Two men charged with criminal activity in connection to a compound pharmacy scheme pleaded guilty Tuesday in federal court before U.S. District Judge Keith Starrett.
Jason May, 40, a pharmacist from Lamar County and co-owner of Advantage Pharmacy — one of several named in a civil forfeiture, was charged July 12 with one count of conspiracy to defraud the U.S. government.
Gerald “Jay” Schaar, 47, of Biloxi also was charged July 12. He was charged with one count of attempt and conspiracy.
The scheme allegedly bilked the government, insurance agencies and individuals out of more than $400 million.
May and Schaar admitted their roles in the scheme, with May admitting to handling around $192 million of the fraudulently obtained money received from TRICARE and other health care benefit providers through his pharmacy by issuing “high-heeled compounded medications” that were expensive and deemed not medically necessary.
May also admitted to laundering around $400,000 by transferring funds between various banks.
Schaar admitted to receiving kickbacks for helping “Pharmacy 1” fraudulently obtain around $2.2 million in reimbursements from TRICARE, the Department of Defense’s military health care system.
Neither man spoke except to answer Starrett’s questions. May stood facing forward looking at Starrett, occasionally comforted by his attorney Ed Kirksey. Schaar appeared to be nervous, looking down, his voice barely audible in court.
Starrett was satisfied May and Schaar understood their charges and their pleas were made without duress. He set their sentencing date for Oct. 17 at William M. Colmer Federal Courthouse in Hattiesburg.
Assistant U.S. Attorney Mary Helen Wall represented the government in the plea proceedings. She said the government also is seeking forfeiture of any and all May’s and Schaar’s properties that may have been directly or indirectly obtained from their crimes.
Since January 2016, millions in cash and property had been claimed by civil forfeiture, but until this month no criminal charges had been filed.
Although Wall early in the proceedings recommended a $10,000 bond, Starrett set May’s and Schaar’s personal surety bonds at $25,000 each, which means the men will be able to remain free until sentencing unless either violates the terms of his release, at which point the $25,000 would have to be paid to the court and the offender taken into custody.
May faces up to five years in prison, a $250,000 fine and three years of post-release supervision. Schaar faces up to 10 years in prison, a $250,000 fine and three years of post-release supervision.