Feds’ kickback complaint against Florida pharmacy snags L.A. equity firm founded by Richard Riordan


The Department of Justice has accused a Florida pharmacy — and the Los Angeles private equity firm that owns it — of bilking a military healthcare program out of millions of dollars by pushing unneeded vitamins and creams.

In a filing in federal court in Miami, federal prosecutors said compounding pharmacy Patient Care America billed military healthcare program Tricare for more than $68 million in prescriptions over an eight-month period in 2014 and 2015.

Those payments, prosecutors allege, were tainted because PCA paid kickbacks to marketers who pushed unnecessary prescriptions, worked with doctors who wrote prescriptions without examining patients and illegally paid patients’ copays to encourage them to fill unneeded prescriptions.


The complaint alleges that two PCA executives and private equity firm Riordan Lewis & Haden knowingly submitted fraudulent claims to Tricare, which provides healthcare to members of the military and their families.

PCA, based near Fort Lauderdale, is owned by Riordan Lewis & Haden, a Westwood firm founded by former Los Angeles Mayor Richard Riordan.

Though the firm still bears the former mayor’s name, he has long been retired and, according to public filings, no longer has a financial interest in the firm.

Managing director J. Christopher Lewis said the firm has cooperated with federal investigators “but disputes the basis of the lawsuit” and “did not violate any law.”

Federal prosecutors filed the complaint last week, joining a lawsuit filed in 2015 by two former PCA employees who first alleged the kickback scheme.

When Riordan Lewis acquired a majority stake in PCA, then known as Diabetic Care Rx or DCRX Infusion, in 2012, it specialized in making treatments for patients with kidney disease.


After the acquisition, though, the company expanded into making pain creams because they were dramatically more profitable, according to last week’s complaint.

Prosecutors are suing under the federal False Claims Act, a law that allows the government to seek payment of three times its actual damages. If prosecutors prevail and show PCA and Riordan Lewis improperly billed for $68 million in bogus prescriptions, it could lead to a payout of more than $200 million.

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2 p.m.: This article was updated with a comment from J. Christopher Lewis, managing director of Riordan Lewis & Haden, and with more details from the complaint.


This article was originally published at 12:05 p.m.