Phishing for cash?
Pharmacy claims $5 million loss
A New Jersey pharmacy has sued a Springfield payment processing firm and its owner, claiming that she either stole more than $5 million or bought into a phishing scheme that resulted in a seven-figure loss.
While her attorney disputes both the theft accusation and the size of the loss alleged by Empire Specialty Pharmacy, Debbie Drennan, owner of E-MedRx Solutions on Durkin Drive, called Springfield police in April and reported that payments due several pharmacies had gone to people or entities that had pretended to be pharmacies that had contracts with her company. She told police that her company had fulfilled emailed requests to direct funds to accounts with no connection to pharmacies. In one case, Drennan told police, more than $424,000 went to a Go Bank account after she received an email, she later realized was phony, requesting a change in accounts.
An attorney for Drennan and E-MedRx Solutions says that his client is no thief, and he disputed the allegation of a multi-million dollar loss, calling Empire Specialty Pharmacy’s claim of a $5 million theft “a pie-in-the-sky number that has no factual basis whatsoever.”
“E-MedRx and its president, Debbie Drennan, look forward to vindicating themselves in court,” Patrick Moran, attorney for Drennan and her company, wrote in an email.
Eduard Shtindler, Empire owner, declined an interview request, directing questions to his attorney, who did not return a phone call.
Empire hired E-MedRx last November to process billings and collect payments that were supposed to be forwarded to the New Jersey-based pharmacy. Such arrangements are common for independent pharmacies, which retain so-called pharmacy services administration organizations to handle billing and negotiate favorable financial deals with pharmacy benefit managers, which process claims and payments for insurance companies.
The relationship between Empire and E-MedRx went smoothly, with money flowing to the pharmacy’s bank account in New Jersey until April, when payments to the pharmacy from the Springfield firm suddenly stopped, according to the lawsuit. When Empire asked about its money, E-MedRx responded that funds were being deposited in a different bank account than the pharmacy had designated when it had signed up with Drennan’s company a few months earlier. When Empire said it didn’t recognize the account, E-MedRx sent the company an email from a phony email address requesting that the pharmacy’s money be sent to the bank account that Empire had never heard of.
“The email address of the email presented by E-MedRx was patently invalid,” Empire says in its lawsuit. “Additionally, the text of the email contains obvious grammatical and spelling errors, i.e. ‘I will let you know once the funds have arrived our chase bank account.’” The routing number of the bank account not controlled by Empire is the one used by J.P. Morgan Chase Bank for accounts in Illinois, according to the lawsuit.
In the lawsuit, Empire accuses Drennan and her company of stealing the pharmacy’s money, then trying to cover up the theft by creating the email that instructed E-MedRx to start sending funds to the bank account that had no connection to Empire. The pharmacy, however, also allows in its lawsuit that it’s possible that Drennan and her company fell for a phishing scheme.
Moran, the attorney for Drennan and her company, says that his client has committed no crime.
“Upon learning of the theft, E-MedRx promptly alerted law enforcement authorities and the FBI is now investigating,” Moran wrote in an email. “E-MedRx has since fully cooperated with the FBI to help identify and catch the perpetrator of this crime. To add insult to injury, and without having any factual basis to do so, Empire decided to file a false and malicious lawsuit against E-MedRx, accusing E-MedRx of masterminding the scam and pocketing the money.”
While calling the claim of a $5 million loss untrue, Moran declined to say how much money might be missing.
Empire also accuses Drennan of lying, saying that she falsely told the pharmacy that E-MedRx owed no money to Empire because no monies due the pharmacy were received since the last funds were deposited into the correct account. Empire also alleges that Drennan told the pharmacy that she had submitted a claim to her insurer to cover the loss, but no claim was filed and neither Drennan nor her company were insured for such matters. The pharmacy also says that E-MedRx has refused requests for an accounting of funds.
In its lawsuit, Empire says that Drennan and her company previously have been accused of sending unauthorized payments to third parties. In a 2015 federal lawsuit, All About Your Health, a company that had both a pharmacy and a medical clinic in South Carolina, sued Drennan and her company, alleging that E-MedRx had sent money from insurance companies to a drug distribution firm after All About Your Health had terminated its contract with the firm and told Drennan’s company to stop sending money to the firm.
According to the 2015 lawsuit, Drennan had recently formed E-MedRx and transferred accounts to her new company from a company she had previously owned, misrepresenting herself to insurance companies as chief executive officer of All About Your Health and signing documents on behalf of All About Your Health. The lawsuit ended with a consent order and injunction requiring Drennan’s company to give a full accounting of disbursements to All About Your Health, cease giving All About Your Health’s money to any entity except All About Your Health and immediately transfer any funds due All About Your Health to All About Your Health. The injunction also barred Drennan and anyone else in her company from representing themselves as being affiliated with All About Your Health.
According to findings of fact contained in the consent order, E-MedRx, in the space of a month, sent nearly $1.3 million of receivables from insurance companies to the drug distribution firm that All About Your Health, several times, said should not be paid. The payments were made by E-MedRx after All About Your Health had told the Springfield company not to pay the drug distribution firm.
Moran, the attorney for E-MedRx and Drennan, said in an email that the 2015 lawsuit was the result of a “misunderstanding” and was resolved with the consent order.
“The 2015 case has no connection whatsoever to the cybertheft of E-MedRx or Empire’s lawsuit,” Moran wrote. “As with most of the allegations in Empire’s lawsuit, the existence of this 2015 lawsuit has been mischaracterized.”
Contact Bruce Rushton at email@example.com.