A federal judge on Friday refused to release a Lincoln pharmacist jailed on suspicion of bilking Nebraska's Medicaid program out of nearly $2.5 million in a scheme using at least 16 children, many of them the children of customers.
Assistant U.S. Attorney Alan Everett argued for Scott Tran to stay in jail, saying the man who owns Pharmacy Specialty Services at 2655 S. 70th St. has led a secret double life from his wife and sons that involved a "massive amount of gambling."
He said Tran, 44, has access to extensive financial resources and motive to flee, based on information coming out in a new investigation.
U.S. Magistrate Judge Cheryl Zwart signed a criminal complaint Tuesday charging Tran with health care fraud based on an affidavit by Michael Maseth, a Federal Bureau of Investigation special agent stationed in Lincoln. Tran was arrested on Wednesday.
In the complaint, Maseth said between May 2009 and February 2015 Tran submitted 399 claims for reimbursement for TOBI, a solution used in inhalers for cystic fibrosis patients, saying they had been ordered by six doctors in the Lincoln area, identified only by their initials.
"Investigation has revealed that the physicians did not prescribe the drug TOBI," the special agent said.
In all, the claims added up to $2,476,402.
More than $1.1 million of those claims involved a single doctor who talked to investigators in March and denied ever having prescribed the drug to seven children, despite 185 Medicaid claims with the doctor's name on them, Maseth said in the affidavit.
Many of the fraudulent claims were for children of customers, according to court records.
In the case of three siblings, Maseth said, the claims for the TOBI prescriptions started three days after their mother filled her own prescription at Pharmacy Specialty Services in 2009.
At a detention hearing Friday in U.S. District Court in Lincoln, Everett argued that Tran should stay in custody and said the FBI had learned he had wagered more than $11 million since 2006 at Harrah's and Horseshoe Casino in Council Bluffs, Iowa, and was allowed to make bets of as much as $20,000 a hand on blackjack.
He said Tran spent more than $800,000 at the two casinos between Dec. 1 and Feb. 27.
Everett said Tran seems to have kept this secret from his wife.
"I think his ability to live a double life, as it were, is worrisome," he said. "It appears that not even his own family knows who he really is and what he's capable of. And I think under the circumstances of this case, that's a very troubling thing."
At Friday's hearing, Judy Tran said she was shocked when she learned of her husband's arrest. She and their three sons live in Waterloo, Nebraska, and the family owns a second home in Omaha.
She said if the court released him and she learned he was gambling, she would report him.
Defense attorney John Berry Jr. argued for Tran's release, saying he has significant ties to the community, including a family of supporters. His father practiced as a doctor in Nebraska for years before moving to California.
"Gambling, like any addiction, is a problem, but it's treatable," Berry said.
He said Tran has no criminal history, isn't a danger, and his business and personal accounts have been frozen or are on hold as a result of the investigation.
The judge questioned how the court could supervise Tran when his own wife didn't know what was going on.
"This is a man who has literally been able to hide his activities from his own wife," Zwart said.
She found he posed a risk of flight and should remain in custody.
Tran could be fined and get up to 10 years in federal prison if he is convicted.