Former Pharmacy Owner to Serve Nearly 5 Years for $3.5 Million Medicaid Fraud

After pleading guilty to Medicaid fraud and tax evasion, Chad Shedron, owner of Family PharmaCare Inc., has been sentenced to 57 months in prison for defrauding the Indiana Medicaid program of $3,521,961.22. In addition, Mr. Shedron is required to repay the $3,521,961.22 that he fraudulently claimed from the Indiana Medicaid program plus an additional $527,670.99 in back taxes for tax years 2007 through 2010.

Under the plea agreement, Mr. Shedron abandoned the right to appeal his sentence or conviction. In addition, Mr. Shedron agreed to a permanent debarment from participating in any and all federally funded health benefit programs.

Pharmacy Submitted over $3.5 Million in False Claims for Fraudulent Prescriptions.

In his guilty plea, Mr. Shedron admitted to submitting fraudulent prescription claims to the Indiana Medicaid program, charges that carry a maximum sentence of 15 years in prison. Family PharmaCare sought $3,521,961.22 in reimbursements from Indiana’s Medicaid program for medications that were purportedly prescribed to Medicaid patients. In fact, according to the Indianapolis Star, no doctors prescribed the drugs.

The charge of tax evasion was based on Mr. Shedron’s 2007 tax return, in which he reported income of $6,169 and claimed a $1,377 refund. His actual taxable income for the year was $595,756.61, and he actually owed $189,009. Mr. Sheldon also admitted responsibility for another $338,661.99 in “tax losses” between 2008 and 2010.

Medicaid Fraud Enforcement Often Relies on Whistleblowers.

Finding and stopping Medicaid fraud can be quite difficult. In many cases, the best source of information about ongoing Medicaid fraud is from a whistleblower who has access to inside information. The False Claims Act recognizes the importance of whistleblower involvement, and the qui tam provisions of the False Claims authorize whistleblowers to file a lawsuit on behalf of the government and to share in any recovery.