ST. GEORGE — The first of two St. George business owners accused of bilking insurance companies out of $250 million dollars in a fraudulent prescription claims scheme pleaded guilty to one federal charge filed in U.S. District Court in New York. The second man awaits trial.
David Gary Bishoff, 38, pleaded guilty to one federal felony charge of conspiracy to commit health care fraud at the end of March, according to the plea agreement that was recently unsealed.
The case was filed following an investigation launched by the FBI in 2020, involving Bishoff and a second man, Brycen Kay Millett, 31, also of St. George, who reportedly ran a number of call centers based out of Utah to fraudulently bill private health insurers for telemedicine prescriptions, federal investigators allege.
While the operations were based in the U.S. initially, the defendants later moved the call centers overseas.
The $250 million scheme
According to federal prosecutors, the call centers would contact individuals enrolled in private insurance programs and offer them medications at no cost and without any medical exam.
Some individuals agreed to receive the medications, while others did not. In either case, the complaint states, the defendants generated false prescriptions.
Bishoff, using the alias “Bobby Fisher,” and Millett, also known as “Brett Johnson,” along with several co-defendants, recruited licensed physicians whose job it was to review the prescriptions presented by health care practitioners following a telemedicine appointment with the patient.
These physicians would write the prescriptions as requested by the practitioners. Then the prescriptions were sent to a number of pharmacies owned by the defendants that were purportedly filled and sent to the patient.
The insurance companies were then billed for the medication on behalf of the insured. However, agents found no evidence that any mid-level practitioners ever recommended or prescribed any medications during the telemedicine appointments.
The insurance companies caught on to the scheme, terminated the relationship with the fraudulent pharmacy, and the defendants allegedly abandoned that particular pharmacy to set up another elsewhere — a process that continued throughout the scam.
The investigation also revealed that private insurers “paid tens of millions of dollars in reimbursements for fraudulent prescriptions,” according to the complaint.
In total, more than $12 million was disbursed to Bishoff and Millett from the first two call centers over the four year period.
St. George News reported on the complex scheme in a report published in April of last year.
Case filed in federal court in Brooklyn
The case was filed in the Eastern District of New York on March 7, 2022, since one of the defendant’s, Hafizullah Ebady, lived in New Jersey when the case was filed. Under federal law, the defendants must appear before a federal magistrate that is closest to where they live for identification and to establish custody arrangements.
In the U.S. District Court of Utah, the file was forwarded to Magistrate Judge Paul Kohler in St. George.
Both Bishoff and Millett were taken into custody by the U.S. Marshals office and they appeared before Kohler for an initial appearance on March 13.
Bishoff accepts plea agreement
According to the 16-page plea agreement that was filed in the case, Bishoff will face between 0-10 years in federal prison followed by at least three years of supervision upon his release. The maximum fine amount is estimated to reach $250,000, or whichever is greater than the gross gain or gross loss resulting from the fraud.
In addition to any fines or restitution that could be ordered by the court, a federal forfeiture judgement filed in New York last month states that once convicted, $8 million in assets or property that Bishoff derived from the scheme — either directly or indirectly — would be seized by the government.
Any balance remaining would need to be paid to the the U.S. Marshals Service prior to the sentencing hearing.
The amount assigned to the defendant was based on a number of factors, such as losses that exceeded $250 million and the number of victims defrauded.
The level of sophistication was also a mitigating factor, and that the scheme operated not only in the United States, but internationally as well.
While Bishoff took the government’s deal, the case against Millett continues. He is scheduled to appear in New York District Court in Brooklyn for a status hearing on July 25.
On the same day that Bishoff appeared for the entry of plea hearing in Brooklyn last month, District Court Judge William F. Kuntz III approved Bishoff’s travel request to the District of Hawaii, where he plans to spend more than four weeks on the island, the order states.
This report is based on statements from court records, police or other responders and may not contain the full scope of findings. Persons arrested or charged are presumed innocent until found guilty in a court of law or as otherwise decided by a trier-of-fact.
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