A compounding pharmacy creates tailored drugs for individual patients who cannot be treated with traditional drugs due to allergies or other special needs. The Food and Drug Administration does not approve compounded drugs. While investigators found no evidence that any of the patients who received compounded drugs in this case suffered any dangerous side effects from them, the FDA warns that unnecessary use of compounded drugs can pose risks for patients.

As the scam evolved, the conspirators bought lists of information on patients with generous private insurance, Medicare, or TRICARE. They then sent their creams and other drugs to those patients with or without the patients’ knowledge or consent and without consulting their physicians.

“The main thing is there was never any patient necessity here,” said Special Agent Kurt McKenzie, who worked the case out of the FBI’s Miami Division. “The patients never asked for it; they didn’t need it. In many cases, the patients would send the creams back and say ‘I never asked for this.’”

The scheme went on for about four years, with the participants using various tactics to avoid detection, including purchasing additional pharmacies to use once an insurance company stopped paying for prescriptions at ones they were already using. The profits were significant—more than $100 million. Nicholas Borgesano, Jr., one of the ringleaders, made an estimated $80 million of that himself. Yet thanks to the investigative work of the FBI, the Department of Health and Human Services’ Office of Inspector General, and the Defense Criminal Investigative Service, the fraudsters were discovered and brought to justice. Traditional investigative techniques like following a complex money trail helped bring down the fraud ring.

All eight men involved in the scheme pleaded guilty to conspiracy to commit health care fraud. In April, Borgesano was sentenced to 15 years in prison. His seven co-conspirators have been sentenced to between one and six years.