Leader Of Prescription Fraud Scheme Sentenced For Health Care Fraud HIPAA Violations And Aggravated Identify Theft

U.S. District Judge C. Lynwood Smith Jr. today sentenced Isaac Earl Smith, 38, of Pleasant Grove to six years in prison for his part in a prescription fraud scheme.

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.

Judge Smith also ordered Smith to pay $72,746 in restitution to FEHBP and to forfeit the same amount to the government as proceeds of illegal activity.

The U.S. Postal Inspection Service, the Food and Drug Administration, Office of Criminal Investigations, the U.S. Secret Service, the Office of Personnel Management, and the Montevallo Police Department investigated the case. Assistant U.S. Attorney Lloyd Peeples prosecuted the case.

Source: U.S. Attorney’s Office, Northern District of Alabama

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