Wednesday, March 11, 2026
OIG helped unravel a pharmacy’s kickback scheme
11 people in Texas were convicted of defrauding workers’ comp program through scam prescriptions
A scam involving compounded medications in Texas was crushed thanks to a decade-long case led by the USPS Office of Inspector General.
Compounding pharmacies collaborate with doctors to create custom medications to meet individual patients’ needs.
Agents with the office, also known as OIG, noticed one compounding pharmacy in Southeast Texas filing a disproportionate number of workers’ compensation reimbursement claims. These prescriptions were also extremely expensive, with billing jumping as much as 600 percent.
The fraud was orchestrated by the pharmacy owner and involved doctors, marketers and pharmacists who received kickbacks for prescribing, referring and compounding unnecessary prescriptions, often adding to the ruse by using unnecessary ingredients to inflate a drug’s price.
The OIG began investigating the case in 2014 and was joined by the FBI and the Defense Criminal Investigative Service as well as OIGs for the departments of Labor, Veterans Affairs, and Health and Human Services.
Eleven defendants eventually pleaded guilty, with four sentenced to time served and seven receiving a total of more than 17 years in federal prison. The defendants were also ordered to pay back more than $39 million.
The investigation helped the government prevent more than $75 million in future fraudulent payments and prompted the Labor Department’s Office of Workers’ Compensation Program to create a new security measure requiring health care providers to justify why a prescription is medically necessary.
“When health care providers, prescribers and marketers abuse the care of these employees and defraud the Postal Service and the U.S. government, the OIG will hold them accountable for their fraudulent actions,” said Tammy Hull, the Postal Service’s inspector general.
The OIG recently highlighted the case on its website.
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Milestones
Appointments, awards and retirements
Here’s a look at recent USPS leadership announcements
The Postal Service recently made the following managerial and supervisory announcements:
• David C. Belt was named legal strategy managing counsel. He previously served as legal policy and legislative advice chief counsel.
• Jerry Goddard, design and construction director, retired Feb. 27 after 40 years with the Postal Service. George B. Schramm III, design and construction manager, was named design and construction acting director.
• John H. McTigue was named Tampa, FL, Processing and Distribution Center’s acting plant manager. He previously served as Manasota, FL, Processing and Distribution Center’s plant manager.
• Janet L. Peterson, Southern Area’s labor relations acting dispute resolution team lead, will retire March 13 after 37 years with the Postal Service.
• Justin K. Zhu, technology acquisitions director, was named the chief information officer’s services director.
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