The final defendant in the Medoc kickback conspiracy was sentenced on September 11, 2024, to 10 months in federal prison for his role in a prescription kickback scheme that cost federal insurance programs more than $4.4 million, announced U.S. Attorney for the Northern District of Texas Leigha Simonton.
The first indictment was filed in January 2020. Those sentenced include:
- Kevin Douglas Kuykendall, cofounder of Medoc Health Services, sentenced to 36 months in prison and ordered to pay $4.4 million in restitution for conspiracy to solicit and receive illegal kickbacks.
- Sabrina Burmester Kuykendall, Kevin’s wife, sentenced to 36 months’ probation and ordered to pay $4.4 million in restitution for conspiracy to solicit and receive illegal kickbacks.
- Mark David Schneider, cofounder of Medoc Health Services, sentenced to 15 months in prison and ordered to pay $4.4 million in restitution for conspiracy to solicit and receive illegal kickbacks.
- Michael Ray Schneider, sentenced to 14 months in prison and ordered to pay $4.4 million in restitution for conspiracy to solicit and receive illegal kickbacks.
- Trenton Lynn Moody, sentenced to 12 months and 1 day in prison and ordered to pay $257,500 in restitution for conspiracy to solicit and receive illegal kickbacks.
- Cuong “Michael” Nguyen, founder of Total RX pharmacy, sentenced to 10 months in prison for misprision (concealment) of a felony and paid restitution in the amount of $591,142.
- Moky Chung, sentenced to 10 months in prison and ordered to pay $150,000 in restitution for conspiracy to solicit and receive illegal kickbacks.
According to court documents, Medoc conspirators knowingly solicited illegal kickbacks from Total RX, a Rowlett pharmacy that was struggling financially.
In December 2014, Medoc executives Kevin Kuykendall and Mark Schneider approached Total RX owner Cuong Nguyen with a proposal to convert Total RX from an infusion pharmacy into a compounding pharmacy and begin filling prescriptions for Medoc. In return for referring lucrative prescriptions to Total RX, Medoc would receive a 50 percent commission. Initially, the agreement only covered prescriptions paid by private insurers, excluding federal insurance programs like Medicare, Medicaid, Tricare, and Worker’s Compensation.
However, in early 2015, Kevin Kuykendall directed Nguyen to enter into a sham employment agreement with Mark Schneider’s brother, Michael Ray Schneider, to grant him a 45 percent commission on prescriptions covered by federal health insurance referred by Medoc. Though nominally an employee of the pharmacy, Michael Schneider did not perform any work for Total RX. The employment agreement served as a cover for illegal kickbacks.
Nguyen initially declined to execute the agreement due to concerns about its legality. During a conference call, Kevin Kuykendall, Mark Schneider, and Moky Chung agreed to designate prescriptions covered by federal health insurance programs as "<PRESCRIBER NAME> T" to internally track and conceal the kickbacks.
The conspirators created entities, including “Barolo Partners,” to distribute the kickbacks. Some of the money was funneled to K&S Biotherapeutics and Radiux Resources, entities controlled by the Kuykendalls and Chung.
In August 2015, Medoc engaged in a similar scheme with Doctors Specialty Pharmacy (DSP). The conspirators received commissions disguised as payments for “marketing services,” though no marketing took place.
In total, the conspirators submitted claims for $10,448,856.90 and received $5,837,219.70 in payments.
In 2019, the U.S. Attorney’s Office for the Northern District of Texas intervened in a civil qui tam lawsuit filed by relator Mark Adams in 2017 under the False Claims Act. As part of the civil case resolution, Kevin and Sabrina Kuykendall paid $4 million, and Trenton Moody paid $600,000 to the United States. Mark and Michael Schneider agreed to a $3 million civil judgment; Cuong “Michael” Nguyen to a $2.25 million judgment; and Moky Cheung to a $300,000 judgment.
The FBI, HHS-OIG, Department of Labor, and Texas Attorney General’s Office Medicaid Fraud Control Unit conducted the investigation. Assistant U.S. Attorneys Donna Max, Doug Brasher, Nick Bunch (fmr), and Matthew Smid (fmr) prosecuted the criminal case. Assistant U.S. Attorneys Kenneth Coffin, Richard Guiltinan, Beverly Chapman, Katie Carr Jacobs, and Clayton Ray Mahaffey (fmr) handled the civil suit.
