Legal Issues

CA Pharmacist Sentenced to 15 Years In Prison For $11 Million U.S. Military Scam

CA Pharmacist Sentenced to 15 Years In Prison For $11 Million U.S. Military Scam

An Orange County, California pharmacist has been sentenced to 15 years in prison for an $11 million U.S. military scam. 

Sandy Mai Trang Nguyen, a licensed pharmacist based in Irvine, will serve 180 months in federal prison for her part in a healthcare fraud scheme that resulted in over 1,000 bogus prescriptions for compounded medications being filled, purportedly for U.S. military members and their families. The scam cost, Tricare, the military's healthcare plan, upwards of $11 million in losses.

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Credit: Anchiy/Getty Images

An official release from the IRS notes that Nguyen was the head pharmacist at the now-defunct Irvine Wellness Pharmacy (IWP). Between late 2014 and May 2015, Nguyen and her staff filled approximately 1,150 compounded prescriptions for pain, scarring, and migraines, allegedly for military service-members and their dependents. Tricare, believing these were valid prescriptions, reimbursed for tens of thousands of dollars per prescription. The prescriptions were almost all sent to Nguyen and her team by "marketers" who were rewarded with approximately 50% of the Tricare reimbursement funds.

Compounded drugs are generally very expensive, custom-made prescriptions that doctors sometimes prescribe when FDA-approved mainstream medication does not meet the health needs of a patient. It is not uncommon for military members with PTSD and combat injuries to receive compounded drugs, which is why alarms were not initially raised at Tricare.

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Credit: SDI Productions/Getty Images

In addition, the Tricare accountholders were solicited to provide their insurance information, even though most never visited a doctor. The prescriptions were submitted electronically by the "marketers."

According to the IRS and court records, Nguyen knew that the prescriptions were written by physicians based in states other than where the Tricare beneficiaries lived, that multiple members of the same families received identical "custom" medications, and that the same prescriptions were given to people in wildly different demographics.

For example, a 13-year-old Chicago boy was prescribed the same compounded medication as an elderly Orange County woman who, oddly enough, was Nguyen's grandmother. 

In addition to her prison sentence, United States District Judge Otis D. Wright II also ordered Nguyen to pay $11,098,756 in restitution.

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Credit: Image Source/Getty Images

"At [Nguyen's] trial [in November 2022], the government proved that [she] knew that IWP was, essentially, a fraud factory that was churning out prescriptions solely to make a fast buck," prosecutors stated in a sentencing memorandum.

They went on, "She routinely ignored the numerous red flags that indicated that the prescriptions were fraudulent."

What do you think about this Tricare scam?

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Rebekah Barton

Rebekah Barton

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