Two face sentencing in test strip fraud

MIAMI – Two South Florida men recently pleaded guilty to conspiracy to commit health care fraud for their role in a diversion scheme involving the distribution of adulterated and misbranded diabetic test strips.  

Howard Neil Frank of Marco Island, Fla., owner of two diabetic test strip wholesale businesses, Wholesale Diabetic Supplies Inc and HMF Distributing Inc, and Perfecto Fermin Hallon of Miramar, Fla., former president of another diabetic test strip wholesale business, Medical Care Supplies Inc, acquired the diabetic test strips through illegal importations, theft, or by buying the diabetic test strips from patients who obtained prescriptions but chose to sell rather than use them. 

The wholesale company owners then sold the adulterated and misbranded diabetic test strips to licensed retail pharmacies, some of which they also owned. These licensed retail pharmacies sold the adulterated and misbranded diabetic test strips to patients who did not know their real source. In turn, these licensed retail pharmacies then submitted claims for reimbursement through private and government health benefit plans as retail diabetic test strips. 

To deceive auditors and inspectors, Frank and Hallon altered invoices, purchase orders and shipping records, counterfeited National Drug Code (NDC) numbers, bar codes and accompanying labeling, to appear like they had acquired the diabetic test strip from legitimate manufacturers. 

Hallon’s sentencing hearing is scheduled for May 29 in West Palm Beach. He faces up to 10 years in prison. Frank’s sentencing hearing is scheduled for Aug. 2 in West Palm Beach. He faces up to 10 years in prison. 

To date, four defendants have been indicted in connection with this scheme. In 2021, Mohamed Mokbel was charged with conspiracy to commit health care fraud. The trial is scheduled for October in West Palm Beach. Mokbel is also charged with health care fraud and money laundering in the Southern District of Texas. The trial is scheduled for August in Texas. In 2022, Jason Grama, who pleaded guilty to conspiracy to commit health care fraud, was sentenced to three years supervised release and ordered to pay almost $300,000.