The U.S. Food and Drug Administration's (FDA) Office of Criminal Investigation (OCI) has announced that Martin J. Bradley III and Martin J. Bradley, Jr., officers of Bio-Med Plus, a Florida pharmaceutical wholesale distributor, were convicted on March 29, 2006, of more than two hundred and forty-seven criminal counts as the result of an extensive OCI investigation of an illegal medical products diversion scheme which defrauded the Medicaid and Medicare programs of more than $45,000,000.
The criminal counts on which the Bradleys were convicted included wire fraud, money laundering, conspiracy, and racketeering. Albert Tellechea, president of Infustat Inc., was also convicted of conspiracy to commit wire fraud and for paying kickbacks to health care providers.
The OCI investigation uncovered various illegal schemes in which the defendants bought and sold millions of dollars of illegally obtained medications, primarily blood derivative drugs, which are used in the treatment of AIDS, cancer, hemophilia, and other ailments.
"This type of illicit diversion not only defrauds and deceives the unsuspecting public, but also presents potential health risks to patients who rely on these critical medications for their treatment," said Margaret O'K. Glavin, Associate Commissioner for Regulatory Affairs. "Thanks to the aggressive work of our Office of Criminal Investigations, FDA was able to halt these greedy and unlawful actions, which endangered the public health by subverting the integrity of the legitimate pharmaceutical distribution system."
One of the uncovered schemes involved the payment of kickbacks to physicians who wrote fake prescriptions for injectable blood-based medicines, many of which cost thousands of dollars per treatment. These prescriptions were subsequently submitted for payment to Florida and California Medicaid and Medicare programs and the medications diverted to Bio-Med Plus Inc., where they where then sold in the open pharmaceutical wholesale market.
The convictions followed a six-week jury trial in the Southern District of Georgia, under the direction of Lisa Godbey Wood, United States Attorney for the Southern District of Georgia.
The Bradleys face significant penalties, including incarceration, fines, and restitution. The government is seeking asset forfeiture of over $39,000,000 of assets owned by the Bradleys and Bio-Med Plus. Sentencing will take place at a later date. The Bradleys started Bio-Med Plus, Inc., in 1995, and the company quickly grew to be the fourth largest wholesaler of blood-based drug products in the country, with annual sales of more than $200 million, mostly to hospitals.
This case was prosecuted by the United States Attorneys Office for the Southern District of Georgia in conjunction with the Internal Revenue Service -- Criminal Investigation Division, the U.S. Immigration and Customs Enforcement, and that State of Florida Attorney General's Medicaid Fraud Control Unit, along with the FDA.