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11 area residents indicted for conspiracy to commit healthcare fraud

Maximum penalty for the conspiracy count and each count of money laundering is 10 years in federal prison

JACKSONVILLE, Fla. – Eleven people were indicted Friday on charges of conspiring to commit health care fraud, U.S. Attorney Maria Chapa Lopez announced.

The indictment accuses Scott Balotin (49, Saint Johns), Greg Carter (62, Fleming Island), Thomas Jones (50, Jacksonville), John Clark Walton (49, Jacksonville), David Stevens (40, Callahan), Sam Todd (40, Jacksonville Beach), Derwin Allen (50, Jacksonville), and Pablo Ortiz (51, Middleburg) of conspiracy.

In a related case, a grand jury also returned an indictment charging Qualla Miller (42, Orange Park), Earl Smalls (57, Jacksonville), and Mario Correa Jackson (35, Jacksonville) each with one count of conspiracy to commit health care fraud and separate counts of soliciting and receiving kickbacks. In addition, Smalls and Jackson were each charged with paying kickbacks, and Miller and Smalls were each charged with money laundering.

According to the indictments, Balotin owned and operated Casepark, a Jacksonville marketing firm that used sales representatives to market medications, including creams for pain and scars, to health care benefit program beneficiaries. The creams had very high reimbursement rates, ranging from approximately $4,000 to $17,000 for a one-month supply.

Casepark focused its promotional efforts on TRICARE beneficiaries, according to the indictment, based upon an understanding and belief that TRICARE would pay claims for the medications. The indictment alleges that a large number of the prescriptions generated for the recruited TRICARE beneficiaries were directed to Park and King Pharmacy, owned and operated by Greg Carter. Casepark received about 55% of the after-cost amount of each claim paid by a health care benefit program to Park and King Pharmacy for each prescription filled, according to the U.S. Attorney. Casepark, and Park and King, paid the sales representatives a percentage of the paid claims they received from the pharmacies, the indictment states.

At least $35 million has been traced back to the fraud, but this type of kickback is not uncommon.

Local attorney John Holzbaur, not affiliated with the case, said this is a crime that became popular around 2014.

“These types of cases, unfortunately, have become what is described as an epidemic here in the middle district just in the last year or so,” Holzbaur said. “The anti-kickbacks statute prohibits any insurance program that participates in the Affordable Care Act in the marketplace because all those insurance plans are basically federally subsidized since they are on that marketplace.”

The business owners, doctors and patient recruiters would pay themselves from the TRICARE reimbursements.

An indictment is a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty, according to the U.S. Attorney.

The indictment also notifies those involved that the United States intends to forfeit the proceeds traceable to the offense, as well as items and properties purchased with proceeds traceable to the offense, including a 2015 Cadillac Escalade, an R.V. and two homes.

“Prescription drug fraud increases the cost of medicine for everyone,” said FDLE Jacksonville Special Agent in Charge John Burke in a news release. “I thank our agents, JSO and all of our partners working this long-term, complex investigation to ensure these criminals do not profit off the backs of our citizens.”

Depending on the charge, each participant faces a maximum of 5 to 10 years in federal prison.


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