In a memorandum opinion and order posted Tuesday, U.S. District Judge Ronnie Greer held that the trial of four Florida men indicted the second-largest healthcare-fraud case in U.S. history will occur in East Tennessee.

The alleged conspiracy involved $931 million in alleged fraudulent insurance claims related to prescription drugs with hyper-inflated prices, and $174 million in actual payouts, according to an indictment returned by a federal grand jury in Greeneville in October 2018. The trial is scheduled to begin in September 2020.

The defendants, Larry Everette Smith, Andrew Assad, Peter Bolos and Michael Palso wanted to move the trial to their home turf in Tampa. Greer took the same position as U.S. Magistrate Clifton Corker took earlier – that their motion for a change of venue should be denied.

What’s evolved in change-of-venue disputes is a 10-factor analysis to determine if relocating a trial is appropriate. The factor that Greer gave the greatest weight was the location of potential witnesses.

The Florida four maintained that their bases of operation are in Florida, along with character witnesses they plan to call to testify they possess admirable personality traits. Federal prosecutors prevailed by advancing the argument their witnesses – both prescription-drug recipients and medical doctors – hail from East Tennessee.

While the defendants operated independently from Florida, they shipped prescriptions to 23 states with a combined population of 187 million, according to court documents. East Tennessee was selected, in part, as a result of a credible complaint filed by an unidentified local resident.

Greer ruled earlier that the defendants will be tried together, and that federal prosecutors need not further describe their case in a so-called bill of particulars, which would detail the precise evidence they intend to introduce.

The alleged scheme was extremely complex and involved two steps – identifying customers and getting the expensive prescriptions authorized, and then actually dispensing the medications from Florida pharmacies.

The man who managed the telephone boiler room and got authorization for the prescriptions, Florida resident Scott Gregory Roix, has already pleaded guilty and presumably is helping to implicate the four in Florida.

Roix, who owned a company called HealthRight, placed ads on Facebook and Yahoo-related websites, hawking “free trials” for purported revolutionary weight-loss pills, skin creams and testosterone supplements to patients who were willing to divulge their insurance information, purportedly for shipping costs, according to Roix’s plea agreement.

HealthRight needed a medical doctor to authorize the prescriptions. To accomplish this, the company employed telemedicine doctors who were paid an hourly rate, and had no desire to interact with patients. When the doctors called to ask if the drug recipients had been examined by a healthcare professional, they spoke to boiler-room staff, who lied, according to court documents.

Once the expensive prescriptions were authorized, HealthRight sold them to Smith, Assad, Bolos and Palso. At the height of operations, Roix was receiving $395,000 per week, according to Roix’s plea agreement.

One of the most remarkable allegations is that the drugs were not selected based on their efficacy, but rather on how much profit the Florida pharmacies could make, according to the indictment.

In some cases, doctors wrote prescriptions that – unbeknownst to the patients – provided for drug substitutions. The medicine that patients received, at times, would be different than the one first specified, and would arrive without the recommended dosage, according to the indictment.

In instances where certain drugs were not approved, the pharmacies could “work their way down the prescription cascade until they were able to identify a profitable alternative that was covered by a given patient’s health-care benefit program. Pharmacy personnel “test-billed” pharmacy benefit managers to learn what high-profit drugs were most likely to escape a challenge, the indictment states.

The agreements with the PBMs required the pharmacies to collect deductibles.

The Florida four realized that collecting deductibles for largely ineffective, wildly overpriced medications that patients didn’t want in the first place wouldn’t be easy, so they didn’t even try, even though deductible collection was a central requirement in the contract.

The pharmacies initially hid their failure to collect copays by transferring responsibility to others in a seven-corporation tangle, according to the indictment.

Ultimately, however, the PBMs noticed the fraud and suspended the contracts with certain pharmacies. The alleged conspirators covered their tracks similarly by filling the prescriptions at an affiliate pharmacy without disclosing the transfer or the true ownership of the companies, a separate violation of the law, according to the indictment.