Pharmacy CEO must pay $8.8 million in restitution

The former CEO of a Michigan pharmacy who spearheaded a scheme to restock and resell drugs retrieved from nursing homes and adult foster care homes has been ordered to pay $8.8 million in restitution.

In August, Kim Mulder of Kentwood Pharmacy was sentenced to 10 years on conspiracy to commit healthcare fraud. Mulder and more than a dozen pharmacy employees were accused of defrauding Medicare, Medicaid, and Blue Cross Blue Shield of Michigan of at least $70 million.

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According to prosecutors, the pharmacy employees sorted the returned drugs at off-site locations that included a strip mall office and in the basement of former chief pharmacist Lawrence Harden.   

In December, Harden received six years in prison and a $5,000 fine. He admitted his role in the scheme during sentencing. “I do accept full responsibility,” he told the judge. “I trusted Kim Mulder and I wanted to be something big and he gave me that.”

Richard Clarke, the pharmacy’s former director of sales, was sentenced to 14 years in prison. His sentence included time for a child pornography charge. Prosecutors said Clarke gave some of the drugs to a 16-year-old and then took pornographic pictures of the teenager.

Others implicated in the scheme included Jessica Veldkamp, pharmacy floor manager; Elizabeth Morgan, billing manager; Erin Rivard, staff pharmacist; Michelle Shedd, sales representative; Heather Harden, drug packer; and Gary Franks, distribution manager.

Last week, Chief U.S. District Court Judge Robert Jonker ruled that Mulder owes more than $8.8  million in restitution, which is 10% of the $88,207,085 in fraudulent sales the pharmacy made between 2006 and 2010.

Specifically, Judge Jonker ordered Mulder to pay $6,423,768.70 to Medicare; $1,823,681.50 to Medicaid; $58,014.50 to Indiana Medicaid; $475,083 to Blue Cross Blue Shield Michigan; and $40,160.80 to the Federal Employees Health Benefit Program.

The court has not ruled on what, if any, restitution Clarke and Harden will pay.