U.S. Attorney Jacqueline Romero announced that two former pharmacy employees pled guilty, were sentenced and settled civil allegations as to Philadelphia-based Spivack Inc., previously operating under the name Verree Pharmacy. These two employees’ criminal and civil resolutions bring to an end the years-long investigation by the U.S. Attorney’s Office and its law enforcement partners as to opioid and fraud-related issues at Verree by its owner, Mitchell Spivack, and his employees. In addition to criminal convictions resulting in imprisonment, the settlements resulted in more than $4.1 million recovered and permanently ban the employees from ever dispensing controlled substances in the future.
Most recently, two former employees, Todd Goodman and Eric Pestrack, pled guilty to charges that they knowingly dispensed oxycodone without a valid prescription. The district court sentenced Goodman and Pestrack to four months and three months in prison, respectively. In addition to the criminal convictions, Goodman and Pestrack separately agreed to resolve civil allegations that they engaged in a years-long practice of illegally dispensing and distributing opioids and other controlled substances as well as systematic health care fraud by billing for drugs the pharmacy did not actually dispense to patients. In addition to paying the United States to resolve their exposure, the two committed to never dispense controlled substances in the future.
Goodman and Pestrack’s convictions come after owner-pharmacist Mitchell Spivack pled guilty and was sentenced to 42 months in prison for his role at Verree. Spivack pled guilty to having conspired with others to engage in health care fraud and illegally dispense the controlled substance oxycodone at Verree. Spivack also resolved the civil allegations against him through a court-approved consent judgment. Spivack and his business agreed to pay more than $4.1 million to resolve their civil liability under the Controlled Substances Act, False Claims Act and forfeiture. The judgment also permanently banned them from ever dispensing controlled substances in the future and imposed a 22-year exclusion on the pharmacy and Spivack from Medicare and Medicaid.
The culmination of a multi-year federal-state investigation, the previously filed civil complaint alleged that Verree, its owner Spivack and employees of Verree had a responsibility to dispense opioids and other controlled substances only when appropriate. Instead, the United States alleged that Verree and Spivack dispensed the drugs, even when faced with numerous red flags suggestive of diversion, such as opioids in extreme doses, dangerous combinations of opioids and other “cocktail” drugs preferred by those addicted, excessive cash payments for the drugs, blatantly forged prescriptions and other signs that the pills were being diverted for illegal purposes. The complaint alleged that Verree — which was the top retail pharmacy purchasing oxycodone in Pennsylvania — has been a nationwide and regional outlier in its deviant purchasing, dispensing and billing of controlled substances. To avoid scrutiny from the drug distributors that sold them the pills, Verree through Spivack allegedly made false statements to maintain the façade of legitimacy and keep the pharmacy stocked with these pills critical to their profits. Behind that façade, the complaint alleged that Spivack drew millions of dollars from the pharmacy.
The United States’ complaint alleged that Verree and Spivack were also engaged in an expansive health care fraud scheme involving fraudulent billings for drugs not actually dispensed. The alleged cornerstone of the scheme was a code used by the pharmacy employees in their internal computer system: “BBDF” or Bill But Don’t Fill. Verree, Spivack and their co-conspirators allegedly used BBDF as a means to cover their losses on other drugs and further line their pockets with illicit profits by falsely claiming to insurers, including Medicare, that they had dispensed a drug to a patient, when in fact they had not. According to the complaint, this sophisticated fraud — which one of the employees allegedly admitted to investigators — resulted in significant damages to Medicare and other federal programs.
“In a city that has been so adversely and disproportionately affected by the opioid epidemic, Verree Pharmacy was the top retail pharmacy purchasing oxycodone in the entire state of Pennsylvania,” said Thomas Hodnett, Special Agent in Charge of the Drug Enforcement Administration’s Philadelphia Field Division. “Spivack and the other employees at Verree routinely demonstrated total disregard for their professional and ethical obligations and improperly dispensed powerful painkillers when numerous warning signs were present.”
Verree Pharmacy, 7960 Verree Road, operated as a small neighborhood pharmacy for more than 30 years. ••
