By Alicia Draus

More details revealed regarding pharmacy fraud investigation

Jan 9, 2017 | 2:06 PM

MEDICINE HAT, AB — More details have been brought forward regarding recent fraud charges against three local pharmacists.

After a year-long investigation, pharmacists Kathy Kieser, Evan King and Robert Stadnyk, all formerly with South Country Co-op, were charged with fraud over $5,000 after the three allegedly defrauded approximately $1.6 million from the organization.

Staff Sgt. Trevor Humphries with the Medicine Hat Police Service said police had been investigating the claims since December 2015 after responding to a tip from management at Co-op.

“The events that occurred were alleged to have started in 2010, with the last incident in late 2015,” he said.

Humphries said the amount of money involved in the investigation was the primary reason for its length.

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“There were production orders that had to be drafted and resolved, there were search warrants that had to be done,” he said. “An investigation like this does take time.”

Humphries adds the police investigation was separate from the investigation by the Alberta College of Pharmacists.

According the documents posted by the Alberta College of Pharmacists, the three individuals allegedly negotiated drug purchases and vendor rebates or incentive payments, based on drugs supplied to the pharmacy from four generic drug manufacturers. According to the hearing, while the drug purchases and rebates or incentive payments were negotiated by the individuals, the drugs were purchased on behalf of Medicine Hat Co-op and paid for by the company.

Documents show that much of the vendor rebates or incentive payments were provided to Kieser, King and Stadnyk for their own personal use in the form of gift cards, prepaid credit cards, travel vouchers, paid trips and entertainment expenses and tickets.

Joe Caroll, pharmacy operations and marketing manager for Federated Co-op Limited, discovered the amounts of rebates and incentives recorded from Medicine Hat Co-op and submitted to the parent company were noticeably lower compared to other pharmacies, the documents stated.

Around the same time, the Canada Revenue Agency also approached FCL for outstanding tax owed on the rebates in question. The CRA alleged the rebates and incentives were not declared as income by FCL. A separate investigation by the CRA is underway.

Caroll reported his concerns to the College of Pharmacists in November 2015.

King, Kieser and Stadnyk are no longer employed by Co-op. As a result of the hearing, all three individuals had their license suspended for two months. The three were also ordered to pay a fine of $5,000 to the Alberta College of Pharmacists and must disclose the decision of the hearing tribunal to any pharmacy employer for the next three years.

All three have made their first court appearance on the charges. Stadnyk is scheduled to appear back in court on Thursday, while Kieser is back in court on January 25 and King on February 15.