ST. LOUIS – U.S. District Judge Henry Autrey has ruled for Express Scripts in a suit it filed against one of its former network pharmacies the company claims defrauded it of at least $2 million.
On Dec. 29, Autrey granted pharmacy benefit manager Express Scripts and co-plaintiff Medco Health Solutions' move objecting to Lifecare Pharmacy's motion to dismiss the federal court suit.
Lifecare's principals, Carlos Mazariegos and Benjamin Nundy, pleaded guilty in March in Florida to using their control of the company as part of a conspiracy to commit health care fraud against federal insurance benefit programs, the ruling states.
Express Scripts had conducted an internal investigation over suspected fraudulent claims submitted by Lifecare in 2014. After refusing to provide documentation, Lifecare reversed $1.3 million in claims already paid by Express Scripts, then closed its retail stores, stopped pharmacy operations and sold its locations to Walgreens, according to the ruling.
Months later, Express Scripts also learned of an additional $702,014.08 in uncontested discrepancies, placing the total amount owed to nearly $2 million. Per the agreement between the companies, Express Scripts was also entitled to recover an additional 15 percent of the value of claims, bringing the total owed to nearly $2.3 million.
The ruling also states that shortly after Express Scripts notified Lifecare of its default, Mazariegos and Nundy "embarked on a lavish and extravagant spending spree using, upon information and belief, Lifecare’s funds that were properly due and owing to Express Scripts.”
And, around the time Express Scripts and the federal government began investigations, Mazariegos purchased sports cars including a 2015 Lamborghini Huracan, a 2015 Ferrari 458 convertible, a Porsche 911 convertible, a 2015 Nissan GT-R, a Maserati Granturismo and a Ferrari 360 convertible. He also bought an $800,000 house in Florida, the ruling states.
"Mazariegos has acknowledged that these purchases were made using Lifecare assets, as they are subject to forfeiture as proceeds traceable to the commission of a federal health care offense," the ruling states.
In seeking to dismiss the suit, Lifecare had argued that plaintiffs failed to allege fraud with sufficient particularity, as required under federal court rules.
Autrey did not see it that way.
"The Court agrees with Plaintiff that it has set forth the who, what, where, when and how of each of the allegedly false claims," Autrey wrote.
"In its description of the fraudulent claims, Plaintiff details who took the actions and what actions were taken in attempting to defraud Plaintiff, the timeframe within which these actions were taken, where and how Defendants allegedly defrauded Plaintiff."