FBI raids popular Lovelace Drugs in downtown Ocean Springs
When Clark Levi, the owner of Lovelace Drugs, bought out his partners at Alvix Laboratories LLC, he promised to share future profits with them if the company grew, one of the former partners claims in a lawsuit.
Instead, Levi allegedly hid those profits from former partner Ken Ritchey by creating shell companies to avoid showing that Alvix Labs was making more money, Ritchey’s lawsuit says.
Ritchey, a pharmaceutical wholesaler who developed the Ritchey building in downtown Ocean Springs, had expected to receive a minimum of $3.3 million and a maximum of almost $10 million in exchange for giving up his ownership interest in Alvix and releasing Levi from any potential claims.
Ritchey didn’t receive the money.
He made the allegations in a federal lawsuit alleging Levi and other unnamed co-defendants breached its contract over the sale of Alvix Labs.
He is suing for the $10 million he says Levi owes him and damages for emotional and mental distress plus attorney’s fees and other expenses incurred as a result of the litigation.
Ritchey’s attorney, Christopher Van Cleave, declined to comment.
In the lawsuit, Levi and Alvix deny any wrongdoing and say Ritchey is not owed any money.
“We are vigorously defending this lawsuit, and look forward to its ultimate dismissal,” Levi’s attorney, Josh Danos, said Thursday. “Beyond that, I can offer no substantive information.”
A convicted felon
The suit names various individuals who allegedly conspired with Levi to hide the true profits of Alvix Labs, including convicted felon Glenn “Doyle” Beach Jr., of Sumrall.
Beach was owner and managing partner of the the now-defunct Advantage Pharmacy, one of the pharmacies raided during a statewide investigation into healthcare fraud in January 2016.
In March, Beach pleaded guilty to federal charges for his role in a scheme that centered around the production of medically unnecessary compound pain creams that cost as much as $10,000 per prescription. Federal investigators say conspirators in the scheme compounded drugs for maximum profits rather than the health of their patients.
The fraud bilked insurers, such as the military’s TRICARE and United Health Care of Mississippi, out of over $400 million.
In the pending lawsuit, Beach and Levi are identified as individuals who have benefited financially from the profits from Alvix Labs.
Benefits, bonuses and fees
The lawsuit points to suspicious payments to Beach and Levi during their work together in Alvix Labs.
Specifically, the suit says Alvix Labs was paying monthly bonuses to Levi and Beach and making other substantial payments to both men for “undefined consulting fees.”
For example, Beach received a $63,180 bonus in May 2016, the same month Doyle Beach Consulting received another $296,340 for “consulting” fees.
Though Beach has admitted his involvement in the healthcare fraud scheme, Levi and Ritchey have not been accused of any criminal wrongdoing.
However, state and federal agents raided Lovelace Drugs in downtown Ocean Springs last month, seizing various records from the pharmacy.
Levi owns Lovelace Drugs, also previously known as Garden’s Pharmacy.
Since the raid at Lovelace, a federal grand jury has indicted four more in the healthcare fraud case.
Those charged in a 15-count federal indictment this week are Dr. Shahjahan Sultan, 37, of Madison, and Thomas Edward Sturdavant, a doctor from Kingsport, Tennessee, who has a Mississippi medical license, along with registered nurses, Freda Cal Covington, 54, of Hattiesburg, and Fallon Deneem Page, 36, of Soso.
According to indictment, the unnamed Ocean Springs pharmacy that filled the medications prescribed by the Sultan and Sturdavant received over $7 million in reimbursements from health care providers.
According to the Secretary of State’s Office, Sultan had an office on Government Street in Ocean Springs in the past that included a construction business as well Pittsburgh Medical Marketing of Ocean Springs, LLC.
Sultan was also affiliated with Medical Solutions Of Ocean Springs, LLC, The Oak Room, LLC, and Sultan Construction of Ocean Springs, LLC, all of which have since dissolved.
Sturdavant had others businesses — Total Rehabilitation Solutions, LLC, AT&T Investments, LLC and Magnolia Medical Consultants LLC — all in Biloxi, though the businesses have since been dissolved.
The indictment also mentions that there are three unnamed co-conspirators, all of which are allegedly connected to Pittsburgh Medical Marketing, the Ocean Springs-based business that Sultan owned.
The investigation involving Sultan and Sturdavant and the two nurses is ongoing, with more indictments expected in the case.