Pharmacy Executive Admits to $46 Million Fraud Targeting NJ and Military Health Plans

Conspirators Manipulated Compounded Medication Formulas for Profit, Defrauding Insurance Providers

NEWARK, N.J. – Christopher Casseri, 56, former vice president of sales for a Louisiana-based compounding pharmacy, admitted today to participating in a scheme to defraud New Jersey public health plans and military health insurer TRICARE, according to Vikas Khanna, Attorney for the United States. 

Casseri pleaded guilty before U.S. District Judge Edward S. Kiel to one count of conspiracy to commit healthcare fraud, following his role in a scheme that led to $46 million in fraudulent claims.

Casseri, along with pharmacy executives Christopher Kyle Johnston, 45, and Trent Brockmeier, 62, was part of a scheme involving Central Rexall, a Louisiana pharmacy specializing in compounded medications. Compounded medications are customized treatments prepared to meet individual patients' needs; however, Johnston, Brockmeier, and Casseri allegedly exploited the system to create medications aimed at maximizing insurance reimbursements. Johnston and Brockmeier still face multiple charges, including wire fraud, money laundering, and identity theft, with a trial set for January 2025.

Court documents reveal that the three conspirators, in partnership with Central Rexall CEO Hayley Taff, who pleaded guilty to conspiracy to commit healthcare fraud in 2020, focused on inflating profits by designing compounded medications that utilized ingredient combinations known to generate high reimbursements, especially from New Jersey state and local government employee health plans and TRICARE, which insures current and former military members and their families. Through a process of “trial and error,” employees allegedly tested various ingredient combinations by submitting fictitious prescription claims to a Pharmacy Benefits Administrator, which determined which formulations would yield the highest insurance payouts.

Once profitable combinations were identified, the team sent these compounded medications to patients, disregarding whether the medications were medically necessary. When insurers discontinued reimbursements for a formula, they created new ingredient combinations to continue profiting without informing patients or doctors of any changes. 

The indictment further alleges that Casseri and his associates recruited doctors to prescribe the medications through improper incentives, including signing prescriptions without patient examinations and offering payments to patients and doctors.

Casseri faces a maximum penalty of five years in prison and a $250,000 fine. Sentencing is set for March 18, 2025. Johnston and Brockmeier, who are accused of additional crimes including money laundering, are presumed innocent until proven guilty.