Mequon man sentenced to 18 months for paying healthcare kickbacks

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By Steve Schuster

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Alexander Shister of Mequon was sentenced to 18 months in prison last week for paying healthcare kickbacks in violation of the Anti-Kickback Statute.

Shister was also ordered to pay nearly $1 million in restitution to Medicare and Medicaid as well as a $40,000 fine, U.S. Attorney for the Eastern District of Wisconsin Gregory J. Haanstad said in a written statement.

Shister owned four Milwaukee-area pharmacies, according to Haanstad.

Shister is listed as the registered agent for Omnicare Pharmacy, LLC, according to the Wisconsin Department of Financial Institutions website.

Beginning in 2016, Shister engaged in a nearly two-year long scheme to pay his co-defendant, David Guerrero, kickbacks in exchange for referrals of Medicare and Medicaid patients to Shister’s pharmacies for expensive compound pain creams. Shister paid Guerrero $100 for each patient referral. Guerrero was not a licensed medical provider, but he worked at two Milwaukee-area clinics and used his access at the clinics to order the pain creams from Shister’s pharmacies, often without the patients’ knowledge or consent. As a result of the scheme, Medicare and Medicaid paid Shister’s pharmacies about $1 million for medically unnecessary pain creams, including creams not even received by patients. Shister paid Guerrero over $100,000 in kickbacks during the scheme, according to the statement.

Guerrero was previously sentenced to 32 months’ imprisonment for his role in the kickback scheme with Shister as well as a second kickback scheme involving a local medical laboratory company, the release states.

At sentencing, United States District Judge J.P. Stadtmueller emphasized the seriousness of Shister’s crime, including Shister’s breach of trust and abuse of the Medicare and Medicaid programs.

Judge Stadtmueller further noted that owners of medical providers like Shister have an enhanced responsibility to ensure that their billings to Medicare and Medicaid comply with the law, rather than take advantage of the system. In addition to his sentence, Shister will also be excluded from participation in the Medicare and Medicaid programs. He has also shut down or sold his pharmacies, according to the release.

“Pharmacies and other medical providers simply cannot pay kickbacks in exchange for patient referrals. As this case demonstrates, kickbacks result in Medicare and Medicaid paying for unnecessary services, rather than services that doctors determine patients actually need or that patients actually want,” said United States Attorney Haanstad.

“Shister abused the trust placed in his pharmacies by the Medicare and Medicaid programs to line his own pockets. This office is committed to working with our federal, state, and local partners to prevent kickback schemes and other frauds against the Medicare and Medicaid programs,” he added.

“Health care fraud affects everyone and causes tens of billions of dollars in losses each year,” said Michael E. Hensle Special Agent in Charge of the FBI Milwaukee Field Office. Health care fraud is a federal crime and erodes the stability of our health care system. The FBI will utilize all resources necessary to pursue those who exploit the medical system for personal gain over the needs of patients,” SAC Hensle said in a statement.

“The payment of kickbacks in exchange for referrals can undermine the trust that we place in our nation’s medical providers and can also result in the delivery of unnecessary and costly medical services and supplies,” said Special Agent in Charge Mario M. Pinto of the U.S. Department of Health and Human Services Office of Inspector General.

“Our agency is committed to working with our law enforcement partners to ensure that those who engage in these activities are held accountable.”

The Federal Bureau of Investigation and the Office of the Inspector General, Department of Health and Human Services investigated the case. Assistant United States Attorneys Benjamin Proctor and Michael Carter handled the prosecution.