Two former executives of a Louisiana compounding pharmacy have been found guilty of defrauding health benefits programs, including those for New Jersey state employees and the military. Christopher Kyle Johnston and Trent Brockmeier were convicted on March 10, 2025, following a six-week trial before U.S. District Judge Edward S. Kiel.
U.S. Attorney John Giordano announced that the pair conspired to commit wire fraud, health care fraud, identity theft, and money laundering through Central Rexall Drugs, a pharmacy in Louisiana known for preparing compounded medications. The fraudulent activities led to approximately $100 million in false insurance claims.
Johnston and Brockmeier took control of Central Rexall in 2013, aiming to expand its compounding business. They identified that certain insurance plans reimbursed significant amounts for specific compounded medications such as pain creams and vitamin combinations. The insurance plans affected included those covering New Jersey state employees and TRICARE for military personnel.
The duo manipulated medication ingredients to maximize reimbursements rather than meet patients' medical needs. They instructed employees to submit false prescription claims without valid doctor prescriptions using individuals' personal information from existing records.
To promote these medications, they employed sales tactics that included getting prescriptions signed without patient consent or knowledge, ordering refills unbeknownst to patients, paying patients to accept medications, and incentivizing doctors to prescribe them.
The fraudulent scheme resulted in Johnston receiving about $34 million and Brockmeier about $5 million in illicit profits. In total, 50 individuals have been convicted or pled guilty in connection with this conspiracy.
The charges carry significant penalties: up to 20 years imprisonment for health care fraud and wire fraud conspiracy; five years for identity theft conspiracy; and ten years for money laundering conspiracy. Sentencing is set for July 21, 2025.
Special agents from the FBI’s Atlantic City Resident Agency, IRS - Criminal Investigation, and the U.S. Department of Labor’s Office of Inspector General contributed to the investigation leading to these convictions.
Assistant U.S. Attorneys R. David Walk Jr., Daniel A. Friedman represented the government in court proceedings.
Defense attorneys involved were Lawrence S. Lustberg, Anne Collart, Andrew Marino for Johnston; Marc Agnifilo and David Gelfand represented Brockmeier.
