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NC couple pays $1 million to settle US military health insurance fraud claims

Robert F. Kennedy Department of Justice Building in Washington, D.C. in July 2012. (Another Believer/Wikimedia Commons)
August 15, 2021

The owners of a now-closed Orange County pharmacy have paid nearly $1.1 million to settle allegations they submitted false claims for payment to a military health program, the U.S. Justice Department said Monday.

David and Lois Tsui of Chapel Hill owned Wellcare Compounding, which was located on Elizabeth Brady Road in Hillsborough. In 2009, David Tsui was convicted of health care fraud and banned from participating in federal health care programs, according to a news release from the U.S. Attorney’s Office for the Middle District of North Carolina.

The $1,082,991.94 settlement announced Monday “is not an admission of liability or wrongdoing by Wellcare or the Tsuis,” the release said.

Federal prosecutors and the Defense Criminal Investigative Service accused the Tsuis of intentionally hiding David Tsui’s involvement in and ownership of the pharmacy, the release said.

The pharmacy falsely claimed that Lois Tsui was the sole owner when it submitted claims to the TRICARE program, a government managed health care program for military service members, between September 2014 and May 2015, the release said.

Those claims from Wellcare also involved kickbacks to physicians and “marketers” who provided the company with prescriptions and referrals for prescriptions, prosecutors said, and encouraged medically unnecessary prescriptions that included high-margin ingredients, which provided the company with higher federal reimbursements.

“This settlement sends a strong message that individuals who defraud federal health care programs cannot rely on the passage of time or the use of straw owners to conceal their wrongdoing,” Acting U.S. Attorney Sandra Hairston said. “We will continue to identify those who seek to seek to exploit federal programs for personal gain and will hold them accountable.”

David Tsui declined to comment about the allegations or the settlement when The News & Observer called him Monday afternoon.

Federal conviction, real estate holdings

Tsui was president of Dr. 2 Shoes, selling therapeutic shoes for diabetic patients, when he was convicted in 2007 on 43 federal charges, including wire fraud, health care fraud, and making false Medicare claims worth more than $500,000, the Burlington Times-News reported.

Tsui was sentenced in January 2009 to three months in federal prison and three years of supervised probation. He also was ordered to pay $731,307 in restitution, plus a $50,000 fine. Court documents show his probation ended in 2010.

Tsui has since bought shopping centers in Mocksville and in Burlington, the Times-News reported. Tsui said Monday that he still owns the Burlington Outlet Village — formerly the Burlington Manufacturers Outlet Center — at Interstate 85 and Maple Avenue, which he bought for $1.85 million in 2016.

N.C. Secretary of State records show that Tsui currently is the executive manager of Blue Empire LLC, a commercial property rental company that owns land in Orange County; the executive officer of Central Park Burlington LLC, a real estate business with several residential and commercial holdings in Alamance County, and an administrative member of DLT Holdings LLC, which owns his home in Orange County.

He also is listed as executive officer of real estate company East Empire Holdings LLC and president of Peak Medical Inc., a medical supply company. State records show Dr. 2 Shoes Inc. was dissolved in 2012.

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