Seven charged in foot bath scheme centered on Jermyn pharmacy

Federal authorities formally charged seven people with orchestrating a medical fraud scheme with a Jermyn pharmacy at its center that bilked insurers out of hundreds of dollars.

Between 2019 and 2020, the individuals billed insurance companies for “foot baths,” which purported to be antibiotic and antifungal foot soak treatments where individuals would mix a variety of drugs with warm water in a plastic tub, according to United States Attorney Gerard Karam. Many of the orders were routed through Sterling Pharmacy in Jermyn, owned by Melissa Driscoll, 43, of East Stroudsburg.

Two Florida men, Frank Suess, 78, and Victor Velazco, 35, had people become owners of pharmacies across the country to conceal their involvement in the operation, with Driscoll purchasing Sterling Pharmacy from Suess, according to the indictment.

It says that Driscoll misrepresented how Sterling Pharmacy did business by concealing its mail order operations from suppliers, claiming it had verified patient prescriber relationships before filling prescriptions and creating false business records.

In addition, Suess, Velazco and Driscoll produced false documents saying the pharmacy had a business relationship with MedX Marketing Solutions, which was supposed to market the pharmacy’s offerings. Instead, according to the indictment, the pharmacy paid the company, owned by Luis Salgado, 50, of Naperville, Illinois and Davenport, Florida, kickbacks for the referral of signed foot bath orders.

Patient recruiters, which included a diabetic shoe salesman who worked at a mall in Scranton and individuals who set up a health fair in New York, got people to sign orders that were then approved by Diana Casto, 53, a podiatrist in Brooklyn, New York, who authorities said used another medical provider’s National Provider Identifier without their knowledge, according to the indictment.

Two other Florida men, Warren Pizik, 68, and Dave Singh, 37, assisted Salgado with marketing Sterling Pharmacy’s mail order business and setting up out-of-state pharmacy licenses.

Authorities allege Driscoll, through Sterling Pharmacy, paid MedX $312,192 in kickbacks and Pizik $22,000 in kickbacks for MedX referrals. She also paid Suess and Velazco’s companies more than $1 million in additional kickbacks. One health insurance fund paid $685,000 in claims.

The seven were indicted on charges of conspiracy to commit health care fraud and multiple counts of health care fraud, with Suess, Driscoll and Velazco also charged with conspiracy to obstruct a criminal investigation into health care offenses and falsification of records and information with the intent to obstruct a federal grand jury investigation. Authorities said Suess, Salgado, Driscoll, Velazco and Pizik conspired to violate the federal anti-kickback statute.