Five out of seven defendants in a $2 million medical fraud conspiracy in Dallas have pled guilty, with the other two slated for trial next month.
The owners of Dallas-based Medoc Health Services have been in legal trouble since federal agents stormed their facility in May 2018, which resulted in a formal indictment in 2020.
The complaint named seven individuals involved in the alleged kickback scheme in which doctors filled out prescriptions for compound pain creams and other medications with three North Texas pharmacies in exchange for kickbacks amounting to approximately $2 million between January 2015 and August 2016.
The pharmacies were Total RX Care, Midcities Pharmacy, and Doctors Specialty Pharmacy, according to the filing.
Using approximately 20 subsidiaries, Medco “created a network of physicians that they could and did pressure for referrals payable by Medicare and other federal healthcare programs,” the complaint read.
The kickbacks for this activity were allegedly paid to Medoc partner Michael Schneider as a “salary” from the pharmacies, which was then distributed among five other executives, including to Michael’s brother Mark Schneider. Both men will be tried on fraud charges in December and are the only two defendants not to have entered guilty pleas.
Last month, Kevin Kuykendall and Sabrina Kuykendall, who served as CEO and vice president of finance at Medoc, respectively, pled guilty to the fraud charges. They will be sentenced next February. The plea deals arranged by the married couple include three years in federal prison for Kevin Kuykendall and 36 months of probation for Sabrina Kuykendall, as well as a combined restitution payment of $4.4 million, as reported by The Dallas Morning News.
All seven defendants also face a civil fraud lawsuit from the same alleged fraud conspiracy that was filed in 2017 by Massachusetts realtor Mark Adams, a whistleblower whose employer formerly did business with Medoc.
Other multimillion-dollar medical fraud schemes have been uncovered in Texas this year, such as a scheme involving a doctor in Allen and two pharmacists in Houston. As previously reported by The Dallas Express, these individuals allegedly generated around $170 million in ill-gotten gains between 2016 and 2020.
As of November 24, there have been 2,163 reports of counterfeiting, forgery, and fraud offenses logged in Dallas, according to the City of Dallas crime overview dashboard.
White-collar criminals place an additional burden on an already-taxed police force. The department currently has fewer than 3,200 officers despite a City analysis recommending roughly 4,000 police officers for a municipality the size of Dallas.