A marketer for two related Fort Worth pharmacies made “millions a month” by steering doctors to send expensive, and often fraudulent, prescriptions to those pharmacies, a co-owner of the pharmacies testified Wednesday.
The testimony by Scott Schuster, before a jury in the court of Dallas U.S. District Judge Karen Gren Scholer, came in the criminal trial of the marketer, Quintan Cockerell. Cockerell is accused of taking kickbacks to induce physicians to do business with Schuster’s two pharmacies, Rxpress Pharmacy and Xpress Compounding.
Both pharmacies specialized in formulating “compounded medicines,” custom-mixed and often exceedingly expensive prescription treatments for patients who, for one reason or another, cannot take mass-produced prescription drugs.
According to a federal indictment issued in December 2018 and updated in May 2020, Schuster and his co-owners in the Fort Worth pharmacies oversaw “a vast network of marketers,” including Cockerell, who were paid kickbacks for signing up doctors to write thousands of prescriptions for compounded medications.
The marketers lured some doctors into the enterprise, prosecutors said, by wining and dining them, taking them on lavish vacations via private jet and offering them opportunities to invest in the compound pharmacy business and related money-making entities.
Cockerell was one of the scheme’s top marketers, according to the government’s opening statement to the jury on Tuesday.
Chris Knox of Dallas, Cockerell’s defense attorney, said there’s no doubt that Rxpress Pharmacy and Xpress Compounding engaged in fraud — but that his client had nothing to do with it.
“Quentan Cockerell is not guilty,” Knox said in his opening statement. He said the government concocted “a very creative narrative” to implicate Cockerell in a criminal conspiracy his client had nothing to do with. Cockerell, he said, was a legitimate pharmaceutical sales representative who simply encouraged doctors to consider prescribing compounded medications that were “good stuff” prepared by pharmacists who were “doing a great job.”
“The government is trying to put a round peg into a square hole, and they know it,” Knox said.
In addition to Knox, Cockerell is represented at trial by Dallas attorney Shirley Baccus-Lobel.
The Justice Department’s prosecution is led by Jacqueline Zee DerOvanesian of Miramar, Florida, and Kate Payerle of Washington, D.C.
The superseding 2020 indictment said that from May 2014 to September 2016, the government paid $58.9 million on claims submitted by the Fort Worth pharmacies to two federal health insurance programs: TRICARE, which insures active and retired members of the armed services, their dependents and their survivors, and a program authorized under the Federal Employees’ Compensation Act (FECA) that pays workers’ compensation benefits for federal employees injured or killed on the job.
The “vast majority” of those claims, the indictment said, “were the product of illegal kickbacks and fraud.”
Cockrell was “part of the inner circle” at the corrupt pharmacies and knew the billings were fraudulent and the kickbacks illegal, said Schuster, a co-owner of Rxpress and Xpress Compounding, who was the first prosecution witness called Wednesday.
Schuster, who was indicted on fraud, conspiracy and money-laundering charges along with Cockerell and others, has entered into a plea agreement with the government and is cooperating in the prosecution of Cockerell, whom he characterized as, formerly at least, a friend.
His testimony Wednesday mirrored in many ways his testimony in July against Richard Hall, another of the pharmacies’ co-owners, who was convicted by a different jury in Judge Scholer’s court of paying kickbacks and conspiring to launder money.
Schuster said the Fort Worth pharmacies established a network of “marketers” whose duty was to bring in as many prescriptions as possible and who were paid kickbacks tied directly to the insurance billings their efforts yielded.
Schuster is represented by Richard Roper, a former U.S. attorney for the Northern District of Texas and now a partner with Holland & Knight in Dallas.
Schuster testified that the pharmacies and their marketers would invite prescribing doctors to costly, all-expenses-paid trips to the Caribbeans, Mexico, Las Vegas, Vancouver and other destinations “to keep them happy” so they would continue to writing prescriptions — whether the compounded medications were needed or not.
One such trip, on which Cockerell was a guest, Schuster said, was a weeklong excursion to the Bahamas aboard a 164-foot yacht that the hosts leased for $250,000.
One of the expenditures Cockerell made with the illegally obtained taxpayers’ funds he received, the indictment said, was the May 2015 purchase — with a check — of a $292,520.05 Lamborghini from Lamborghini of Dallas.