Three individuals from West Tennessee are accused of defrauding the federal government by charging $28.7 million for prescription drugs that were never actually dispensed. This was part of a broader initiative against healthcare fraud, which officials announced on Monday.
The indictment, filed on June 12, alleges that Medpartner, a health clinic based in Memphis, and the owner of Sargio Pharmacy aimed to treat injured U.S. Postal Service employees, billing the Federal Employee Compensation Act (FECA) for these costs.
However, it turns out that many of the prescribed medications weren’t provided to patients, and most were actually out of stock at the pharmacy. Out of 4,052 requests made by Sargio Pharmacy from August 2018 to August 2021, around 500 were for medications that were never created or could not be purchased.
The individuals charged include Cosy Ramon Simmons, 59, and Katina Mersey Simmons, 48, who were in charge of Sargio Pharmacy, alongside 47-year-old Tritia Margarizita Townsend from Memphis. Between August 2018 and December 2021, FECA paid about $16.3 million to the pharmacy.
The indictment states that “Cossie, Katina, and Townsend personally benefited from participating in the scheme by receiving fraudulent income for their personal use and benefits.” A total of 324 defendants are facing similar accusations as part of the U.S. Department of Justice’s National Health Care Fraud Takedown, according to interim U.S. attorney Joseph C. Murphy Jr. This operation targeted individuals across the country suspected of being involved in medical fraud and drug diversion schemes.
Details of the indictments in the scheme
Kossie Simmons allegedly controlled and managed MedPartners, a health clinic established in Memphis with a location in Little Rock, Arkansas, since 2016. Kossie also started managing Sargio Pharmacy in 2018, which operates in Memphis.
Katina Simmons owned 70% of both companies. The indictment also references an unnamed co-conspirator with a 30% stake. Notably, Kossie Simmons had previously pleaded guilty to healthcare fraud in 2007 and was barred from participating in federal healthcare programs for 25 years. Text messages revealed that Kossie expressed a desire to take advantage of experience gained from prior incidents.
Katina registered MedPartners as a billing entity for the FECA program in August 2016 and also registered the clinic as a physician’s office within the program in 2017, despite Kossie’s ban from federal healthcare participation.
Sargio Pharmacy officially opened in 2018 with Townsend as the only pharmacist, filling prescriptions for lidocaine and diclofenac—both used for pain relief.
The Tennessee Pharmacy Board launched an investigation into the pharmacy in September 2020, discovering claims for prescription drugs made without valid prescriptions. The nurse practitioners at MedPartners reportedly had a say in determining if patients were eligible for medications, but actual prescriptions were never provided by two doctors associated with the clinic.
A search warrant was executed in August 2021, during which 227 claims were filed, leading to an additional $1.1 million in payments.
Kossie and Katina Simmons face one count each of conspiracy and healthcare fraud, potentially resulting in up to 20 years in prison and fines of $250,000 if convicted. Additionally, they are charged with seven counts of healthcare fraud, each carrying a maximum sentence of 10 years and fines of $250,000. Townsend is facing charges related to conspiracy to commit wire fraud and healthcare fraud, as well as three counts of healthcare fraud.
