Criminal Investigative Updates

Zachary Hess Dawson, an inmate at the Mount Olive Correctional Complex in Valley, West Virginia, pleaded guilty to theft of public money. Dawson admitted to fraudulently obtaining more than $300,000 in VA benefits. As part of his guilty plea, Dawson admitted that he falsely claimed that he had post-traumatic stress disorder resulting from his US Army service in Afghanistan. The VA OIG investigated this case. 

Perry Patalano, of Augusta, Georgia, was indicted on charges of aggravated identity theft, healthcare fraud, and theft of government money, property, or records. The VA OIG investigated this case.

Steve Michael Kelley, a former nurse at the Minneapolis VA Medical Center in Minnesota, was indicted on one count of obtaining controlled substances by misrepresentation, fraud, forgery, deception, or subterfuge. Kelley allegedly wrongfully obtained the controlled substance hydromorphone. The VA OIG, the VA Police, the Food and Drug Administration Office of Criminal Investigations, and the Drug Enforcement Administration investigated this case.

Tronown Thomas, of Spring, Texas, has been convicted of conspiracy to pay healthcare kickbacks. Thomas, a licensed pharmacist, owned and operated Rayford ACP Pharmacy, and paid over $2 million in kickbacks to the owner of a Houston clinic in exchange for referrals of patients who had been prescribed high-reimbursement compounded medications. Thomas subsequently billed VA and the Department of Labor’s Office of Workers’ Compensation Programs for the prescriptions. The VA OIG, Department of Labor OIG, US Postal Service OIG, FBI, and Department of War Defense Criminal Investigative Service investigated this case.

Veloxis Pharmaceuticals, Inc. (Veloxis), a drug manufacturer based in Cary, North Carolina, has agreed to pay over $46 million to resolve criminal and civil allegations that it paid kickbacks to induce prescriptions and purchases of Envarsus XR (Envarsus), the company’s kidney transplant immunosuppression drug. The investigation revealed that Veloxis conspired to commit violations of the federal Anti-Kickback Statute by paying for lavish meals, alcohol, and luxury resort stays, to induce healthcare professionals to recommend or prescribe Envarsus. This is the largest Sunshine Act recovery since the law was passed in 2010. The VA OIG, FBI, Department of Health and Human Services OIG, Defense Criminal Investigative Service, Office of Personnel Management OIG, and US Postal Inspection Service investigated this case.