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Two North Texas Men Indicted for $65M Health Care Fraud

Posted by Dan Cogdell | Mar 01, 2016 | 0 Comments

Two North Texas men — Richard Robert Cesario, 44, of Plano and John Paul Cooper, 47, of Southlake — are under felony indictment for allegations they engaged in a health care fraud conspiracy that cost military health system TRICARE more than $65 million in losses, according to the FBI.

TRICARE is the U.S. Department of Defense Military Health System that provides health care services for active duty service members, National Guard and Reserve members, retired military personnel and their families. TRICARE benefits include prescription drug coverage, including compounded drugs deemed medically necessary that are prescribed by a doctor.

According to the indictment, Cesario and Cooper are co-owners of a Dallas company — CMGRX LLC — that markets compounded pain and scar creams to members of the military and their families. The complaint alleges that Cesario and Cooper, among others, conspired to defraud TRICARE that caused the provider to suffer an actual loss of over $65 million.

The indictment alleges that Cesario and Cooper paid TRICARE beneficiaries a monthly fee of $250 for every prescription they filled for compounded drugs through CMGRX's affiliated compounding pharmacies. The drugs included creams for pain, scars and migraines as well as vitamins. In order to disguise these payments, the defendants allegedly set up what was purported to be a TRICARE-approved “Patient Safety Initiative” study to evaluate the effectiveness of the prescribed drugs. The indictment claims that the study was not approved by TRICARE and was not a valid medical study.

In addition, the indictment alleges that the defendants created a “shell” charitable foundation and wrote checks from the charity to TRICARE beneficiaries and physicians to disguise what were actually kickbacks for obtaining and writing prescriptions.

Cesario and Cooper each face one count of conspiracy to commit health care fraud, four counts of receipt of illegal remuneration and six counts of illegal remuneration. The conspiracy count carries a maximum penalty of 10 years in federal prison and a $250,000 fine. Each of the 10 illegal remuneration counts carries a maximum penalty of five years in federal prison and a $250,000 fine. If convicted, the defendants may also be ordered to pay restitution and forfeit any property traceable to the offense.

The Cogdell Law Firm is a full service criminal litigation and appellate law firm. We provide client-focused representation at all stages of the process, whether our clients are seeking to avoid charges, have been charged, or are seeking reversal of a conviction on appeal. When results matter most, contact Dan Cogdell at (713) 426-2244 or [email protected]

About the Author

Dan Cogdell

Principal & Founder Principal and founding attorney at Cogdell Law Firm, Dan Cogdell, is often referred to by his contemporaries as a “Texas trial legend.” He has been practicing criminal defense law for 36 years, during which time he has handled some of the most complex and high-profile cases i...


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