A Hattiesburg, Mississippi man pleaded guilty today for his role in a $200 million compounding pharmacy scheme to defraud health care benefit programs, including TRICARE, which is the program that covers U.S. military service members and their families.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division; U.S. Attorney Mike Hurst of the Southern District of Mississippi; Special Agent in Charge Christopher Freeze of the FBI’s Jackson, Mississippi Field Office; Special Agent in Charge Thomas J. Holloman III of IRS Criminal Investigation’s (IRS-CI) Atlanta Field Office and Special Agent in Charge John F. Khin of the Defense Criminal Investigative Service’s (DCIS) Southeast Field Office made the announcement.

Glenn Doyle Beach Jr., 46, pleaded guilty to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering and tax evasion, before U.S. District Judge Keith Starrett of the Southern District of Mississippi. Beach was charged in May 2018 in a 26-count indictment and had been scheduled to begin trial today. He is scheduled to be sentenced on July 2, 2019.

“Glenn Doyle Beach and his co-conspirators stole hundreds of millions of dollars from federal health care programs, including TRICARE, which provides benefits to brave members of our military and their families,” said Assistant Attorney General Benczkowski. “The Criminal Division remains dedicated to rooting out and punishing this kind of misconduct, and to protecting America’s important health care programs from fraud and abuse.”

“While our men and women in uniform were defending the freedoms and values we hold dear, this defendant was selfishly stealing precious money and resources from their military healthcare system, TRICARE, to the detriment of us all,” said U.S. Attorney Hurst. “Our investigators and prosecutors are to be commended for their steely resolve in rooting out corruption and administering justice for victims. We will not stop until every last person involved in this criminal scheme has been brought to justice.”

“Fraud schemes of this magnitude disrupt the fabric of our health care system, ultimately damaging our nation's economy and costing taxpayers billions each year,” said FBI Special Agent in Charge Freeze. “Today's guilty plea brings this case one step closer to justice and proves that the collective resources of all partnering agencies will continue to expose these schemes and will actively seek justice for those who participate in them."

Beach was an owner and the managing member of Advantage Pharmacy of Hattiesburg. At the hearing today, Beach admitted his role in a scheme to defraud health care benefit programs, including TRICARE, by marketing medications known as compounded medications, which ordinarily are medications that are specially combined or formulated to meet the individual needs of patients. Beach admitted, however, that through Advantage Pharmacy of Hattiesburg, he formulated compounded medications without regard to the individual needs of the patients, but instead in order to increase reimbursements paid by health care benefit programs. Furthermore, Beach admittedly created a fictitious paper trail to mislead insurance auditors who attempted to uncover the fraud.

Beach further detailed a money laundering and tax evasion scheme that he and other co-conspirators used to conceal the fraudulent proceeds and evade taxes.

From approximately April 2012 through January 2016, health care benefit programs, including TRICARE, reimbursed Advantage Pharmacy and other pharmacies involved in the scheme at least $200 million, Beach admitted. The government seized more than $6 million in cash and other assets from Beach, which will be forfeited in connection with his guilty plea.

Since 2017, 11 other individuals involved in this scheme have pleaded guilty, and one was convicted at trial. The investigation is ongoing.

This case was investigated by the FBI, IRS-CI and DCIS, among other agencies. Trial Attorneys Kate Payerle and Jared Hasten of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mary Helen Wall of the Southern District of Mississippi and Sean Welsh of the Western District of Virginia, formerly of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS), are prosecuting the case, with the assistance of Trial Attorney Amanda Wick of MLARS.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and U.S. Department of Health and Human Services (HHS) to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. 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.