HATTIESBURG, Mississippi – Two physicians and two registered nurses face charges for their alleged roles in a multimillion dollar scheme to defraud TRICARE, Blue Cross Blue Shield of Mississippi and United Healthcare of Mississippi.

They are Shahjahan Sultan, MD, 37, of Madison, MS; Thomas Edward Sturdavant, MD, 56, of Kingsport, TN; Freda Cal Covington, RN, 54, of Hattiesburg, MS; and Fallon Deneem Page, RN, 36, of Soso, MS.

Each were charged in various counts of a 15-count indictment returned on June 11, 2019, in the Southern District of Mississippi. The indictment was unsealed upon the defendants’ arrests on Tuesday, June 25. They are making their initial appearances this week before U.S. Magistrate Judge Michael T. Parker of the Southern District in Hattiesburg.

Also in the indictment was a pharmacy, which is not identified by name, but referred to as being “Ocean Springs-based.”

The indictment alleges that “Pharmacy 1” would make “compounded medications not based on evaluations or effectiveness or individual patient need, but rather based on the reimbursement amount per ingredient included, also known as high yield medications.”

The unnamed pharmacy is estimated to have allegedly been reimbursed more than $7 million by health care providers for dispensing medications prescribed by Sultan and Sturdavant.

Sultan, an internal medicine specialist, at one time had an office in Ocean Springs, MS. Also a tenant in the building was Pittsburgh Medical Marketing of Ocean Springs, LLC, that reportedly was owned by Sultan. The company, established in 2014, has since dissolved.

Another company that Sultan was associated with was Medical Solutions of Ocean Springs, LLC, with an office in Biloxi, MS. Established in 2013, it has also since dissolved.

How it worked

The indictment alleges that Sultan entered into an agreement with “Pharmacy 1” that he would prescribe these high yield medications in exchange for a percentage of the reimbursements paid to the pharmacy by TRICARE, Blue Cross, United and other insurance companies.

In addition, Sultan is alleged to have been paying Sturdavant to also write those high yield medication prescriptions.

The indictment alleges that registered nurses Page and Covington, as well as two of unnamed co-conspirators, would recruit potential customers. Once recruited, the two nurses or the two unnamed co-conspirators allegedly would forward the patient information and high yield compounds to “Pharmacy 1” or a third unnamed co-conspirator.

The indictment continues by stating once the health care insurance company approved the high yield medication, then “Pharmacy 1” would let Sultan or Sturdavant know so they could allegedly authorize the prescription verbally or use a preprinted form. Profits could be maximized when the compounded medicines were prescribed on photocopied forms and set on auto-fill. The indictment states this often would be done without examining the patient to see if there was a need for the compounded prescription.

Sultan allegedly received up to 25 percent of the funds paid by the insurance companies, the indictment stated.

The three unnamed co-conspirators in the indictment are reportedly connected to Pittsburgh Medical Marketing. Sturdavant allegedly owned Magnolia Medical Consultants, established in 2013, in Biloxi.

The crimes allegedly took place between March 2014 and February 2015 in Jackson and Jones counties.

Charges

Sultan, Sturdavant, Covington and Page were each charged with one count of conspiracy to commit health care fraud and mail fraud.

In addition, Sultan was charged with two counts of mail fraud, one count of conspiracy to distribute and dispense an controlled substance, two counts of distributing and dispensing a controlled substance, one count of conspiracy to pay and receive health care kickbacks and four counts of paying health care kickbacks.

Sturdavant also was charged with two counts of mail fraud, one count of conspiracy to distribute and dispense a controlled substance and two counts of distributing and dispensing a controlled substance.

Page also was charged with two counts of mail fraud.

These four people join 13 others who have been convicted in a multi-state $400 million compound pharmacy scheme based in Hattiesburg.

Readers are reminded that an indictment is merely an allegation and that all defendants are presumed innocent unless proven guilty in a court of law.

A trial date was set for Aug. 19 for Sultan and Page.

Officials involved

Making the announcement on June 25 were Brian A. Benczkiwski, assistant attorney general of the Justice Department’s Criminal Division; Mike Hurst, U.S. attorney with the Southern District of Mississippi; Steven J. Jensen, acting special agent in charge of the FBI’s Jackson office; Cyndy Bruce, Mississippi Field Office and special agent in charge of the Defense Criminal Investigative Service’s Southeast Field Office.

The case was investigated by the FBI and DCIS. Prosecuting the case are Assistant Chief Dustin M. Davis and trial attorney Sara E. Porter, Criminal Division’s Fraud Section; assistant U.S. Attorneys Mary Helen Wall and Kathlyn R. Van Buskirk of the Southern District of Mississippi.

The Medicare Fraud Strike Force is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.