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News Release

U.S. Department of Labor Investigation Results in Former CEO of Nebraska Pharmaceutical Benefits Management Company Being Sentenced to One Year in Jail for Kickback Scheme

TYLER, TX – After a U.S. Department of Labor Employee Benefits Security Administration (EBSA) investigation, the U.S. District Court for the Eastern District of Texas has sentenced Douglas M. Pick, former CEO of Pharmaceutical Technologies, Inc. (PTI), to one year and one day in federal prison for paying illegal kickbacks in an effort to steer benefit plans to the company. The sentencing of Pick follows his Feb. 13, 2017, guilty plea.

Pick was founder, president, and CEO of PTI, which provides for the administration and delivery of pharmacy products and services. PTI uses a network of pharmacies to service employee welfare benefit plans and healthcare benefit programs across the U.S. During Pick’s tenure, PTI contracted with individuals known as “Producers” with close business relationships with benefit plans. These benefit plans require administrative services in connection with the delivery of pharmacy products and services to their members.

An investigation by the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA), the U.S. Department of Health and Human Services (HHS), and the Texas Attorney General’s Medicaid Fraud Control Unit determined that between 2001 and 2013, PTI and certain producers agreed that these producers would steer the benefit plans to PTI in exchange for illegal kickback payments. Investigators found PTI made payments to producers based on the volume of business the producers steered to PTI, and that PTI illegally paid more than $3.5 million to producers in return for their steering efforts. The Employee Retirement Income Security Act (ERISA) prohibits such agreements and the related payments, as do other federal bribery and kickback statutes. The investigation determined that Pick was primarily responsible for the negotiations with producers.

“The U.S. Department of Labor will take all necessary legal action against those who abuse their positions of trust when it comes to employee benefit plans,” said Deborah Perry, Employee Benefits Security Administration Regional Director in Dallas. “EBSA will continue to aggressively investigate such crimes on behalf of workers nationwide.”

To resolve the matter, PTI has entered into a non-prosecution agreement in which it agrees to pay over $8.5 million; to cooperate with the federal investigation and prosecution of individuals involved in the illegal kickback arrangements; and to maintain internal controls, including compliance with ERISA, the Anti-Kickback Statute, and all other applicable statutes.

Assistant U.S. Attorneys Nathaniel Kummerfeld and Frank Coan, and Special Assistant U.S. Attorney Kenneth McGurk prosecuted the case.

Employers and workers can reach EBSA toll-free at 866-444-3272 for help with problems related to private sector retirement and health plans. Additional information can be found at

Employee Benefits Security Administration
March 27, 2018
Release Number
Media Contact: Chauntra Rideaux
Media Contact: Juan Rodriguez