SAN DIEGO – Two doctors, Susan Vergot and Carl Lindblad, were
sentenced in federal court today for participating in a health care
fraud scheme that bilked TRICARE – the health care program that covers
United States service members – out of tens of millions of dollars by
prescribing thousands of exorbitantly expensive compounded drugs to
patients they never saw or examined.
Dr. Vergot and Dr. Lindblad were sentenced to 24 and 28 months in
custody, respectively, by U.S. District Judge Janis L. Sammartino. The
custodial portion of each defendant’s sentence will be split between
prison and home confinement. Each was also sentenced to pay a $15,000
"This conspiracy inflicted nearly $65 million in actual losses to
TRICARE, the health care benefits program relied upon by millions of our
military members and their families," said U.S. Attorney Robert Brewer.
"It is hard to imagine a more outrageous example of selfish doctors
stealing from the U.S. health care system believing they were exempt
from providing necessary care."
"Today’s sentencings demonstrate our resolve to hold those
accountable who seek to enrich themselves at the expense of taxpayers,"
said Michael Mentavlos, Special Agent in Charge of the Defense Criminal
Investigative Service, Southwest Field Office. "TRICARE is a critical
DoD program providing care for our service members, retirees, and their
families. Together with our partners, we will continue to use all means
available to root out fraud in this invaluable program."
Compounded medications are specialty medications mixed by a
pharmacist to meet the specific medical needs of an individual patient.
Although compounded drugs are not approved by the Food and Drug
Administration (FDA), they are properly prescribed when a physician
determines that an FDA-approved medication does not meet the health
needs of a particular patient, such as if a patient requires a
particular dosage or application or is allergic to a dye or other
According to the sentencing memorandum, as part of this conspiracy a
team of individuals worked to recruit and pay Marines, primarily from
the San Diego area, and their dependents – all TRICARE beneficiaries –
to obtain compounded medications that would be paid for by TRICARE. This
information was sent to Choice MD, the Tennessee medical clinic that
employed Dr. Vergot and Dr. Lindblad. Dr. Vergot and Dr. Lindblad then
wrote prescriptions for the TRICARE beneficiaries, despite never
examining the patients. Once signed by the doctors, these prescriptions
were not given to the straw beneficiaries, but sent directly to
particular pharmacies controlled by co-conspirators, most often a small
pharmacy, The Medicine Shoppe in Bountiful, Utah, which filled the
prescriptions and mailed the drugs to the patients in California.
Between November 2014 and June 2015, Drs. Vergot and Lindblad
authorized 6,694 prescriptions, for which their co-conspirators billed
TRICARE a staggering $89,725,000. Of this amount, over $65 million was
for prescriptions written for straw TRICARE beneficiaries in the
Southern District of California.
Defendants Vergot and Lindblad are the second and third defendants
sentenced in this matter. CFK, Inc., the corporate owner of The Medicine
Shoppe, was sentenced previously. A nurse practitioner, Candace Craven,
previously pleaded guilty, as have the patient recruiters, including
Joshua Morgan, Kyle Adams, Daniel Castro, Jeremy Syto, and Bradely
White. All await sentencing. Jimmy and Ashley Collins, the owners of
Choice MD, were charged by Superseding Indictment in June 2020. Their
case remains pending. .
DEFENDANTS Case Numbers: 18-CR-1850-JLS, 18-CR-1855-JLS
Carl Lindblad Age: 77 Chattanooga, TN
Susan Vergot Age: 65 Chattanooga, TN
SUMMARY OF CHARGES
Conspiracy to Commit Health Care Fraud – Title 18, U.S.C § 1349
Maximum penalty: Ten years in prison and $250,000 fine or double loss amount, whichever is greater
Defense Criminal Investigative Service
Naval Criminal Investigative Service
IRS Criminal Investigation Division, Gulfport, MS
Federal Bureau of Investigation - Jackson, MS Field Office