| On October 30, 2019, a federal grand jury in Jacksonville, Florida, indicted eight men, including 49-year-old Scott Balotin, on charges of conspiring to commit health fraud, as well as soliciting and paying kickbacks and money laundering.
The indictment accused them of defrauding the federal government through the sale of compounded medical prescriptions between May of 2014 and August of 2015.
Balotin owned and operated Casepark, a Jacksonville firm that marketed compounded medications, including pain and scar creams, to health care benefit program beneficiaries. The creams had reimbursement rates of about $4,000 to $17,000 for a one-month supply, according to the indictment.
Casepark focused its promotional efforts on beneficiaries of TRICARE, an insurance benefit program for U.S. military personnel, retirees, and their families. The indictment alleged that many of the prescriptions for those beneficiaries were directed to Park and King Pharmacy, operated by Greg Carter, who was one of the defendants indicted.
Casepark received about 55 percent of the after-cost amount of each claim paid by the health care benefit program to Park and King Pharmacy for each prescription filled, prosecutors said. Casepark, plus the pharmacy, paid Casepark sales representatives—patient recruiters—a percentage of the claims received from the pharmacies.
The indictment alleged that the patient recruiters made illegal kickbacks to the beneficiaries to induce them to provide their TRICARE information and to request those cream prescriptions from various doctors. The indictment said those prescriptions were filled at Park and King and other pharmacies, with commission payments made to Casepark and its sales representatives.
Ultimately four of the defendants, including David Stevens, who was a patient recruiter for Park and King Pharmacy, agreed to plead guilty and testify for the prosecution. Balotin went to trial along with three other defendants: Gregory Carter, owner of Park and King Pharmacy, and two patient recruiters for Casepark, Thomas Jones and John Walton.
Prior to trial, the prosecution disclosed information about its witnesses that the defense could potentially use to impeach the witnesses’ credibility. The disclosure said that Stevens had been previously convicted of money laundering and trafficking in oxycodone or its derivatives in September 2015 in the Fourth Judicial Circuit in Duval County.
The trial began in September 2021 in the U.S. District Court for the Middle District of Florida. During the trial, Stevens testified to his role as a patient solicitor, and giving and receiving kickbacks.
On October 18, 2021, the jury convicted Balotin of conspiring to commit health care fraud and money laundering. He was acquitted of soliciting a kickback and payment of a kickback. Jones was also convicted of conspiring to commit health care fraud and money laundering. Carter and Walton were acquitted of all charges. Following a forfeiture hearing, the jury ordered Balotin to forfeit $2.5 million in assets.
On September 28, 2023, just prior to sentencing for Balotin and Jones, the prosecution disclosed to the defense more information on Stevens’s involvement in several other federal investigations that were conducted by the U.S. Drug Enforcement Administration. Stevens made numerous undercover illegal purchases of oxycontin. Included in the disclosure was a report of an interview of Stevens by federal agents during which he was quoted as saying, “I would do anything to stay out of jail and remain with my family.”
The sentencing was postponed. On October 16, 2023, the prosecution and lawyers for Balotin and Jones filed a joint motion for a new trial based on newly discovered evidence.
The motion said that the prosecution had provided more information in response to follow-up requests from the defense. “The additional materials regarding Stevens…have added significantly to the body of newly discovered evidence that establish a significant failure by the government to timely disclose to defense counsel highly material evidence bearing directly on the credibility of Mr. Stevens as a prosecution witness,” the motion said.
The motion also said that the defense had discovered that the prosecution had failed to disclose evidence regarding another prosecution witness, Jeremy Bezroukoff.
“Both David Stevens and Jeremy Bezroukoff were key witnesses against both Balotin and Jones at trial,” the motion said. “They were referenced by the prosecution in opening statements and testimony by them was argued in closings, including the Government’s rebuttal closing.”
“The newly discovered evidence bearing directly on the credibility of these key witnesses referenced in this motion may well have resulted in a different verdict, particularly from a jury which acquitted some defendants entirely and even partially acquitted Balotin and Jones,” the motion said.
The motion was granted that day. On October 6, 2024, the prosecution moved to dismiss the case against Balotin. On October 16, U.S. District Judge Marcia Morales Howard granted the motion and the case was dismissed. The forfeiture order was rescinded.
In December 2024, Jones pled guilty and was sentenced to one year and one day in prison.
– Maurice Possley
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