Red Springs Pharmacy Owner Pleads Guilty in Healthcare Fraud Scheme

NEW BERN, N.C. – James Craig Bell, 63, pleaded guilty today to conspiracy to defraud Medicare, North Carolina Medicaid, and private health insurers through his pharmacy in Red Springs that operated under the name Townsend’s Pharmacy.

“This defendant lined his own pockets with money intended to provide vital prescription drugs for the poor and disadvantaged,” said U.S. Attorney Michael Easley. “We will continue to investigate and prosecute shady schemes like this.”  

“Submitting false and excessive claims to Medicare and Medicaid undermines the integrity of federal health care programs and wastes valuable taxpayer dollars,” said Tamala E. Miles, Special Agent in Charge with the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG). “HHS-OIG works tirelessly along with our law enforcement partners to hold accountable perpetrators of federal health care fraud.”

“Medications are expensive enough without pharmacy owners defrauding Medicaid and ripping off taxpayers,” said Attorney General Josh Stein. “These resources are meant to help people get the care and prescriptions they need. I’m grateful for U.S. Attorney Easley and his office’s partnership with my Medicaid Investigations team to hold accountable health care providers who waste these resources.”

According to the criminal information and evidence summarized in Court, beginning as early as 2006 through July 2017, Bell, acting through Townsend’s Pharmacy, billed Medicare, Medicaid, and various private health plans for prescription drugs that were never actually dispensed by the pharmacy.  Bell conspired with his employee, Melisha West, 51, of Raleigh. West began independently running the pharmacy’s operations while Bell continued to knowingly profit from the fraudulent billing practices.  West pleaded guilty to Healthcare Fraud in January 2022 for her role in the scheme and her sentencing hearing is set for the January 3, 2023 term of court.  Bell had trained West and other employees on how to bill health care benefit plans for drugs that were not authorized or dispensed.  Bell also trained employees to falsely reauthorize a previously existing prescription from a licensed medical professional, and, how to falsely bill health care benefit programs as though a drug had been dispensed.

Bell pleaded guilty to Conspiracy to Commit Healthcare Fraud.  He faces up to 10 years in prison and a potential fine. Sentencing before United States District Judge Louise W. Flanagan is scheduled to occur early next year.

Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement after United States Magistrate Judge Robert Jones accepted the plea. The United States Department of Health and Human Services Office of the Inspector General and the North Carolina Medicaid Criminal Investigation Unit are investigating the case, and Assistant U.S. Attorneys William M. Gilmore and David G. Beraka are prosecuting the case.

Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 7:22-cr-107-FL.

###