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Hagerstown pharmacist and owner of Russo's Rx pleads guilty to health care fraud

June 14, 2013
  • David M. Russo
File photo

A Hagerstown pharmacist pleaded guilty Friday in federal court in Baltimore to fraudulently selling powerful pain killers and billing Medicare and Medicaid for nearly $200,000 of the cost, the U.S. Department of Justice said.

David Russo, 62, pleaded guilty in U.S. District Court to health care fraud, according to a Justice Department news release issued Friday afternoon.

Russo admitted that he filed prescriptions for oxycodone, methadone and benzodiazepines that he knew were “outside of the legitimate medical course,” and billed Medicare and Medicaid, authorities said.

The fraudulent conduct occurred while he was the owner of Russo’s Rx at 25 N. Cannon Ave. from January 2009 to December 2010.

Russo made gross sales of $700,000 a month for several months in 2010, which was a dramatic increase over previous months, the  release said.

Law-enforcement officials said he also made at least 55 cash deposits totaling $862,000 from Dec. 1, 2009, to June 15, 2010.

Russo took in so much money that he kept a cash-counting machine at the pharmacy, authorities said.

“The sheer number of prescriptions for oxycodone and methadone indicated that the prescriptions were not valid,” the release said.

Russo also accepted cash for oxycodone and methadone, which are known as Schedule II drugs, when they were not covered by Medicare and Medicaid, according to investigators.

“Another indicator that Russo knew the prescriptions were not for a legitimate medical purpose is that he ‘split’ prescriptions, accepting an amount of cash at the time of a transaction and then accepting the remaining amount at a later time,” the release said.

“Russo also filled two prescriptions for a Schedule II drug on the same day for the same patient but charged one to insurance and accepted cash for the other.”

The investigation revealed that customers would call ahead of time to ask Russo if he had oxycodone and how much it would cost, authorities said.

Customers traveled from out of state or in van loads to the pharmacy, sometimes receiving cocktails of oxycodone, Roxicodone and Xanax, which are known to be extremely dangerous when combined because of severe side effects and potential for abuse and addiction, investigators said.

In December 2010, the Drug Enforcement Administration executed a warrant at the pharmacy and seized $39,000 in cash that was accumulated from the sale of oxycodone, methadone and benzodiazepines, the release said.

Russo also deleted thousands of unlawful prescriptions from prescription database, authorities said.

From Jan. 1, 2009, to Dec. 31, 2010, Russo’s Rx fraudulently dispensed more than 700,000 dosage units of oxycodone and 117,000 dosage units of methadone, the release said.

The vast majority of other invalid prescriptions were for benzodiazepines and other Schedule II narcotics.

“For all these prescriptions, Russo improperly billed, and received payment for, over $109,207.26 to Medicare and at least $90,939.07 to Medicaid, with a total approximate loss of $200,146.33,” the release said.

As part of his plea agreement, Russo will have to pay restitution in the full amount, and forfeit the $39,000 in cash that was seized from the pharmacy in 2010.

Russo faces a maximum 30 years in prison, but the government and Russo have agreed to jointly recommend a 30-month sentence, the release said.

The sentencing has been scheduled for Aug. 22.

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