A former Army Ranger was sentenced to 51 months in prison by Federal Judge Sandy Mattice for his involvement in the “Cream Scheme” that saw him defraud insurors of almost $5.5 million. Billy Hindmon is one of five defendants who have been or will be sentenced because of health care fraud involving compounded creams that were billed to insurance for as much as $15,000 a jar.
“I do have the power to (give you a smaller sentence), but I’ve also taken an oath to do what is right. I like Mr. Hindmon, and he’s the kind of person I’d like to get to know,” said Judge Mattice. “But I have to put that aside, because giving him (a lighter sentence) because of that would be just as bad as me giving a harsher sentence to someone I didn’t like.”
Hindmon was found guilty of one count of conspiracy to commit health care fraud, 22 counts of wire fraud, one count of mail fraud, one count of health care fraud, two counts of payment of illegal remuneration (kickbacks), and two counts of receipt of illegal remuneration (kickbacks).
Hindmon is a former U.S. Marine who also had several tours as an Army Ranger in Iraq and Afghanistan. He later gained a master's degree in business from Bryan College in Dayton.
Defense attorney Gianna Maio asked for several changes to the presentence investigation report, which would have an effect on her client’s sentence. One of her objections centered around the point that he was not a leader in the conspiracy, and pointed to co-defendant Jayson Montgomery’s light sentence as a reference point for what Hindmon should receive. Judge Mattice objected to this.
“Mr. Hindmon was involved in this enterprise much earlier than Mr. Montgomery, and in the court’s view, had more knowledge of what the enterprise entailed, and had more understanding of how the MLM process worked,” said Judge Mattice. “In my opinion, the verdict reflects that. I found as part of the verdict, as is apparent by counts of conviction, he had sufficient knowledge and understanding to be involved in the overall healthcare fraud scheme originally devised by Mr. Wilkerson. I did not find the same thing for Mr. Montgomery.”
The court also found that there were “at least” 10 victims, and possibly more, who were harmed due to Hindmon’s actions. Judge Mattice and the prosecution also agreed Hindmon’s military service could be considered “heroic” and possible grounds for a lower sentence. However, the judge also said exemplary military service does not excuse criminal behavior performed after one has served.
“We’re not drawing moral judgement, we’re drawing legal judgement,” said the judge. “I don’t think he’s a bad person, but he did a bad thing and hurt people.”
The defense called witnesses to testify about Hindmon’s good character. One was a close friend and former co-worker.
“I think Billy was a big-picture guy, and felt that there was a need there from his military background for other service members,” said the witness. “I think Billy had a special place in his heart for fellow soldiers, and he was able to help them with alternatives that are out there that can be detrimental. I felt like he thought he could make a change and provide something that was less of a risk for those guys.
“The thought of his character being tarnished was tough on him. He wanted to be portrayed as someone who didn’t do something inappropriate willingly. He’s a great person and great guy. I think the world of him, and I know there’s a lot of people who depend on him. We need people more like Billy.”
When Hindmon was able to speak he said he had experience in the marketing world, and on the surface everything seemed legitimate. When he did have questions about the operation, Hindmon told the judge a lawyer assuaged those concerns.
“As a seasoned businessman, Michael Chatfield’s father (Hal Chatfield) questioned the legality of everything, so he acquired a healthcare attorney for everything,” said Hindmon. “My understanding, after talking to Michael, was that everything checked out. We all decided to set up a meeting with an attorney and get our questions answered. Although it was my understanding afterward that it was legal to compensate for the participation of the study, I later decided I did not like the idea of the study because I saw how it could be misconstrued.”
Hindmon also said he was not one of the leaders, telling the court he did not set budgets. He said the vision was to “get bulk chemicals to the military for pennies on the dollar, and I figured that was mechanisms to take care of the budget. I understand that people can look at a spreadsheet and say I was all about the money.”
He said that he recommended one chemical taken out of the cream when he was told it could possibly be harmful. He told the court he donated a “large portion” of the money he made.
“There used to be a lot of things that made up Billy Hindmon, but those things are probably gone forever,” said Hindmon. “Anything good I’ve done in my life has been buried under this trial, this indictment. In the past five years, I’ve gone from a confident man to someone with minimal self-worth. I have lost my drive, reputation, job, friendships, my potential wife, and my freedom. If anyone had warned me there was even a low probability of any of these things being taken away, I would have never marketed the compound.”
After this, Judge Mattice sentenced Hindmon to the prison time and recommended he take advantage of 500 hours of treatment for drug abuse. If he completes this program, Hindmon could have 12 months shaved off his sentence. He will be on probation for three years after release.
“There’s going to be life for you on the other side, and I have no reason to believe it’s not going to be a bright and successful life,” said Judge Mattice.“