Federal investigation found illegal kickbacks for prescriptions; whistleblower to receive portion of settlement.
A California businessman has agreed to pay $600,000 to resolve allegations that he violated federal law by paying kickbacks to obtain prescriptions reimbursed by Medicare, federal prosecutors announced this week.
According to Acting U.S. Attorney and Special Attorney Alina Habba, Andrew Do, of Orange County, operated three mail-order pharmacies between 2016 and 2020 and was accused of engaging in fraudulent billing practices that violated the False Claims Act and the Anti-Kickback Statute.
The U.S. government alleges that Do paid financial incentives to secure prescriptions for compounded topical creams, filled them at his pharmacies, and then billed Medicare for reimbursement. These actions, according to the government, constituted knowingly submitting false claims to a federal program.
The $600,000 settlement was reached after an assessment of Do’s finances, and reflects his documented inability to pay a higher amount.
Part of the case was initiated under the qui tam provisions of the False Claims Act, which allow private individuals to file lawsuits on behalf of the federal government. One of Do’s pharmacies—Family Care Investments, doing business as Value Pharmacy—was specifically named in a whistleblower lawsuit filed by Daniel Toellner, who will receive up to $100,000 from the settlement under the statute’s relator provisions.
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