Clifford Carroll of Boca Raton, Florida, was arrested on Thursday for his alleged involvement as the ringleader of a group that defrauded over $175 million from medical insurance companies. Carroll, 36, and 16 other residents and medical professionals of Broward and Palm Beach counties allegedly prepared and sold specialty prescription creams to patients at inflated prices.
Carroll faces charges for filing a false income tax return and racketeering conspiracy. Seven other suspects—Tim Clinton, Lisa Goldberg, Todd Hanson, Joel McDermott, Todd Stephens, Joel McDermott, and Michael Kenna—face charges for conspiracy to commit money laundering.
The remaining nine—Ian Flaster, Dr. John Johnson, William Earl, Rhett Gordon, Frederick Giampa, Brett Nadel, Christopher Mucha, Kyle O’Brien, and Peter Williams—are being charged with conspiracy to commit wire fraud and mail fraud. News sources did not name attorneys for any of the defendants.
According to the criminal complaint, the defendants operated their purported fraud scheme through several companies headquartered in Boca Raton with two pharmacies based in Texas and Nevada. Carroll and his co-conspirators reportedly paid out illegal kickbacks to corrupt medical professionals who issued prescriptions for their overpriced compounded prescription creams. Some doctors even allegedly provided pre-printed prescription pads to facilitate preparing fake prescriptions.
Prosecutors claim the group used telemarketing call centers and other mass marketing techniques to falsely convince patients to ask doctors for their tailor-made prescription creams that reportedly cured aches, pains, and other specific individual patient needs. In the process, the patients would unwittingly help the defendants to defraud millions of dollars from several insurance companies including the U.S. Department of Defense’s healthcare program, Tricare, which insures members of the military and their families. In some cases, the named defendants received payments as high as $31,000 for one tube of the cream.
If convicted, Carroll faces a maximum fine of $500,000 and up to 23 years in federal prison. His co-conspirators also face fines and between five to 10 years in federal prison. Prosecutors from the U.S. Attorney’s Office want any cash seized by investigators as well as business and residential properties linked to the fraud scheme to be forfeited.