Does anyone know anything about this company? I know they have been around for some time, but really what is their track record?
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Guaranteed Returns/Devos
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Terrible! They Lie, Cheat, and Steal! Just Google them to find all the lawsuits they are in... I recommend PharmaLink in Florida. www.PharmaLinkinc.com
U.S. v. Devos Ltd., D/B/A Guaranteed Returns, et al
Docket Number 14-cr-00574
Brief description of the case:
Defendant Devos, Ltd. (a/k/a Guaranteed Returns) managed pharmaceutical product returns for both private and public healthcare provider clients. Pharmaceutical manufacturers frequently allow health care providers to return expired drugs for a refund. The indictment charges that Guaranteed Returns promised clients that it would hold their “indate” (not yet expired) drug products until expiration, and then return them on clients’ behalf, in exchange for a fee. According to the indictment, Guaranteed Returns instead stole a significant portion of its clients’ “indate” drug products; returned the drugs to the manufacturers; and kept the resulting refund money for itself and its CEO Dean Volkes. Through fraud, Guaranteed Returns allegedly stole more than $180 million. This fraudulent activity occurred from approximately 1999 to on or about October 28, 2014.
Press Release
Attachments:
Download Superseding Indictment
Download victim_impact_statement.docx
Download devos_survey_form_template_form_fillable.pdf
Updated October 17, 2016
Brief description of the case:
Defendant Devos, Ltd. (a/k/a Guaranteed Returns) managed pharmaceutical product returns for both private and public healthcare provider clients. Pharmaceutical manufacturers frequently allow health care providers to return expired drugs for a refund. The indictment charges that Guaranteed Returns promised clients that it would hold their “indate” (not yet expired) drug products until expiration, and then return them on clients’ behalf, in exchange for a fee. According to the indictment, Guaranteed Returns instead stole a significant portion of its clients’ “indate” drug products; returned the drugs to the manufacturers; and kept the resulting refund money for itself and its CEO Dean Volkes. Through fraud, Guaranteed Returns allegedly stole more than $180 million. This fraudulent activity occurred from approximately 1999 to on or about October 28, 2014.
Press Release
Attachments:
Updated October 17, 2016
Gr will be found not guilty. The systems that are in place are correct. Payments have always been paid to the agreement terms. Gr is the best provider in the industry. Most customers have stayed with them because they are a professional company.
Drug Return Co. Loses Bid To Trim $116M Diversion Case
By Dani Kass
Law360, New York (January 11, 2017, 4:47 PM EST) -- A Pennsylvania federal judge on Tuesday shot down attempts by Guaranteed Returns to remove a money-laundering charge and suppress evidence from litigation alleging the company — which helps the government and providers return expired drugs — stole $116 million worth of refunds from pharmaceutical manufacturers.
Chief U.S. District Judge Petrese B. Tucker denied all six of Guaranteed Return’s pretrial motions in a 55-page order, finding the government had presented enough evidence to justify two sets of warrants the company was trying to suppress and allege a diversion scheme, which included money laundering. The trial is set to start on Jan. 30.
Devos Ltd., which conducts business as Guaranteed Returns, its CEO, Dean Volkes, and two other employees were charged in October 2014 with implementing a scheme to divert drug company refund money away from those who originally purchased the drugs and into its own accounts. Those purchasers include health care providers, the U.S. Department of Defense, the U.S. Department of Veterans Affairs and the Federal Bureau of Prisons.
Guaranteed Returns first tried to suppress evidence stemming from two sets of search warrants, arguing that they were too general to be legal and then that the warrants were issued without a factual basis to support finding probable cause.
Judge Tucker said under the Third Circuit's decision in U.S. v. Yusuf, the warrants weren't too general, as they were limited to specific federal crimes, a specific time period and specific parties. In addition, a magistrate judge made handwritten edits that narrowed the warrants further.
The warrants were backed up by plausible allegations of wrongdoing, including testimony from former employees and corroborating documents, the district judge said. Even though the alleged crime was more than 10 years old, the government presented sufficient evidence that it was continuous, she said, turning down arguments that the claims were stale.
“The magistrate judge’s finding of probable cause was reasonable, pragmatic, and sufficiently supported in view of the complex nature of the alleged crime,” the order states.
Another motion asked to dismiss one of the case’s 59 claims, which alleged a conspiracy to commit concealment money laundering. Guaranteed Reform said the government’s allegations for this count, even if proven true, don’t prove illegal activity. The judge didn’t agree, saying if the claims are true, the scheme would be illegal.
Among Guaranteed Returns’ other requests were a motion for a bill of particulars, which Judge Tucker said was unnecessary. The company doesn’t need specific victim or conspirator names, transaction details or other specific information to defend itself, she said. Discovery was extensive and the indictment provided more details than the government legally had to provide.
“The allegations set forth in the superseding indictment supports the conclusion that defendants are fully capable of determining the client victims and transactions at issue,” the order states.
Judge Tucker also refused to remove notices of lis pendens on four properties and two financial accounts seized during the search warrants. The notices on the property are accurate, as they alert prospective buyers that the land is subject to pending litigation. There is also enough evidence that the seized bank accounts may have been “involved in” or “ traceable to property” involved in money laundering, she said.
The U.S. Attorney’s Office declined to comment on the order. Counsel for Guaranteed Returns didn’t immediately respond to request for comment.
Prosecutors brought the case in 2014, alleging a multi-year scheme against the return company.
When health care providers purchase too much of a specific pharmaceutical, they can return it for a refund. That process, however, can become complicated because providers often purchase drugs from many distributors. That's where companies like Guaranteed Returns come in. They contract to do the returns in exchange for a fee.
Some of the drugs cannot be returned until they expire, so drug return companies offer to hold the medicine, called indated drugs, in warehouses during the waiting period.
Guaranteed Returns did this work for a number of private health care providers, as well as for the DOD, VA and the prisons bureau, prosecutors said. But, rather than allowing the distributors to refund the health care providers directly, Guaranteed Returns asked to be sent the refunds so that it could distribute them.
At the direction of Volkes, the company reworked its computer filing system to separate clients into two categories: those who closely monitored their indated drug returns and those who did not, prosecutors claim.
The filing system was allegedly programmed to divert all indated drugs from the accounts of less-wary customers to Guaranteed Returns’ own accounts. When the drugs were ready to be returned, the company stole the refunds, the indictment said. Additionally, prosecutors said, a portion of drugs belonging to the more wary clients were stolen too.
Once the company caught wind it was being investigated by a federal grand jury, it destroyed files on the indated drug inventory and then concealed the fact that alternative copies of the files existed, the indictment said.
The case is being prosecuted by Assistant U.S. Attorneys Patrick J. Murray and Nancy Rue.
Guaranteed Returns is represented by Douglas E. Grover and Thomas A. Kissane of Schlam Stone & Dolan LLP and Ann C. Flannery of the Law Offices of Ann C. Flannery LLC.
The case is USA v. Devos LTD. et al, case number 2:14-cr-00574, in the U.S. District Court for the Eastern District of Pennsylvania.
--Additional reporting by Aebra Coe.
By Dani Kass
Law360, New York (January 11, 2017, 4:47 PM EST) -- A Pennsylvania federal judge on Tuesday shot down attempts by Guaranteed Returns to remove a money-laundering charge and suppress evidence from litigation alleging the company — which helps the government and providers return expired drugs — stole $116 million worth of refunds from pharmaceutical manufacturers.
Chief U.S. District Judge Petrese B. Tucker denied all six of Guaranteed Return’s pretrial motions in a 55-page order, finding the government had presented enough evidence to justify two sets of warrants the company was trying to suppress and allege a diversion scheme, which included money laundering. The trial is set to start on Jan. 30.
Devos Ltd., which conducts business as Guaranteed Returns, its CEO, Dean Volkes, and two other employees were charged in October 2014 with implementing a scheme to divert drug company refund money away from those who originally purchased the drugs and into its own accounts. Those purchasers include health care providers, the U.S. Department of Defense, the U.S. Department of Veterans Affairs and the Federal Bureau of Prisons.
Guaranteed Returns first tried to suppress evidence stemming from two sets of search warrants, arguing that they were too general to be legal and then that the warrants were issued without a factual basis to support finding probable cause.
Judge Tucker said under the Third Circuit's decision in U.S. v. Yusuf, the warrants weren't too general, as they were limited to specific federal crimes, a specific time period and specific parties. In addition, a magistrate judge made handwritten edits that narrowed the warrants further.
The warrants were backed up by plausible allegations of wrongdoing, including testimony from former employees and corroborating documents, the district judge said. Even though the alleged crime was more than 10 years old, the government presented sufficient evidence that it was continuous, she said, turning down arguments that the claims were stale.
“The magistrate judge’s finding of probable cause was reasonable, pragmatic, and sufficiently supported in view of the complex nature of the alleged crime,” the order states.
Another motion asked to dismiss one of the case’s 59 claims, which alleged a conspiracy to commit concealment money laundering. Guaranteed Reform said the government’s allegations for this count, even if proven true, don’t prove illegal activity. The judge didn’t agree, saying if the claims are true, the scheme would be illegal.
Among Guaranteed Returns’ other requests were a motion for a bill of particulars, which Judge Tucker said was unnecessary. The company doesn’t need specific victim or conspirator names, transaction details or other specific information to defend itself, she said. Discovery was extensive and the indictment provided more details than the government legally had to provide.
“The allegations set forth in the superseding indictment supports the conclusion that defendants are fully capable of determining the client victims and transactions at issue,” the order states.
Judge Tucker also refused to remove notices of lis pendens on four properties and two financial accounts seized during the search warrants. The notices on the property are accurate, as they alert prospective buyers that the land is subject to pending litigation. There is also enough evidence that the seized bank accounts may have been “involved in” or “ traceable to property” involved in money laundering, she said.
The U.S. Attorney’s Office declined to comment on the order. Counsel for Guaranteed Returns didn’t immediately respond to request for comment.
Prosecutors brought the case in 2014, alleging a multi-year scheme against the return company.
When health care providers purchase too much of a specific pharmaceutical, they can return it for a refund. That process, however, can become complicated because providers often purchase drugs from many distributors. That's where companies like Guaranteed Returns come in. They contract to do the returns in exchange for a fee.
Some of the drugs cannot be returned until they expire, so drug return companies offer to hold the medicine, called indated drugs, in warehouses during the waiting period.
Guaranteed Returns did this work for a number of private health care providers, as well as for the DOD, VA and the prisons bureau, prosecutors said. But, rather than allowing the distributors to refund the health care providers directly, Guaranteed Returns asked to be sent the refunds so that it could distribute them.
At the direction of Volkes, the company reworked its computer filing system to separate clients into two categories: those who closely monitored their indated drug returns and those who did not, prosecutors claim.
The filing system was allegedly programmed to divert all indated drugs from the accounts of less-wary customers to Guaranteed Returns’ own accounts. When the drugs were ready to be returned, the company stole the refunds, the indictment said. Additionally, prosecutors said, a portion of drugs belonging to the more wary clients were stolen too.
Once the company caught wind it was being investigated by a federal grand jury, it destroyed files on the indated drug inventory and then concealed the fact that alternative copies of the files existed, the indictment said.
The case is being prosecuted by Assistant U.S. Attorneys Patrick J. Murray and Nancy Rue.
Guaranteed Returns is represented by Douglas E. Grover and Thomas A. Kissane of Schlam Stone & Dolan LLP and Ann C. Flannery of the Law Offices of Ann C. Flannery LLC.
The case is USA v. Devos LTD. et al, case number 2:14-cr-00574, in the U.S. District Court for the Eastern District of Pennsylvania.
--Additional reporting by Aebra Coe.
Devos Wants Evidence Barred In Money Laundering Case
By Chuck Stanley
Law360, Washington (January 19, 2017, 4:00 PM EST) -- A pharmaceutical refund company on Wednesday asked a Pennsylvania federal judge to bar the government from presenting evidence it engaged in money laundering activity before it received payments from manufacturers, saying such evidence would contradict the government’s previous arguments.
Guaranteed Returns, which collects expired prescription medications from consumers and sells them back to manufacturers, said the government specifically argued previously that the company’s alleged money laundering took place only after it received payments for returned drugs, in a memo in support of its motion to have any such evidence barred.
“Because the government has taken the position that the money laundering charge is based on post-disbursement conduct, a clear inconsistency would exist if the government now claimed that the process by which pharmaceuticals were returned to manufacturers, or any other pre-disbursement conduct, could satisfy the concealment element of money laundering,” the motion states.
Devos Ltd., which conducts business as Guaranteed Returns; its CEO, Dean Volkes; and two other employees were charged in October 2014 with implementing a scheme to divert drug company refund money away from those who originally purchased the drugs and into its own accounts. Those purchasers include health care providers, the U.S. Department of Defense, the U.S. Department of Veterans Affairs and the Federal Bureau of Prisons.
Guaranteed Returns had previously sought to have a money laundering charge in the case scrapped, claiming the charge was based on a lawful practice of “bundling” medications together before returning them to manufacturers. This was done, the company claimed, for efficiency reasons rather than to conceal revenues.
The government, according to court documents, responded that the allegation of money laundering related to concealment efforts made after Guaranteed Returns had received refund payments.
Guaranteed Returns now claims that allowing the government to present evidence of concealment efforts through transactions that took place before the company received refund payments would constitute a change in position by the government.
When health care providers purchase too much of a specific pharmaceutical, they can return it for a refund. Companies like Guaranteed Returns contract to do the returns in exchange for a fee. They also warehouse certain drugs that cannot be returned until they expire, and manage the returns after the drugs’ expiration dates.
Guaranteed Returns handled returns and warehousing of drugs for private health care providers, as well as for the DOD, VA and the Prisons Bureau, prosecutors said. But, rather than allowing the distributors to refund the health care providers directly, Guaranteed Returns asked to be sent the refunds so that it could distribute them.
The government claims the company set up a filing system to divert funds that should have gone back to the original purchasers.
Representatives for the parties could not immediately be reached for comment.
The case is being prosecuted by Assistant U.S. Attorneys Patrick J. Murray and Nancy Rue.
Guaranteed Returns is represented by Douglas E. Grover and Thomas A. Kissane of Schlam Stone & Dolan LLP and Ann C. Flannery of the Law Offices of Ann C. Flannery LLC.
The case is U.S. v. Devos Ltd. et al., case number 2:14-cr-00574, in the U.S. District Court for the Eastern District of Pennsylvania.
--Editing by Jack Karp.
By Chuck Stanley
Law360, Washington (January 19, 2017, 4:00 PM EST) -- A pharmaceutical refund company on Wednesday asked a Pennsylvania federal judge to bar the government from presenting evidence it engaged in money laundering activity before it received payments from manufacturers, saying such evidence would contradict the government’s previous arguments.
Guaranteed Returns, which collects expired prescription medications from consumers and sells them back to manufacturers, said the government specifically argued previously that the company’s alleged money laundering took place only after it received payments for returned drugs, in a memo in support of its motion to have any such evidence barred.
“Because the government has taken the position that the money laundering charge is based on post-disbursement conduct, a clear inconsistency would exist if the government now claimed that the process by which pharmaceuticals were returned to manufacturers, or any other pre-disbursement conduct, could satisfy the concealment element of money laundering,” the motion states.
Devos Ltd., which conducts business as Guaranteed Returns; its CEO, Dean Volkes; and two other employees were charged in October 2014 with implementing a scheme to divert drug company refund money away from those who originally purchased the drugs and into its own accounts. Those purchasers include health care providers, the U.S. Department of Defense, the U.S. Department of Veterans Affairs and the Federal Bureau of Prisons.
Guaranteed Returns had previously sought to have a money laundering charge in the case scrapped, claiming the charge was based on a lawful practice of “bundling” medications together before returning them to manufacturers. This was done, the company claimed, for efficiency reasons rather than to conceal revenues.
The government, according to court documents, responded that the allegation of money laundering related to concealment efforts made after Guaranteed Returns had received refund payments.
Guaranteed Returns now claims that allowing the government to present evidence of concealment efforts through transactions that took place before the company received refund payments would constitute a change in position by the government.
When health care providers purchase too much of a specific pharmaceutical, they can return it for a refund. Companies like Guaranteed Returns contract to do the returns in exchange for a fee. They also warehouse certain drugs that cannot be returned until they expire, and manage the returns after the drugs’ expiration dates.
Guaranteed Returns handled returns and warehousing of drugs for private health care providers, as well as for the DOD, VA and the Prisons Bureau, prosecutors said. But, rather than allowing the distributors to refund the health care providers directly, Guaranteed Returns asked to be sent the refunds so that it could distribute them.
The government claims the company set up a filing system to divert funds that should have gone back to the original purchasers.
Representatives for the parties could not immediately be reached for comment.
The case is being prosecuted by Assistant U.S. Attorneys Patrick J. Murray and Nancy Rue.
Guaranteed Returns is represented by Douglas E. Grover and Thomas A. Kissane of Schlam Stone & Dolan LLP and Ann C. Flannery of the Law Offices of Ann C. Flannery LLC.
The case is U.S. v. Devos Ltd. et al., case number 2:14-cr-00574, in the U.S. District Court for the Eastern District of Pennsylvania.
--Editing by Jack Karp.
Who Moved My Soap?: The CEO's Guide to Surviving in Prison:
by Andy Borowitz
Table of Contents
Table of Contents
1. Put Your Hands in the Air and Step Away from the Desk
2. From the Big Board to the Big House
3. Trading One Gated Community for Another
4. Packing for the Pokey
5. Prison Slang: From Ass-out to Zip Gun
6. Prison Food: Don't Pick Up the Check
7. The Seven Habits of Highly Effective Prisoners™
8. Prison Cell Feng Shui
9. Bringing Six Sigma to Sing Sing
10. Female CEOs: Breaking Through the Concrete Ceiling
11. How Golden Is Your Hacksaw? Exit Strategies
GRx found guilty on all counts hahaha. They had systems in place... to steal lol.
Glad to see these bastards convicted. I happened to be in the jury pool for this trial and was happy that I was not picked as a juror but if I was I would have convicted these assholes. They smiled throughout the jury selection process and I believe they probably thought they would get off. The average citizen pays the price in tax dollars when people like this rob the government and the healthcare system. I hope they get LIFE!
Department of Justice
U.S. Attorney’s Office
Eastern District of Pennsylvania
FOR IMMEDIATE RELEASE
Friday, March 24, 2017
CEO, CFO, and Company Convicted of a $180 Million Scheme to Defraud, Launder Money, and Obstruct Justice
PHILADELPHIA – Dean Volkes, 53, and Donna Fallon, 52, of Long Island, NY, and Devos Ltd., doing business as Guaranteed Returns, located in Long Island, were convicted Wednesday on charges of mail fraud, wire fraud, theft of government property, money laundering conspiracy, obstruction of justice, and false statements, announced Acting United States Attorney Louis Lappen. Volkes and Fallon face substantial sentences of incarceration, as well as a three-year period of supervised release. All three defendants face a possible fine and mandatory payment of full restitution. For Volkes and Guaranteed Returns, restitution is anticipated to be approximately $180 million. Additionally, the jury today ordered defendant Dean Volkes to forfeit bank accounts totaling $127 million.
Volkes was the President, Chief Executive Officer, and sole owner of Guaranteed Returns, a reverse pharmaceutical distributor located in Holbrook, New York. Fallon, who is Volkes’ sister, was the company’s Chief Financial Officer. As a reverse distributor, Guaranteed Returns managed the returns of pharmaceutical products for healthcare providers, including numerous hospitals, pharmacies, and long-term care facilities, as well as Department of Defense facilities. Pharmaceutical manufacturers often allow expired drugs to be returned for a refund. Guaranteed Returns handled this process for healthcare provider clients in exchange for a fee based on a percentage of the return value.
The evidence at trial proved that from approximately 1999 through 2014, Guaranteed Returns promised its clients that it would hold their “indate” (not yet expired) drug products until they expired, and then return them on the clients’ behalf, in exchange for a fee. Instead, Guaranteed Returns, at CEO Volkes’ direction, stole indated drug products that it received from its clients, returned the drugs to manufacturers, and kept the refund money. Volkes created a system in which he classified clients as either “managed” or “unmanaged.” The company returned the indated product that it received from all of its clients. For customers that Volkes designated “unmanaged,” however, Guaranteed Returns kept the full value of the returned product for itself. The evidence demonstrated that through this fraud, Volkes and Guaranteed Returns stole more than $180 million from over 13,000 clients, including more than $20 million from numerous medical treatment facilities operated by the U.S. Department of Defense and other government agencies.
The evidence also showed that Volkes, Fallon, and Guaranteed Returns stole clients’ refund money by diverting a percentage of the refunds into internal company accounts. In fall 2010, Volkes caused the company’s IT staff to write a computer program that allowed Guaranteed Returns to skim a portion of clients’ refund money from both expired and indated products through a computerized accounting adjustment. The CFO, Donna Fallon, then implemented this program over a dozen times, resulting in the theft of approximately $500,000 in just five months.
The jury also found that Volkes, Fallon, and Guaranteed Returns had conspired to launder the proceeds of the fraud. Specifically, the evidence showed that when the defendants returned drugs to the respective manufacturers for refunds, they intentionally combined drugs that had been stolen with drugs that had not been stolen. Consequently, as the defendants knew and intended, the payments that the manufacturers made to the wholesalers would comprise commingled funds – i.e., refunds for drugs that the defendants had stolen from clients, which refunds the defendants intended to keep and did keep for themselves, were commingled with refunds for drugs that were not stolen and that would be forwarded to clients as the defendants were required to do. Afterward, the defendants transferred millions of dollars in commingled funds through the company’s accounts to accounts controlled by Volkes.
Finally, the evidence at trial showed that the defendants obstructed justice in connection with a grand jury investigation. As part of an unrelated investigation, a grand jury subpoena had been served on Guaranteed Returns, requiring the production of various records. In March 2010, Volkes met with his IT department and instructed them to delete data called for by the subpoena and then to obtain a wiping program to ensure that deleted data could not be forensically recovered, which they did. Volkes then directed the head of the company’s IT department to falsely inform federal investigators that this deletion was part of a routine data purge, which he also did. In the same timeframe, March 2010, Fallon concealed from the investigators that in January 2010 she had received the computer hard drives of two former employees whose emails and documents were covered by the subpoena. The investigators discovered Fallon’s concealment and false statements when the hard drives were found locked in a cabinet in Fallon’s office during a judicially-authorized search of the company’s office in April 2011, during which the Federal Bureau of Investigation and Defense Criminal Investigative Service seized almost 30 servers, over 20 computers, and hundreds of boxes of documents.
“The defendants and their company betrayed the trust of their numerous clients through a complex fraud scheme that cheated these victims of $180 million,” said Lappen. “The verdict in this case, which is the culmination of years of work, makes clear that this office and its many law enforcement partners will continue to devote substantial resource to prosecute large scale health care fraud and hold these dishonest businesses and their officers accountable.”
“This long-running scheme appears fueled by sheer greed,” said Michael Harpster, special agent in charge of the FBI’s Philadelphia Division. “The defendants’ boldness is really something to behold: doing business under the company name ‘Guaranteed Returns,’ while merrily pocketing refunds due to clients – among them, the U.S. government.”
The case was investigated by the Defense Criminal Investigative Service and the Philadelphia office of the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Nancy Rue and Patrick J. Murray.
USAO - Pennsylvania, Eastern
Topic:
Financial Fraud
Updated March 24, 2017
U.S. Attorney’s Office
Eastern District of Pennsylvania
FOR IMMEDIATE RELEASE
Friday, March 24, 2017
CEO, CFO, and Company Convicted of a $180 Million Scheme to Defraud, Launder Money, and Obstruct Justice
PHILADELPHIA – Dean Volkes, 53, and Donna Fallon, 52, of Long Island, NY, and Devos Ltd., doing business as Guaranteed Returns, located in Long Island, were convicted Wednesday on charges of mail fraud, wire fraud, theft of government property, money laundering conspiracy, obstruction of justice, and false statements, announced Acting United States Attorney Louis Lappen. Volkes and Fallon face substantial sentences of incarceration, as well as a three-year period of supervised release. All three defendants face a possible fine and mandatory payment of full restitution. For Volkes and Guaranteed Returns, restitution is anticipated to be approximately $180 million. Additionally, the jury today ordered defendant Dean Volkes to forfeit bank accounts totaling $127 million.
Volkes was the President, Chief Executive Officer, and sole owner of Guaranteed Returns, a reverse pharmaceutical distributor located in Holbrook, New York. Fallon, who is Volkes’ sister, was the company’s Chief Financial Officer. As a reverse distributor, Guaranteed Returns managed the returns of pharmaceutical products for healthcare providers, including numerous hospitals, pharmacies, and long-term care facilities, as well as Department of Defense facilities. Pharmaceutical manufacturers often allow expired drugs to be returned for a refund. Guaranteed Returns handled this process for healthcare provider clients in exchange for a fee based on a percentage of the return value.
The evidence at trial proved that from approximately 1999 through 2014, Guaranteed Returns promised its clients that it would hold their “indate” (not yet expired) drug products until they expired, and then return them on the clients’ behalf, in exchange for a fee. Instead, Guaranteed Returns, at CEO Volkes’ direction, stole indated drug products that it received from its clients, returned the drugs to manufacturers, and kept the refund money. Volkes created a system in which he classified clients as either “managed” or “unmanaged.” The company returned the indated product that it received from all of its clients. For customers that Volkes designated “unmanaged,” however, Guaranteed Returns kept the full value of the returned product for itself. The evidence demonstrated that through this fraud, Volkes and Guaranteed Returns stole more than $180 million from over 13,000 clients, including more than $20 million from numerous medical treatment facilities operated by the U.S. Department of Defense and other government agencies.
The evidence also showed that Volkes, Fallon, and Guaranteed Returns stole clients’ refund money by diverting a percentage of the refunds into internal company accounts. In fall 2010, Volkes caused the company’s IT staff to write a computer program that allowed Guaranteed Returns to skim a portion of clients’ refund money from both expired and indated products through a computerized accounting adjustment. The CFO, Donna Fallon, then implemented this program over a dozen times, resulting in the theft of approximately $500,000 in just five months.
The jury also found that Volkes, Fallon, and Guaranteed Returns had conspired to launder the proceeds of the fraud. Specifically, the evidence showed that when the defendants returned drugs to the respective manufacturers for refunds, they intentionally combined drugs that had been stolen with drugs that had not been stolen. Consequently, as the defendants knew and intended, the payments that the manufacturers made to the wholesalers would comprise commingled funds – i.e., refunds for drugs that the defendants had stolen from clients, which refunds the defendants intended to keep and did keep for themselves, were commingled with refunds for drugs that were not stolen and that would be forwarded to clients as the defendants were required to do. Afterward, the defendants transferred millions of dollars in commingled funds through the company’s accounts to accounts controlled by Volkes.
Finally, the evidence at trial showed that the defendants obstructed justice in connection with a grand jury investigation. As part of an unrelated investigation, a grand jury subpoena had been served on Guaranteed Returns, requiring the production of various records. In March 2010, Volkes met with his IT department and instructed them to delete data called for by the subpoena and then to obtain a wiping program to ensure that deleted data could not be forensically recovered, which they did. Volkes then directed the head of the company’s IT department to falsely inform federal investigators that this deletion was part of a routine data purge, which he also did. In the same timeframe, March 2010, Fallon concealed from the investigators that in January 2010 she had received the computer hard drives of two former employees whose emails and documents were covered by the subpoena. The investigators discovered Fallon’s concealment and false statements when the hard drives were found locked in a cabinet in Fallon’s office during a judicially-authorized search of the company’s office in April 2011, during which the Federal Bureau of Investigation and Defense Criminal Investigative Service seized almost 30 servers, over 20 computers, and hundreds of boxes of documents.
“The defendants and their company betrayed the trust of their numerous clients through a complex fraud scheme that cheated these victims of $180 million,” said Lappen. “The verdict in this case, which is the culmination of years of work, makes clear that this office and its many law enforcement partners will continue to devote substantial resource to prosecute large scale health care fraud and hold these dishonest businesses and their officers accountable.”
“This long-running scheme appears fueled by sheer greed,” said Michael Harpster, special agent in charge of the FBI’s Philadelphia Division. “The defendants’ boldness is really something to behold: doing business under the company name ‘Guaranteed Returns,’ while merrily pocketing refunds due to clients – among them, the U.S. government.”
The case was investigated by the Defense Criminal Investigative Service and the Philadelphia office of the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Nancy Rue and Patrick J. Murray.
USAO - Pennsylvania, Eastern
Topic:
Financial Fraud
Updated March 24, 2017
Wondering what they are doing while waiting for the sentencing?
"Pigs get fat, hogs get slaughtered"
"When you’ve got a good thing and you get greedy, it always, always, always, always, always turns on you. That’s rule No. 1 of business.”
"When you’ve got a good thing and you get greedy, it always, always, always, always, always turns on you. That’s rule No. 1 of business.”
Love how everyone here has big balls while hiding behind anonymity. Cyber courage is so pathetic.
dean and Donna hope you enjoyed your first 50 yrs as its over now. Donna still using company credit card for trips to Vegas. Dean thinks GRX worth more then 15 million. What a joke of a family.