OS pharmacy wanted nearly $1M back from FBI raid. Here’s how appeals court ruled.
The 5th U.S. Circuit Court of Appeals has upheld a Gulfport federal judge’s decision to deny the return of $895,740 seized from a bank account connected to an FBI raid at Lovelace Drugs in Ocean Springs.
The government took possession of the money from an account in the name of Alvix Laboratories, LLC., also in Ocean Springs, whose listed signatories at the time were the late Clark J. Levi and Hugh Ferry.
Alvix argued the federal government was not entitled to all the money because only a little over $500 came from proceeds from an account in the name of Garden’s Pharmacy, that was later renamed Lovelace Drugs.
Garden’s and Alvix had previously been in a partnership together.
The judge ruled the forfeiture would stand because it was seized from an account connected to the late Clark Levi, and Garden’s Pharmacy, or Lovelace Drugs, as a warrant issued over alleged criminal wrongdoing.
Prior to the death of Levi and his wife in a car crash in October 2019, Levi had moved Garden’s Pharmacy to South Washington Avenue in Ocean Springs and renamed it Lovelace Drugs.
The seizure from the Alvix account and a Garden’s Pharmacy account occurred a day after the May 30, 2019, raid of Lovelace Drugs on Washington Avenue in downtown Ocean Springs.
The signatories on the Garden’s Pharmacy account were S. Kelly Levi, D.B. Levi, Jeffrey Wayne Rollins and Dempsey Levi.
The FBI raided the pharmacy in connection with an investigation into a multi-million healthcare fraud scheme involving expensive compound pain creams and weight-loss drugs.
Attorneys for Alvix Laboratories did not respond to requests for comments.
The government had obtained a judge’s authorization to seize the funds from two bank accounts, the one belonging to Alvix, and the other to Garden’s Pharmacy.
The seizure occurred in the aftermath of federal investigation into an arrangement between Garden’s Pharmacy — and Levi — and Shahjahan Sultan.
Levi — through Garden’s Pharmacy — allegedly agreed to pay healthcare kickbacks to Sultan for promoting and prescribing expensive compound pain creams and weigh-loss pills.
Sultan, Dr. Thomas Edward Sturdavant, of Kingsport, Tenn., and two nurses, Fallon Page, of Soso, and Freda Covington, of Hattiesburg, were each charged in the 15-count federal indictment accusing them of various charges, including healthcare fraud, mail fraud, paying and receiving healthcare kickbacks and other charges.
All four admitted committing the crimes in Jones County, and in Jackson County — through their relationship with Garden’s Pharmacy, or Lovelace Drugs
In many cases, according to federal prosecutor Kathlyn Van Buskirk, the doctors prescribed the medications after video consultations and or without any examination at all.
The nurses admitted falsifying patient’s medical records, in some cases, so that TRICARE, the federal funded insurance program for the U.S. military and other health insurers, and other insurers approved the costly reimbursements, some of which were up to $10,000 each.
In some of the cases, a nurse would meet the potential clients in public parking lots and even playgrounds.
Sultan and Sturdavant together admitted writing 8,000 prescriptions and received the kickbacks for doing so.
The four defendants have pleaded guilty and all but one has been sentenced.
Levi was not indicted on any charge prior to his death.
Federal civil forfeitures have become a hot topic in the aftermath of George Floyd’s killing and calls for police reform nationwide. They pave the way for authorities to seize property and cash believed to be derived from illegal activity, even if criminal charges are never filed in a case.
This week, U.S. Sen Rand Paul, R-Ky, introduced the Fifth Amendment Integrity Restoration Act that would result in sweeping changes in federal civil forfeiture laws.
