Jacksonville Pharmacy Owner and Accountant Indicted in $51 Million Health Care Fraud Scheme

Jacksonville, Florida - Charlie Bernard Griffin III (61, Jacksonville) has been charged in a 31-count federal indictment with health care fraud and money laundering. Ethelbert Chinenye Nwanegbo (47, St. Johns) has been charged in the same indictment with money laundering. Each faces a maximum penalty of 20 years in prison on each count. U.S. Attorney Gregory W. Kehoe made the announcement.

The indictment notifies Griffin that the United States is seeking an order of forfeiture in the amount of $14,245,474, representing Griffin's proceeds from the health care fraud, and an order of forfeiture in the amount of $17,807,628.14, representing the property involved in the money laundering offenses with which he is charged. The indictment also notifies Griffin that the United States is seeking forfeiture of a total of $8,182,800.17 that was seized from Griffin's bank accounts, along with three real properties and four vehicles Griffin purchased with fraud proceeds.

The indictment notifies Nwanegbo that the United States is seeking an order of forfeiture in the amount of $6,068,540.50, representing the property involved in the money laundering offenses with which he is charged.

According to the indictment, Griffin owned First Coast Community Development (FCCD), which operated a pharmacy in Jacksonville. Griffin entered into an agreement with a marketing company owned by Jonathan Gholston pursuant to which the company referred people to FCCD for the provision of HIV post-exposure prophylactic medications. Representatives of the marketing company set up tents and tables in Jacksonville, generally in low-income areas, and offered to provide free, government-sponsored cellphones to anyone who stopped and agreed to provide identifying information. As a result of the marketing company's agreement with FCCD, while obtaining the personal information necessary for the person to receive the free cellphone, the marketing representatives also obtained health insurance information, including whether the person was covered by Medicare, Medicaid, or a private insurer.

The agreement provided that FCCD would pay the marketing company $200 for every person who was referred for HIV medications, but that FCCD would pay this amount only if a claim submitted on behalf of the person was paid by Medicare, Medicaid, or a private insurance company. The marketing company paid its representatives a set amount, usually $50, for every person who was referred to FCCD for HIV medications, but it paid this amount only if a claim submitted on behalf of the person was paid. A marketer's being paid per referral based upon whether a claim is paid is an illegal kickback.

The information gathered by the marketing representatives was sent to FCCD and its pharmacist, Albert Chester. FCCD used the information to generate prescriptions for HIV medications that were authorized by Rashan Jones, a nurse practitioner who had never seen, spoken with, or performed any manner of evaluation, examination, or test on the persons for whom the prescriptions were issued. To ensure that FCCD's claims for the prescriptions were paid, FCCD falsely and fraudulently used a diagnosis code reflecting that the persons to whom the prescriptions were issued had, or had been exposed to, HIV or a sexually transmitted disease, a false diagnosis that was documented in the medical records of the persons who were issued the prescriptions. FCCD filled the prescriptions, submitted claims to Medicare, Medicaid, or private insurers for the medications, and, if the claims were paid, was reimbursed for the medications.

The actions of Griffin and his co-conspirators caused the submission of tens of thousands of fraudulent claims, resulting in reimbursements from Medicare, Medicaid, and private insurers totaling approximately $51 million. Griffin received a total of approximately $14 million in proceeds as a result of his involvement in the offense.

Gholston, Chester, and Jones were previously charged separately and each of them agreed to plead guilty.

Nwanegbo was an accountant in Jacksonville. After Griffin and a co-conspirator received proceeds of the health care fraud scheme, they transferred and deposited proceeds into accounts controlled by Nwanegbo. For some of the proceeds, Nwanegbo transferred the funds from those accounts to other accounts he controlled. Nwanegbo then returned the proceeds to Griffin and the co-conspirator by transferring and depositing the proceeds into other accounts controlled by Griffin and the co-conspirator and by making cash payments to them, after retaining a money laundering fee of approximately 10%.

This case is being investigated by the U.S. Department of Health and Human Services - Office of Inspector General and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Arnold B. Corsmeier. The forfeiture is being handled by Assistant United States Attorney Clint Locke.

On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division ("Fraud Division"). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department's work to combat fraud supports President Trump's Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.