A former Hamblen County married couple, Christopher Oakes and Kristy LeMarr Oakes, headed an $8.24 million insurance-fraud scheme in South Carolina, but will escape jail time altogether. The Oakes were released on an unsecured bond on Jan. 4, the same day they were arraigned in federal court in Greenville, according to court documents.
The Oakes and their five codefendants – including Kristy Oakes father, Morristown pharmacist Gerald “Steve” LeMarr – will forever be responsible for repaying $8.24 million, according to court documents.
Federal prosecutors calculated the seven owe $4.57 million to the Federal Insurance Company; $3 million to CVS Caremark; and slightly less than $700,000 to OptumRx.
While the millions in restitution will stay on the books, they’ll have to pay $200 per month on the debt. If all seven defendants paid that amount monthly, it would take 490 years to clear the court-ordered obligation. They are not responsible for paying interest on the multi-million debt.
The Oakes’ fraud involved scar and pain creams distributed through the family business, Balanced Solutions, a purported hormone-replacement clinic in Greenville, South Carolina, according to the indictment. The creams were first compounded at LeMarr’s now-defunct VitalMed pharmacy in Morristown.
The sales pitch advanced by Balanced Solution’s representatives allegedly included outright lies.
While the cream recipients provided their health-insurance information, they were falsely told the creams were free. Staff who worked at Mr. Oakes’ direction said they didn’t have to be seen by a medical professional; that they didn’t have to make copayments; and that – somehow – receipt of the creams “would count toward meeting any deductibles,” the indictment states.
The indictment further states “the patients had no medical necessity for the pain and scar creams.” A companion civil lawsuit alleges the patients’ insurance companies were billed between $1,000 and $10,000 for the creams.
The Oakes were sentenced on Nov. 5. The judgment wasn’t posted until Friday. LeMarr has pleaded guilty in Tennessee and South Carolina, and is awaiting sentencing.
His sentencing date has not been set.