Vicksburg native Wade Walters, 53, entered a guilty plea on fraud and money-laundering charges Thursday in U.S. District Court in Hattiesburg.
Walters has been at the center of a wide-ranging investigation that has lasted more than five years and resulted in numerous indictments and convictions, including another Vicksburg native, Chad Barrett.
Walters and his numerous co-conspirators effectuated a scheme to defraud health care benefit programs, including the TRICARE program, in the amount of $287,659,569, with losses to a government health care program exceeding $20,000,000. Walters obtained over $40,000,000 in proceeds derived directly or indirectly from the fraud.
Walters pleaded guilty for his role to defraud TRICARE, the health care benefit program serving U.S. military, veterans and their respective family members, as well as private health care benefit programs, by paying kickbacks to practitioners and distributors for the prescribing and referring of fraudulent prescriptions for not medically necessary compounded medications that were ultimately dispensed by his pharmacies, as well as for his role in a scheme to launder the proceeds of the fraud scheme.
Walters, recently of Hattiesburg, Mississippi, was a co-owner of numerous compounding pharmacies and pharmaceutical distributors. He pleaded guilty to one count of conspiracy to commit health care fraud and conspiracy to commit money laundering before U.S. District Judge Keith Starrett of the Southern District of Mississippi. The defendant was remanded into custody following the plea hearing. Sentencing is scheduled for Oct. 28 before Judge Starrett.
As part of his guilty plea, Walters admitted that, between 2012 and 2016, he orchestrated a scheme to defraud TRICARE and other health care benefit programs by distributing compounded medications that were not medically necessary. As part of the scheme, Walters adjusted prescription formulas to ensure the highest reimbursement without regard to efficacy; solicited recruiters to procure prescriptions for high-margin compounded medications and paid those recruiters commissions based on the percentage of the reimbursements paid by pharmacy benefit managers and health care benefit programs, including commissions on claims reimbursed by TRICARE; solicited (and at times paying kickbacks to) practitioners to authorize prescriptions for high-margin compounded medications; routinely and systematically waived and/or reduced copayments to be paid by beneficiaries and members, including utilizing a purported copayment assistance program to falsely make it appears as if the pharmacies were collecting copayments.
Walters also admitted that he and others laundered the proceeds by engaging in monetary transactions in amounts of over $10,000 in proceeds from the fraud scheme, including transactions relating to his participation in a sham intellectual property scheme.
The FBI, IRS Criminal Investigation, Defense Criminal Investigative Service, and the Mississippi Bureau of Narcotics investigated the case with assistance from the U.S. Postal Service Office of Inspector General, Office of Personnel Management OIG and the Mississippi Attorney General’s Office. Trial attorneys Dustin M. Davis, Sara E. Porter, and Katherine E. Payerle of the Criminal Division’s Fraud Section, trial attorney Stephanie Williamson of the Criminal Division’s Money Laundering and Asset Recovery Section, and Assistant U.S. Attorney Kathlyn R. Van Buskirk of the Southern District of Mississippi are prosecuting the case.See a typo? Report it here.