Three men have pleaded guilty in a wire fraud conspiracy where they received at least $960,000 in fraudulent proceeds from the scheme.
Fabio Lanzieri, 61, Fort Lauderdale, has pleaded guilty to conspiracy to commit wire fraud. Lanzieri faces a maximum penalty of five years in federal prison and a fine of $250,000.
A sentencing date has not yet been set.
Two others, James Council, 55, Valrico, Florida, and Robert Ronzio, 49, North Providence, Rhode Island, pleaded guilty earlier this year for their respective roles in the same conspiracy.
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According to Lanzieri’s plea agreement and other court documents, Lanzieri and Council worked as sales and marketing consultants for Company 1, a wholly-owned Largo-based subsidiary of a larger pharmaceutical business that manufactured injectable medications.
Lanzieri acted as Company 1’s president and was senior to Council. As a manufacturer and vendor of injectable medications, Company 1 had entered into an agreement with a group purchasing organization (“GPO-1”) to facilitate product sales.
A GPO is an entity that helps health care providers realize savings and efficiencies by aggregating purchasing volume and using that purchasing volume as leverage to negotiate pricing discounts with vendors that have entered into purchasing agreements with the GPO.
The primary way a GPO makes its profit is via a percentage administrative fee charged against any sales made by the contracted vendors to GPO provider participants, which have correspondingly entered into participant agreements with the GPO. Thus, once a GPO has negotiated pricing discounts with a vendor, that vendor will forward the pricing discount information to health care product wholesalers that will pass the discounted rate on to the GPO’s participants.
The Company 1’s purchasing agreement with GPO-1 was materially altered by GPO-1 in the fall of 2019, resulting in GPO-1 provider participants no longer being eligible to receive pricing discounts on the purchase of certain Company 1 products from wholesalers. As a stopgap to maintain its provider customer base, Company 1 temporarily established competitive pricing discounts for the affected GPO-1 provider participants, thereby eliminating any immediate impact upon Company 1 customers.
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Later, in January 2021, Lanzieri conspired with Council and Ronzio to create a non-operating shell GPO named Honoris Purchasing, LLC (“Honoris”) in Wyoming as a purported functioning GPO. Ronzio opened a bank account for the company. The conspirators then caused a purchasing agreement to be created and executed between Company 1 and Honoris—notwithstanding that Honoris, as a non-operating shell, had no knowing participants—that was backdated to in or around May 2020. Lanzieri and Council then fraudulently recategorized the Company 1 customers that had been GPO-1 participants as Honoris participants in internal and external wholesaler records, allowing the customers to continue purchasing via competitive pricing discount schedules as if the customers were actually participants of the non-operating shell Honoris.
Council, in his role as a sales and marketing consultant for Company 1, prepared monthly an administrative fee report for GPOs contracted with Company 1, including for purported GPO Honoris, which contained information related to the total dollar amount of Company 1 product sales made during the month to each GPO’s participants, including the participants that the conspirators had fraudulently categorized as Honoris participants.
Council then forwarded the monthly administrative fee reports to the Company 1 accounting department, which, per normal operations, calculated and paid to the identified GPOs an approximate 3% administrative fee based upon the total dollar amount of Company 1 product sales to the participants of each GPO, including Honoris.
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In all, the conspirators received at least $960,000 in fraud proceeds from the scheme. Pursuant to their respective plea agreements, each has agreed to pay restitution and to forfeit $320,000, the proceeds of the wire fraud conspiracy.
This case was investigated by the Federal Bureau of Investigation.
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