CEO and CFO Will Face Time in Prison Following Massive Pharmaceutical Scheme Resulting in Millions of Stolen Funds
Guaranteed Returns, a reverse pharmaceutical distributor, and the company’s senior management have been convicted in trial following allegations of wire fraud, mail fraud, obstruction of justice, theft of government property, money laundering, and false statements as part of a massive pharmaceutical scheme.
Dean Volkes, the company’s CEO and sole owner, operated the reverse pharmaceutical distributor, which was responsible for returning expired prescriptions to various healthcare providers. These providers included hospitals, pharmacies, and even facilities owned by the Department of Defense, which allow certain prescriptions to be returned for a refund. Guaranteed Returns handled the return process on behalf of the healthcare providers’ clients, requiring a fee determined by each drugs’ refund value.
However, Volkes instead mislead the company’s clients by informing them that they would hold their prescriptions until they were expired and then return them for reimbursement on their behalf, but in reality the drugs were returned to manufacturers and the refund amount was kept in full by the company.
Under the direction of Volkes, the company was able to defraud over 13,000 clients for a total of $100 million. $20 million of these funds came directly from healthcare centers operated by the U.S. Department of Defense, as well as additional government agencies.
The pharmaceutical scheme continued as the company diverted a portion of the fraudulent reimbursement funds into numerous accounts with the intent to launder the money. Evidence gathered for the trial proved that the pharmaceutical scheme took place from 1999 through 2014.
Michael Harpster, Special Agent in Charge of the FBI in Philadelphia, commented on the case, “At each turn, these defendants’ guiding principle was greed,”. He added, “For years, they ripped off clients – among them, the U.S. government – to the tune of millions of dollars. They’re now being held accountable for their scheme, and for their brazen attempts to cover it up by obstructing justice. The FBI and our federal partners won’t stand for criminals stealing from the government and the taxpayers who fund it.”.
For their participation in the scheme, Volkes and Fallon will serve time in prison, and have each been ordered to pay millions in restitution fees. Volkes will also have to forfeit a total of $114,832,445.
This case was investigated by the Federal Bureau of Investigation, Defense Criminal Investigative Service, and is being prosecuted by Assistant United States Attorneys Nancy Rue and Patrick Murray.
To learn more about this case, or other instances of pharmaceutical and financial fraud, visit the Jeffrey Newman Law Whistleblower Help Center and blog!