The United States Attorney’s Office for the Middle District of Pennsylvania announced that Frank Suess (a.k.a., Franz P. Suess), age 79, of Wellington, Florida, pleaded guilty before Senior United States District Judge Malachy E. Mannion to conspiracy to commit health care fraud and conspiracy to violate the anti-kickback statute. Suess also agreed to forfeit a commercial property in Wellington, Florida that he used to carry out his offenses.
Four individuals who were charged along with Suess are still pending trial: Luis Salgado, age 51, of Naperville, Illinois and Davenport, Florida; Melissa Driscoll, age 44, of East Stroudsburg, Pennsylvania; Victor Velazco, age 36, of Loxahatchee, Florida; Dave Singh, age 38, of Pembroke Pines, Florida. Two defendants who were also charged along with Suess previously pleaded guilty and are awaiting sentencing: Warren Pizik, age 69, of Davie, Florida and Diana Castro, age 54, of Brooklyn, New York.
According to United States Attorney Brian D. Miller, Suess admitted that between 2019 and 2020, he and his codefendants conspired to commit health care fraud through an arrangement designed to bill individuals’ health insurances for medically unnecessary prescription drug combinations known as “foot baths.” Foot baths were purported to be an antibiotic and antifungal “foot soak” treatment that patients were supposed to mix together and dissolve in a warm water solution, using a plastic foot tub. The combinations of prescription drugs contained in foot baths varied over time, but they generally included high-cost drugs that were not intended for or approved for use in a foot bath, including vancomycin capsules, tobramycin vials, calcipotriene cream, moxifloxacin eye drops, clindamycin phosphate solution, and ketoconazole cream.
Suess also admitted that he and certain codefendants acquired control of pharmacies in a way that allowed Suess to conceal his involvement in their business affairs. One such pharmacy was Sterling Pharmacy, which was located in Jermyn, Pennsylvania. Suess, using a company that he controlled called Medivalue Florida LLC, financed the purchase and initial operating expenses for Sterling Pharmacy through a loan to Melissa Driscoll around March 2018. In a similar manner, Suess financed the purchase of DCE Pharmacy, located in Texas, and Motto Pharmacy, located in Florida.
Once they got control of pharmacies, Suess and other defendants used those pharmacies to generate profits by steering high-cost prescription drug mail orders, including foot baths, to those pharmacies. Pharmacies were selected to fulfill prescription drug orders based on which insurance plans they could bill through and for the amounts they could bill for such drugs. When the pharmacies were investigated for those dispensing practices, Suess and his codefendants used various tactics to continue concealing Suess’s involvement. In addition, Suess and others acquired control of various pharmacies so that they could continue generating profit from prescription drug mail orders even if one pharmacy was suspended or terminated by a pharmacy benefit manager because of its business practices.
Suess admitted that the scheme to bill for fraudulent foot bath orders involved getting prechecked, templated order forms through “health fairs” in the New York area organized by certain codefendants and their associates. Each of these forms was for large quantities of certain expensive prescription drugs. The forms were prechecked to permit multiple refills without any further patient evaluation or involvement of a medical provider. Suess admitted that he and his codefendants made no effort prior to fulfilling these orders to confirm that any individual recipient wanted or agreed to receive such foot bath drugs.
Suess also admitted that he and his codefendants knowingly ignored complaints from individuals who received foot baths. These complaints included not wanting foot baths, not having ever seen a foot doctor, having their insurance “charged a lot of money,” being “freaked out” because there were no instructions regarding what to do with the medications, and being “scared of the box” of foot baths because it contained “such a huge amount of meds.” Suess admitted that he and his codefendants stopped billing for foot baths through Sterling Pharmacy only because insurance companies stopped processing the pharmacy’s orders. In addition, Suess admitted that he and other defendants continued to attempt to bill for similar prescription drug orders in 2021 even though insurance companies repeatedly communicated to them that such orders were being rejected.
Suess also admitted that he conspired with certain codefendants to violate the federal Anti-Kickback Statute by agreeing to pay, and actually paying, kickbacks to certain defendants for providing completed orders for foot baths using the templated order forms described above. Suess admitted that he and others caused these payments to be made knowing that the prescription drug orders that formed the basis for these kickback payments were not legitimate. Suess further admitted that he and other defendants made additional payments to third-party marketers to generate pharmacy orders for prescription drug products and medical equipment, including pain creams, skin products, and diabetic support products.
Finally, Suess admitted that he and other codefendants obstructed the government’s investigation into Sterling Pharmacy by coming up with a document that misrepresented Sterling Pharmacy’s compliance with the Anti-Kickback Statute and contained other false information. Suess admitted that this effort was purposefully calculated to thwart an investigation into the health care fraud and kickback scheme. The document, which was called a “marketing services agreement,” made it appear falsely that Sterling Pharmacy was paying MedX Marketing Solutions—a company belonging to Suess’s codefendant, Luis Salgado—on an hourly basis for legitimate marketing services, when in reality Sterling Pharmacy paid MedX illegal kickbacks for the referral of signed foot-bath order forms for individual beneficiaries.
Suess admitted that the health care fraud conspiracy generated over $700 thousand in profits through fraudulent foot bath orders from a private health insurance fund. Additional payments for foot baths were also generated from Medicare and prescription drug plans sponsored by Medicare. Suess agreed to pay restitution for fraudulent foot bath orders generated by the pharmacies named in the charges against him, including Sterling Pharmacy, DCE Pharmacy, and Motto Pharmacy.
Suess also admitted that he used a commercial property located in Wellington, Florida to facilitate his offenses and agreed, as part of his plea agreement, to forfeit that property to the United States. The property is currently estimated to be worth approximately $4 million.
The U.S. Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation investigated the case. Assistant U.S. Attorneys Ravi Romel Sharma and Sarah Lloyd are prosecuting the case.
The maximum penalty under federal law for conspiracy to commit health care fraud and conspiracy to violate the Anti-Kickback Statute is 10 years of imprisonment, a term of supervised release following imprisonment, and a fine, for each offense. A sentence following the finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.