A Fort Myers doctor has admitted to defrauding taxpayer-supported Medicare and Tricare by receiving kickbacks for prescribing certain durable medical equipment and pain medications.
Dr. Michael Frey pleaded guilty in federal court Friday to taking more than $470,000 in illegal payments from the supplies and pharmacy businesses between 2010 and 2016, court documents show.
Investigators say Frey, a physician with Advanced Pain Management & Spines Specialists, paid medical supplier A&G Spinal Solutions LLC $50,000 to put his wife on their payroll and give her 10 percent of the profit stemming from equipment referrals Frey made to them.
According to related court documents, co-conspirators Ryan Williamson and William Pierce, managing partners in the supply business, needed the money to pay a tax bill of that same amount. Both have pleaded guilty to their roles in the scheme.
Frey also put together a similar arrangement with an unnamed co-conspirator to receive a share of prescription sales, court records show.
Finally, between 2013 and 2015, Frey received kickbacks from sales representatives and other employees of Insys Therapeutics Inc. to receive fees for his participation in “largely bogus” Insys speaker event programs.
Arizona-based Insys’ primary pharmaceutical product is Subsys, a form of the powerful opioid, fentanyl, that is only legally prescribed to cancer patients.
Frey's attorney in Miami, Ryan Stumphauzer, declined to comment.
Frey has a 49 percent stake in Advanced Pain Management & Spines Specialists, located at 8255 College Parkway in south Fort Myers, state records show. Dr. Jonathan Daitch owns 51 percent of the business.
Daitch did not respond directly to an interview request. Through a local public relations firm, he released a written statement denying knowledge of, or financial gain from, Frey's activities.
The statement also said that Frey had resigned from the practice and agreed to give up all shares in it.
"Additionally, it's important to note that patients were not over-billed by the practice, Dr. Frey or any providers," the statement reads. "Dr. Frey, personally, received kickbacks as alleged in the plea agreement but there was no financial benefit to the practice."
The two federal charges to which Frey pleaded guilty each carries a maximum sentence of five years' imprisonment and fines of up to $250,000.
As part of his deal with federal prosecutors to get a reduced sentence, Frey agreed to fully pay back the $472,112.88 he received in kickbacks and to cooperate with the investigation into others who may have been involved.
A sentencing date for Frey has not yet been scheduled.
The U.S. Attorney's Office did not comment on the case Wednesday and would not say if additional individuals are expected to face criminal charges.
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