Two Admit Roles in Multimillion-Dollar Kickback Scheme

Two individuals plead guilty to their roles in a multimillion-dollar compounded medication kickback scheme that netted $33 million.Photo byRonak RamnanionUnsplash

Two individuals have pleaded guilty to their involvement in a multimillion-dollar compounded medication kickback scheme operated through a Clifton, New Jersey pharmacy, according to the U.S. Attorney’s Office for the District of New Jersey.

Jeffrey Andrews, 73, pleaded guilty on Sept. 24, 2024, before U.S. District Judge Madeline Cox Arleo to one count of conspiracy to violate the Anti-Kickback Statute.

Adam Brosius, 59, pleaded guilty on Sept. 23, 2024, before U.S. Magistrate Judge Michael A. Hammer to two counts: conspiracy to commit health care fraud and conspiracy to violate the Anti-Kickback Statute.

According to documents filed in this case and statements made in court, from 2014 to 2016, Andrews and Brosius used Main Avenue Pharmacy, a mail-order pharmacy with a storefront in Clifton, to run an illegal kickback scheme involving compounded medications such as scar creams, pain creams, migraine treatments, and vitamins.

Andrews served as the Chief Financial Officer of Main Avenue, while Brosius initially worked as director of business development before becoming its president.

The scheme targeted compounded medications that would generate high reimbursements from health insurers, including Medicare, TRICARE, and commercial payers.

TRICARE, the health care program for active duty service members, their families, National Guard and Reserve members, retirees, and survivors, was one of the programs exploited in the scheme.

Main Avenue Pharmacy created large prescription pads with lucrative compound formulas and distributed them to marketers. These marketers had financial agreements with telemedicine companies and doctors, who would then prescribe the compounds.

Once prescriptions were filled, Main Avenue submitted claims to health care benefit programs for reimbursement and paid kickbacks to marketers based on the volume of prescriptions generated.

The pharmacy received approximately $33 million in reimbursements from health care benefit programs, with over $5.8 million coming from TRICARE, a federal payer.

The conspiracy to commit health care fraud carries a maximum penalty of 10 years in prison, while conspiracy to violate the Anti-Kickback Statute is punishable by up to five years in prison.

Both charges also carry fines of $250,000 or twice the gross gain or loss from the offense. Brosius is scheduled to be sentenced on Feb. 20, 2025, and Andrews on Feb. 18, 2025.