Health Fraud Case: Mississippi Pharmacy Owner Gets 18 Years

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HATTIESBURG—A Mississippi owner of pharmacies and pharmacy distributors has been sentenced to 18 years in prison and ordered to repay the government nearly $287.7 million for his part in what prosecutors described as a $510 million health care fraud involving high-priced pain cream.

Wade Ashley Walters, 54, of Hattiesburg, also was ordered at Friday’s sentencing to forfeit nearly $56.6 million that he gained personally from the scheme, according to a news release from the U.S. Attorney’s Office.

Walters had been charged in a 37-count indictment. He pleaded guilty in July to one count each of conspiracy to commit health care fraud and conspiracy to commit money laundering. Sentencing was conducted Friday by U.S. District Judge Keith Starrett.

“The fraud committed by Walters and others in this investigation wasted hundreds of millions of taxpayer dollars and deprived individuals of needed medical care,” said David P. Burns, Acting Assistant Attorney General of the Justice Department’s Criminal Division.

He called it a “significant sentence” and said prosecutors and their agency partners are committed to rooting out health care fraud schemes and bringing those responsible to justice.

Between 2012 and 2016, Walters orchestrated a scheme to defraud Tricare, the insurance program for U.S. military, veterans, and their families, and private health insurers by distributing compounded medications that were not needed, prosecutors said.

Walters said he objected to being called the kingpin of what is most likely the state’s largest fraud case, saying he didn’t start the fraud but got involved once it had begun, the Hattiesburg American reported.

Starrett, however, told Walters the fraud would never have gotten so big if it had not been for Walters’ involvement, “not nearly to the extent that it was.”

“You organized and orchestrated the fraud by your management skills,” Starrett told Walters. “You involved so many people — good people. Maybe they would not have been involved if they hadn’t been recruited.”

On Friday, Walters apologized for his actions, saying he didn’t really know what he was getting involved in until it was too late and his pride would not let him back out.

“By then the stakes were too high,” he said. “I thought I should get out of it. I regret that I didn’t see that right away.”

He also apologized to his family and friends for causing them pain and embarrassment.

“I’m tired,” he said. “I’m ready to move on and serve my time.”

Walters was taken into custody immediately following the hearing.