For a South Florida pharmacist, Serge Francois was living large.
His crib was a French-style chateau that once belonged to Hollywood megastar Dwayne “The Rock” Johnson. And his ride, on any given day, was a Rolls-Royce, Ferrari or Lamborghini.
But Francois did not make his small fortune because of some entrepreneurial success. Instead, a federal jury found, he ripped off tens of millions of dollars from a U.S. military health insurance program, TRICARE.
On Friday, a Miami federal judge sentenced Francois to 17 years in prison as the mastermind of a conspiracy to commit healthcare fraud and to pay kickbacks to doctors and marketing companies for referrals of patients who did not need costly prescription drugs under the military program. TRICARE provides medical coverage to 9 million members and veterans of the nation’s military services.
It’s a system built on trust, which made TRICARE vulnerable to the seasoned Francois, 52, former owner of Pompano Beach-based Atlantic Pharmacy. He was convicted at trial last September and has been in custody since his arrest in November 2016.
“His business was founded on a lie. Every morning he got up and decided, ‘How much money am I going to make?’ ’’ prosecutor Daniel Bernstein said, pointing to Francois’ purchase of the movie star’s former estate in Southwest Ranches and the fleet of luxury cars. “He did not care about patient safety.”
U.S. District Judge Darrin Gayles agreed to an extent with the prosecutor, saying “the fraud was not a mistake; it was purposeful.” But Gayles disagreed with Bernstein’s recommended sentence of 22 years, the midpoint of a federal guideline range for Francois’ punishment. Francois’ defense attorney, Sean Ellsworth, recommended 19 1/2 years. But he also mentioned that a prominent West Palm Beach eye doctor, Salomon Melgen, was convicted in a larger fraud scheme against Medicare and recently sentenced to 17 years.
Gayles settled on that number, saying it was “appropriate” for Francois’ prison time.
At his sentencing, Francois, along with his wife, sought leniency. “I have made a lot of mistakes,” he told the judge. “This experience has been devastating to me.”
Francois, who was called “POTUS” (President of the United States) by fellow workers at Atlantic Pharmacy, was not the only defendant. Also standing trial: Francois’ “chief of staff,” Patrick Tonge, 41, a former car salesman who managed Atlantic Pharmacy and processed TRICARE claims.
Tonge was sentenced to 15 1/2 years for his supporting role in the conspiracy to defraud the military program. But, in an unusual speech to the judge, Tonge refused to accept responsibility for his crime and blamed the fact that he is a black man in America for being prosecuted. Gayles, who is black, reprimanded the defendant for using race as an excuse for his wrongdoing.
According to trial evidence, Atlantic Pharmacy billed the government program for $37 million in fraudulent claims for compounded medications such as pain creams that were not necessary and not properly prescribed between 2010 and 2015. Compounds are specially mixed medications unlike typical commercial drugs. TRICARE ended up paying out $31 million in the scheme, which is similar to the Medicare rackets that have plagued South Florida for more than a decade.
On Friday, Judge Gayles ordered both Francois and Tonge to repay the U.S. government program for its loss, a form of punishment that is largely symbolic since neither has any real money.
With the proceeds from the TRICARE payments, Francois purchased Johnson’s 10,000-square-foot, French-style chateau in Broward’s Southwest Ranches community for $3.6 million in 2015. He bought it from Y100 radio host “Mobile Mike,” who had acquired it from The Rock, a one-time University of Miami football player turned professional wrestler turned Hollywood leading man. Francois also acquired a Rolls-Royce, a Ferrari, a Land Rover, a Lamborghini, a Cadillac Escalade and a Mercedes-Benz.
Since his arrest more than a year ago, Francois was detained without bond in a tiny jail cell in downtown Miami, a stark contrast to his six-bedroom, six-bathroom estate on two-plus acres in exclusive Landmark Ranch Estates. Records show he has not paid more than $150,000 in property taxes over the past two years. With his conviction and sentencing, Francois will lose his home, a nearby vacant lot, as well as the luxury cars and other tainted assets.
Francois was one of 14 defendants implicated in the Atlantic Pharmacy case. Almost all of them, including four South Florida doctors, pleaded guilty.
Francois, a U.S. citizen born in Brooklyn and a licensed Florida pharmacist for 20 years, had overcome a previous federal prosecution almost a decade ago. But this time, Francois could not survive the prosecution’s pile of incriminating evidence, including cooperating witnesses, falsified paperwork and lists of prescription-drug orders with his initials on them.
Bernstein, who worked on the case with fellow prosecutor Frank Monsour, accused the defendant of lying again and again on the witness stand at his trial. During Friday’s hearing, Bernstein said: “He admitted nothing and denied everything.”