South Florida Pill Mill Owner Sentenced to Prison for Role in $2.2 Million Medicare Fraud Scheme

The owner of a pain clinic and a pharmacy in South Florida was sentenced today to 78 months in prison followed by three years of supervised release for his role in a $2.2 million Medicare fraud scheme. 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement. 

Scott Novick, 51, of Hollywood, Florida, was sentenced by U.S. District Judge K. Michael Moore of the Southern District of Florida, who also ordered Novick to forfeit approximately $1.4 million.  Novick had previously pleaded guilty to one count of conspiracy to commit health care fraud.  As part of his plea agreement, Novick agreed to liquidate several financial accounts worth approximately $1,329,886, the proceeds of which were ordered at sentencing to be paid back to Medicare. 

According to admissions made as part of his plea agreement, Novick was the owner of American Pain Management, a pain clinic that had locations in Broward and Palm Beach County.  Novick also owned Pacific Pharmacy of Miami, Florida where the majority of the prescriptions written by American Pain Management were filled.   Novick admitted to submitting approximately $1.2 million in fraudulent claims to Medicare for pain management services purportedly rendered by a doctor who worked at American Pain Management that Novick knew were fraudulently submitted and not eligible for reimbursement.  Novick also admitted that in 2010, in response to legislation passed by the Florida Legislature prohibiting pain clinics from dispensing controlled substances directly from the clinic and other concerns about federal anti-kickback laws, he disguised his ownership of Pacific Pharmacy, falsely naming a relative  so that he could continue dispensing controlled substances. Novick admitted that he knew the doctor at American Pain Management was prescribing controlled substances at inappropriately high levels and that the drugs had not been prescribed for a legitimate medical purpose or in the usual course of professional practice. In fact, Novick knew the doctor would sign prescriptions for patients without conducting a visit with the patient.  Novick admitted he and his clinics received approximately $1.4 million in compensation for his participation in the conspiracy and submitted approximately $1.2 million in claims to  Medicare for the medical services rendered by the doctor that were fraudulently submitted and not eligible for reimbursement.  Pacific Pharmacy was also paid in excess of $1 million for the drugs, which were not eligible for reimbursement.

The FBI and HHS-OIG investigated the case which was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  The case was prosecuted by Trial Attorney Timothy P. Loper and Acting Assistant Chief Jacob Foster of the Fraud Section.

The Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.