a prescription drug plan sponsored by the Federal Employees Health Benefit Plan. Smith and others used the information to create counterfeit prescriptions that were presented to pharmacies in order to illegally obtain controlled substances. Those drugs were then illegally sold to third parties. By using stolen identities on the prescriptions, Smith caused the federal employee’s prescription drug plan to pay for the controlled substances, resulting in a loss to FEHBP of $72,746.
“Not only did the people involved in this scheme illegally obtain and sell prescription drugs, they used stolen identities to cause insurance plans to bear the cost of these drugs, as if they had been issued for a legitimate purpose,” Vance said. “This office remains dedicated to prosecuting individuals who illegally distribute prescription drugs, as well as those who cause the fraudulent submission of insurance claims, which result in higher insurance premiums for us all.”
DOJ Press release: http://www.justice.gov/usao/aln/News/May%202011/May%2025,%202011%20Leader%20of%20Prescript.html
MIAOULIS NOTE: It is becoming clear that law enforcement is becoming more aware of the HIPAA criminal penalty and will enforce HIPAA.