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State of Connecticut Office of the Attorney General

10/25/2024 | Press release | Distributed by Public on 10/25/2024 14:40

Attorney General Tong Announces $39 Million Connecticut False Claims Act Judgment Against Assured Rx Pharmacy for Kickback Scheme Involving Retired State Employees

Press Releases

10/25/2024

Attorney General Tong Announces $39 Million Connecticut False Claims Act Judgment Against Assured Rx Pharmacy for Kickback Scheme Involving Retired State Employees

(Hartford, CT) - Attorney General William Tong today announced a Hartford Superior Court judge has found Florida-based pharmacy, Assured Rx, LLC liable for $39 million in treble damages and civil penalties under the Connecticut False Claims Act (CFCA) in a kickback scheme involving illegal payments to retired state employees for costly compound drug prescriptions.

The state alleged in the case first brought in 2018 that Assured Rx orchestrated a kickback-to-beneficiary scheme with retired Department of Correction employee Nicholas Maulucci and his ex-wife Lisette Martinez (formerly Maulucci), an employee at Assured's compounding division, to recruit and pay retired state employees to obtain costly compound drug prescriptions covered by the Connecticut State Employee and Retiree Pharmacy Benefit Plan. The taxpayer-funded Plan provides prescription drug benefits to enrolled state employees and eligible family members. The State amended the original complaint in 2020 to individually name Nitesh Patel, a licensed pharmacist, who was the sole owner of Assured Rx.

While the Court found Assured Rx liable as a corporate defendant, the Court did not find Patel individually liable.

Connecticut Superior Court Judge John B. Farley presided over the bench trial that occurred over seven days during January 2024. The Court reviewed the evidence consisting of 180 exhibits, the admitted deposition testimony of five witnesses, as well live testimony of seven witnesses including Patel, Maulucci, Martinez, and Christopher M. Murray, Patel's business partner who managed the compounding division of Assured Rx. Each played a major role in paying and receiving at least $2.6 million in kickbacks to Plan beneficiaries who arranged for their doctors to order expensive compound drugs, including topical scar creams and pain creams that cost state taxpayers almost $10 million in reimbursements between June 14, 2014, and September 8, 2015.

At trial, the State, represented by a team from the Office of the Attorney General and from Scott+Scott LLP, proved that Assured Rx, through Boots Rx, Inc., a pass-through entity also owned by Patel, paid illegal kickbacks in violation of Connecticut's anti-kickback statutes, the state's counterpart to the Federal Anti-Kickback Statute, to ex-spouses Maulucci and Martinez through the Mauluccis' company, NLM, LLC. The evidence and testimony showed that Assured Rx made the kickback payments for arranging for their prescribers to order Assured Rx compound drugs for themselves and their then minor child, and for recruiting other Pharmacy Benefit Plan members. The State also proved that Assured Rx was involved in a pyramid-like scheme where they paid the Mauluccis through Boots to recruit additional Plan beneficiaries - mostly retired state correction officers -- to arrange for prescriptions for themselves and their covered family members for Assured Rx's expensive compound drug creams. The kickback payments to NLM and to the state Plan beneficiaries whom the Mauluccis recruited were disguised as "marketing" payments even though there was no evidence or testimony presented at trial that the Mauluccis or the Pharmacy Benefit Plan beneficiaries disclosed to any prescribers that they were being paid to arrange for the Assured Rx compound drug creams to be ordered. When they submitted the Assured Rx compound drug claims for reimbursement to the Connecticut Pharmacy Benefit Plan, Assured Rx never disclosed to the Comptroller's Office or to CVS, its PBM, that the claims were induced by kickbacks. At trial, the Comptroller's Office's Director of the Healthcare Policy and Benefit Division, testified that that the Comptroller's Office would not have reimbursed Assured Rx for the expensive compound drugs through CVS had they known that the Assured Rx compound drug claims were induced by unlawful kickbacks.

"Assured Rx's kickback scheme was purposely calculated to and did extract millions of dollars in public funds that would never have been expended were it not for Assured Rx's scheme," Judge Farley wrote in his decision.

"This is a major victory for Connecticut taxpayers," said Attorney General Tong. "These defendants orchestrated an elaborate kickback scheme that cost the state nearly $10 million dollars. This decision-imposing $39 million in treble damages as well as civil penalties-sends a clear message that this state does not tolerate abuse of public funds. I want to thank the entire trial team for their diligent, determined work in this case."

"Connecticut's taxpayers and state employees deserve a healthcare system that is transparent and fair, and this ruling underscores our state-wide commitment to rooting out fraudulent behavior and holding bad actors accountable," said Comptroller Sean Scanlon. "I commend Attorney General Tong and his team, as well as my predecessors former Comptroller Kevin Lembo and former Healthcare Policy and Benefits Division Director Tom Woodruff, for their diligent work to stop this abuse and to deliver justice for Connecticut taxpayers."

Assistant Attorneys General Karla Turekian, Eric Babbs, and Christine Miller, Forensic Fraud Examiner Thomas Martin, Legal Investigator Timothy Edwards, and Paralegal Orlean Woodham, working under the supervision of Deputy Associate Attorney General Gregory O'Connell, Chief of the Government Fraud Section, assisted the Attorney General in this matter. Josh Wojcik, Division Director, Healthcare Policy and Benefit Services Division, Lara Manzione, Division Counsel, Healthcare Policy and Benefit Services Division, and Yam Menon, General Counsel and Assistant State Comptroller in the Office of the State Comptroller also assisted.
Twitter: @AGWilliamTongFacebook: CT Attorney General