Pharmacy Executives Convicted in $100M Health Care Fraud Targeting New Jersey Benefits Programs

Defendants Also Guilty of Identity Theft and Money Laundering in Multi-State Scam

NEWARK, N.J. – Two former executives of a Louisiana compounding pharmacy have been convicted of orchestrating a $100 million health care fraud scheme that targeted New Jersey state health benefits programs and TRICARE, the federal insurance plan for military personnel and their families.

Christopher Kyle Johnston, 46, of Baton Rouge, Louisiana, and Trent Brockmeier, 62, of The Villages, Florida, were found guilty on March 10, 2025, of multiple felony charges, including conspiracy to commit wire fraud and health care fraud, identity theft, and money laundering, following a six-week trial before U.S. District Judge Edward S. Kiel in Newark.

Their sentencing is scheduled for July 21, 2025, where they face decades in prison and millions in fines.

Scheme to Exploit Insurance Reimbursements

Court records and trial evidence revealed that Johnston and Brockmeier, former executives at Central Rexall Drugs, a Louisiana pharmacy specializing in compounded medications, manipulated the compounding process to maximize insurance reimbursements rather than meet legitimate medical needs.

In 2013, the two men took over management of Central Rexall, agreeing to split 90% of its profits. They exploited reimbursement loopholes, realizing that insurers—especially New Jersey’s public employee benefits programs and TRICARE—would pay thousands of dollars per prescription for certain custom-mixed medications, such as:

• Pain creams
• Scar treatments
• Antifungal medications
• Vitamin blends

Johnston and Brockmeier systematically designed drug formulas to maximize insurance payouts, testing fake prescriptions to determine which ingredients led to the highest reimbursements. No doctors prescribed these test medications, and the pharmacy submitted fraudulent claims using real patients’ identities without their consent.

How the Scam Worked

The defendants built a high-pressure sales operation to push these costly prescriptions. Their criminal tactics included:

• Forging prescriptions and submitting them without patients’ knowledge
• Bribing doctors to sign off on prescriptions without examining patients
• Paying patients to accept unnecessary medications
• Refilling prescriptions without patient consent

The fraudulent scheme led to approximately $100 million in fake insurance claims. Johnston pocketed $34 million, while Brockmeier took $5 million from the illicit profits.

Convictions and Sentencing Risks

The jury convicted both men on three felony counts:

1. Conspiracy to Commit Wire Fraud and Health Care Fraud – Up to 20 years in prison and a $250,000 fine, or twice the amount of the fraudulent gain or loss
2. Conspiracy to Commit Identity Theft – Up to five years in prison and a $250,000 fine
3. Conspiracy to Commit Money Laundering – Up to 10 years in prison and significant financial penalties, including twice the amount of laundered funds

50 individuals have already been convicted or pleaded guilty in connection with the broader conspiracy.

Federal Investigation and Prosecution

The convictions were the result of a multi-agency investigation involving:

• FBI’s Atlantic City Resident Agency (under Acting Special Agent in Charge Terence G. Reilly)
• IRS - Criminal Investigation (led by Special Agent in Charge Jenifer Piovesan)
• U.S. Department of Labor, Office of Inspector General, Northeast Region (led by Special Agent in Charge Jonathan Mellone)

The case was prosecuted by Assistant U.S. Attorneys R. David Walk, Jr. and Daniel A. Friedman of the Criminal Division.

Implications and Ongoing Efforts Against Health Care Fraud

This case highlights aggressive federal action against health care fraud and identity theft, particularly schemes that target public health insurance programs and military service members' benefits.

Authorities continue to crack down on fraudulent compounding pharmacies, which have become a major source of health care fraud nationwide, siphoning billions from government-funded programs.

What Comes Next?

Johnston and Brockmeier will remain in custody until their sentencing in July 2025, where they could face decades in prison and financial restitution orders to recover fraudulent proceeds.

Federal authorities urge victims of medical fraud to report concerns to the FBI, IRS, or the U.S. Department of Labor’s fraud hotline.