The Pentagon blew $65 million on fake scar cream nobody wanted

Bullet Points

A former Marine helped recruit service members for a scheme to bilk the Department of Defense for cash by purchasing tubes of scar cream that did nothing to treat scars for insane prices, according to a remarkable investigation by the Nashville Tennessean.


  • Two doctors and a nurse at the Tennessee clinic have already pleaded guilty to defrauding Tricare to the tune of $65 million, while several other suspects, including the former Marine and employees at a Utah-based pharmacy, have already admitted to their role in the scheme.
  • The scam itself was simple, according to the Tennessean: "The Marine was being paid to get medicine he didn't need. A Tennessee doctor he had never met wrote him a medicinal cream prescription, which was being filled by a pharmacy in Utah. The military covered the bill and the Marine got a cash kickback from somebody."
  • The medicine Mederma, supposedly used to treat pain and scars, runs for about $30 a tube on Amazon; according to the investigation, the Tennessee pharmacy was prescribing the stuff to Marines at $14,500 a tube as far back as 2015.
  • Court documents reviewed by The Tennessean indicate that the recruiters, led by former Marine Joshua Morgan, "targeted Marines around Camp Pendleton, often by convincing the Marines they were joining a drug trial for the pain and scar creams. Marines were paid about $300 in illegal kickbacks each month," according to the investigation.
  • According to a 2015 CBS News report, the scar cream scheme succeeded by exploiting a loophole in Tricare regarding "compounded" medications which rely on mixing several medicines into a single treatment — medications that were fully covered by Tricare despite the absence of formal reviews of their effectiveness by the Food and Drug Administration
  • "We're on track this year to spend over $2 billion unless we get our hands around this," former Tricare chief Maj. Gen. Richard Thomas said in the 2015 CBS report. "It's just been astronomical, an explosion of the charges in a relatively short period of time."

SEE ALSO: Texas Woman Pleads Guilty In Multi-Million Dollar Tricare Fraud Scheme

In this March 12, 2016, file photo, Marines of the U.S., left, and South Korea, wearing blue headbands on their helmets, take positions after landing on a beach during the joint military combined amphibious exercise, called Ssangyong, part of the Key Resolve and Foal Eagle military exercises, in Pohang, South Korea. (Associated Press/Yonhap/Kim Jun-bum)

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