Nurse and Former Marines Sentenced in $65 Million Military Fraud Scheme

Three individuals involved in a massive conspiracy to defraud the military’s health insurance program TRICARE were sentenced this week in federal court, according to the Department of Justice

  • Daniel Castro and Jeremy Syto, both former U.S. Marines, recruited fellow service members to obtain expensive compounded drugs in exchange for kickbacks.
  • Nurse practitioner Candace Craven wrote fraudulent prescriptions and submitted false insurance claims to TRICARE for reimbursement. 
  • All told, the scheme resulted in $65 million in fraudulent billings to TRICARE.

Castro and Syto, who were sentenced to 21 months and 15 months in prison respectively, recruited fellow Marines to obtain expensive compound drugs they did not need. The Marines were paid kickbacks for agreeing to the medications. Compounded drugs are custom-made medications that are not approved by the FDA. They can be significantly more expensive than standard FDA-approved drugs. According to court documents, Castro and Syto recruited over 200 Marines as part of the scheme.

Candace Craven, a nurse practitioner, wrote fraudulent prescriptions for the compound drugs and helped submit the false claims to TRICARE for reimbursement. She was sentenced to three months of home confinement for her role in the fraud scheme. Prosecutors allege that Craven worked with several pharmacies and marketers to carry out the fraud, which resulted in $44 million in fraudulent billings to TRICARE.

Nurse Practitioner Craven confessed that her primary responsibility involved writing and processing fraudulent prescriptions and completing other falsified paperwork for compounded drugs intended for straw beneficiaries.

All the defendants were employed by Jimmy and Ashley Collins, a married couple residing in Birchwood, Tennessee, who orchestrated the scheme. Recently, Jimmy Collins was sentenced to 10 years in prison, while Ashley Collins received an 18-month home confinement sentence. In addition, to address the entirety of the fraud, the couple was mandated to pay $65,679,512.71 in restitution to the Defense Health Agency and TRICARE.

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The surge in fake prescriptions for compounded drugs, as outlined in the allegations, stemmed from various fraudulent schemes, including the one in question, which emerged nationwide. Consequently, the TRICARE program faced a $2 billion surge in liability for compounded prescription drugs.

U.S. Attorney Tara McGrath condemned the egregious scheme for undermining healthcare services for those who bravely serve our nation. McGrath emphasized the entitlement of military members and taxpayers to better standards, stating that the case reflects the commitment to safeguarding the well-being of armed forces personnel and ensuring the protection of U.S. taxpayers.

Throughout the investigation, authorities seized multiple items and properties purchased by the Collinses and others using the proceeds of the fraud. These assets include an 82-foot yacht, luxury vehicles such as two Aston Martins, a multimillion-dollar investment annuity, gold and silver bars, dozens of pieces of farm equipment and tractor-trailer trucks, as well as three Tennessee real estate properties.

All told the conspiracy resulted in over $65 million in false claims being submitted to TRICARE, the health insurance program that covers military members and their families. Castro, Syto, Craven, and others involved received kickbacks for recruiting Marines and submitting fraudulent claims. The case was investigated by the Department of Defense Criminal Investigative Service, the Defense Health Agency, and the FBI.

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