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Money

Two executives of a reverse pharmaceutical distributor found guilty of theft, money laundering, and fraud.

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Two executives of a reverse pharmaceutical distributor found guilty of theft, money laundering, and fraud.  

Two senior officials who are also proprietors of Guaranteed Returns company were sentenced to prison for fraud, money laundering, and obstruction to justice, among other charges. The company provided reverse pharmacy distribution services in New York with over 12,000 clients, including the government department of defense. But it was accused of massively stealing from these clients for almost two decades amounts above 100 million dollars cumulatively. However, in July 2019, the two defendants and their company were convicted for the atrocities they committed since 1999.

The judgment passed followed a trail hearing that had been conducted two years earlier regarding severe allegations labeled against the two executives and the company in general. Dean Volkes, who served as the chief executive officer and proprietor of the company accused alongside him, was sent to jail for five years. He further forfeited 115 million dollars and paid restitution of 95 million dollars together with his company. Volkes was widely accused of refusing to pay clients their dues comprising pharmaceutical stores, hospitals, and nursing homes. He was also condemned for obstructing justice and providing false statements to continue stealing from the clients who returned their unutilized drugs and other medical products for payment as per the legitimate business of the company he was running.

The other co-accused, the chief financial officer of the same company and a sibling to the first accused, was handed 367 days behind bars for her role in the scheme. Donna Fallon was also to serve five years of probation and pay restitution of 515,000 dollars. The two defendants run Guaranteed Returns company that was in a legal business of reverse medical distribution. The company returned expired or used medical products to the manufacturers on behalf of the clients and received a commission from the return value of the products presented to it. As such, thousands of clients in the pharmaceutical industry returned their products through the company. However, their payments were not coming forth, although the manufacturers were faithfully paying the return value.

During the trial hearing, the court heard the first accused directed the clients’ returned products in their stores to be hidden, and the company would return these products as its property and receive the payment from the manufacturers. Therefore, the clients did not receive their refund from 1999 to 2014. The funds received were thus diverted into the company’s accounts, and the two schemed through a conspiracy to laundering the money for personal gains. According to the investigators, the two defendants used the illicit money to obstruct justice. The prosecution team linked the duo with losses that occurred even to facilities run by the department of defense and other government agencies. It was alleged that the government organs lost over 20 million dollars from this scam.

While speaking after the judgment was passed, the government legal team praised the action of sending the defendants to jail and forfeiture of the illicitly acquired property as a strong warning to other individuals running such businesses. Additionally, they condemned the theft of government property by the two individuals, which they executed systematically for close to two decades. According to evidence tabled, the first defendant grossly accused of misleading the investigating team by giving false statements to cover up his illegal scheme. In 2017, the matter entered plea hearing where they were charged with wire fraud and mail fraud, among other theft charges. While they maintained they were innocent, they could not explain why the company kept the client money. It was established that Volkes would pay some clients specific amounts while he kept the whole proceeds for some other clients. This business practice was termed as robbing from clients and was highly reliable evidence of concluding it was theft.

Avoid greed in your professional practice and treat your customers with integrity. While some legal issues may arise at your workplace, you must cushion yourself for any consequence of being found guilty. Also, it critical to understand anyone can be accused of healthcare fraud or other malpractices. Healthcare fraud, mail or wire fraud, money laundering, and stealing government property are severe claims that can cost the accused years in jail and millions of dollars lost in fines, restitution, and forfeiture costs. As such, if you have been accused wrongfully of any malpractice, you need a competent team of defense lawyers to maintain your innocence in court. Avoid these punitive measures by working with our criminal defense attorneys at Healthcare Fraud Group.

 

 

 

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