A Dallas pharmacy executive has pleaded guilty to taking part in a massive kickback scheme that scammed the military's insurance program out of more than $100 million, authorities said.

Andrew Joseph Baumiller, 38, of Dallas, pleaded guilty last week to conspiracy to commit health care fraud in connection with Trilogy Pharmacy. He faces up to 10 years in federal prison and a maximum fine of $250,000.

Baumiller also will be ordered to pay restitution, the U.S. attorney's office said. His sentencing is scheduled for February.

Baumiller admitted to conspiring with doctors, marketers and other pharmacies to defraud Tricare, the military health care system, out of more than $50 million from May 2014 through February 2016, court records show.

The defendants paid kickbacks to physicians for prescribing soldiers expensive and unnecessary compounded pain creams, scar creams and vitamin supplements, court records show. Prosecutors say the pharmacy owners paid kickbacks to their marketers to drum up business. Tricare picked up the tab for the medications.

The Trilogy case was one of the first federal indictments in Texas in connection with the government's nationwide crackdown on compounding pharmacies and their illegal kickback operations. Similar prosecutions across the U.S. have resulted in numerous convictions, and many others are underway.

Tricare stopped paying for compounded pain creams in 2015 due to high costs and questions about the effectiveness of the medications.

Baumiller, the president of Trilogy who oversaw its day-to-day operations, is the first defendant to plead guilty in the Dallas case.

Also charged in the case are: Walter Neil Simmons, an Arizona physician; William F. Elder-Quintana, an El Paso physician; Jeffrey Eugene Fuller of Dallas; Richard Robert Cesario of Plano; John Paul Cooper of Southlake; Jeffry Dobbs Cockerell of Houston; Steven Bernard Kuper of Burleson; Ravi Morisetty of Irving; Joe Larry Straw of Frisco; Luis Rafael Rios of Killeen; and Michael John Kiselak of Southlake.

Fuller was Trilogy's owner. He and Baumiller are a couple. They have remained in custody since their October 2016 arrests after a federal judge deemed them to be flight risks. The pharmacy appears to have closed.

Fuller's attorney said he had no comment about Baumiller's plea deal.

Bogus health study

Fuller and Baumiller opened Trilogy Pharmacy in 2010.

Cesario and Cooper ran CMG RX, a Dallas company that primarily marketed compounded pain and scar creams to current and former U.S. military members and their families on behalf of various compounding pharmacies, officials said.

Cesario and Cooper signed marketing agreements with the compounding pharmacies in which the pharmacies agreed to pay them a percentage of their revenue from Tricare claims, the indictment said.

Tricare provides health coverage for active-duty and retired members of the military and their families. The federal insurance program covers certain prescription drugs, including compounded drugs prescribed by physicians.

Jeffrey Fuller

CMG RX's top marketing tool was a "sham medical study" in which soldiers were paid for getting compounded drugs, including migraine creams and vitamins, through their Tricare prescription benefits, the indictment said.

The study supposedly was done to evaluate the safety and efficacy of compounded drugs.

"Baumiller knew, however, that the study was a sham and was simply a pretext for paying kickbacks to incentivize doctors to write the prescriptions," his plea agreement said.

The defendants used the fake study to compile a list of Tricare beneficiaries with prescriptions so that the defendants could calculate how much to pay them, authorities say.

Straw and Kiselak led marketing groups for CMG RX that recruited military members and their families for the alleged study, authorities said.

Rios, a marketer and patient recruiter for Straw's group, recruited hundreds of soldiers at and near Fort Hood in Killeen, according to the indictment.

Simmons served as CMG RX's chief medical officer, and he helped Cesario and Cooper create the study, prosecutors say.

Fake charity

Cesario and Cooper created a phony charity called the Freedom From Pain Foundation to disguise the source of the kickbacks to doctors and patients, authorities say.

Cesario and Cooper paid doctors $60 for each compounded pain or scar cream prescription they wrote, the indictment said.

The prescribing physicians who received kickbacks typically did not have a doctor-patient relationship with the Tricare beneficiaries, according to prosecutors.

Fort Hood soldiers were recruited and paid to request prescriptions for unneeded compound pain creams from Trilogy Pharmacy in Dallas, federal prosecutors allege. (Jack Plunkett / The Associated Press)

Elder-Quintana, for example, wrote thousands of prescriptions for compounded drugs to people he never met, the indictment said. He conducted "only a cursory consultation" with them by phone, court records show.

Trilogy Pharmacy paid Cesario, Cooper, Straw, Rios, Kiselak and other CMG RX employees kickbacks for sending prescriptions to the pharmacy, according to the indictment.

The kickbacks were disguised as employee wages.

Three other North Texas compounding pharmacies are also accused of paying kickbacks for prescriptions: 360 Pharmacy Services in Webster, Dandy Drug in Burleson and Alpha Pharmacy in Irving.

Trilogy sometimes filled prescriptions for people who lived in other states where the pharmacy was not licensed, prosecutors said.

To get around that, Baumiller and others shipped the medications to a local courier, marketing rep or relative, who mailed them to the patients, court records said.

"This fraudulent practice enabled Trilogy to increase the number of claims it could submit to Tricare," according to Baumiller's plea agreement.