Wayne Wilkerson is facing a sentencing range of 235-293 months for his role in the "Cream Scheme" in which prosecutors said private and U.S. military insurance programs were bilked out of millions of dollars.
His Gainesville, Fla., attorneys are asking instead that he get home confinement and then probation.
Wilkerson and four others who were found guilty by Judge Sandy Mattice were set to have been sentenced on Monday.
The sentencing has been delayed and it now will be held in Winchester, Tn.
The recommended sentencing range from the federal probation office for Wilkerson is based on a loss over $25 million, a scheme with 10 or more victims, a loss to a government agency in excess of $7 million, and his leadership role in the offense.
Attorneys Mark Thomas and Seth Schwartz said when Wilkerson and Brian Kurtz were setting up the operation they consulted multiple healthcare attorneys. They also relied on agreements with four different pharmacies, it was stated.
The scheme operated for nine months before insurors began halting payments for compounded medications after many had been billed at exorbitant rates.
The request for a downward sentencing variance for Wilkerson says, "The fast-expanding operation eventually outgrew compliance controls."
The attorneys said Wilkerson has lost both Karma Medical Spa and Top Tier Medical and was forced to sell his house and liquidate his assets in order to pay for his defense. Prosecutors said earlier that Wilkerson made over $14 million from the scheme.
Wilkerson has no savings and is living "paycheck to paycheck," it was stated.
The attorneys said he is considering filing for bankruptcy protection.
They said he has "endured having family and close friends testify against him. He lives with the guilt of pulling his soon-to-be-wife and close friends into legal jeopardy and he feels responsible for their current circumstances."
The attorneys said the crime could not be replicated because the compounded medications are no longer reimbursed.
It says Wilkerson now works for a real estate developer, who said taking him from his business would be "devastating" to the firm.
Other defendants, Kasey Nicholson, Michael Chatfield, Billy Hindmon and Jayson Montgomery, also are seeking home confinement or probation.
Attorney Brian O'Shaugnessy said Ms. Nicholson has been "financially devastated." He said she liquidated the last of her IRA to pay prior counsel. Ms. Nicholson’s commissions were $938,740, of which she paid $204,000 to Matthew Perkins.
Montgomery is facing 63-73 months and Hindmon 37-46 months. The judge is able to deviate from the sentencing range.
Chatfield raked in $5.4 million. Hindmon’s commissions were $1,031,296, and Montgomery’s commissions were $337,068.
Prosecutor Perry Piper said earlier that the government would be asking for forfeitures of illicit earnings from the defendants in the case in which individuals were recruited to order creams that were billed to insurance at rates up to $15,000 a jar.
Prosecutors Piper and Franklin Clark said Wilkerson made over $14 million from the scheme and Chatfield raked in $5.4 million. They said Chatfield also got $1.5 million for passing on his "book of business" to Jimmy Collins. Collins and his wife, Ashley, formerly lived at Birchwood, but moved to San Diego. They were also arrested in the healthcare fraud and are awaiting trial. Ashley Collins asked to be tried separately, but that motion was denied.
They said insurance companies and Tricare paid a total of roughly $35 million for the compounded medications in the locally-based scheme. Private insurance paid roughly $22 million for prescriptions written by Candace Michele Craven, Toni Dobson, and Suzy Vergot.