This story was updated Thursday, Oct. 3, 2019, at 7:44 p.m. with more information

Three Hamilton County Schools employees have been suspended without pay amid an internal investigation by the district after they were implicated in a federal insurance fraud scheme involving prescription pain creams.

Keitha Booker, assistant principal and athletic director at East Hamilton School, and Katrich Hale, a teacher and coach at The Howard School, both received suspension letters from Chief Talent Officer Keith Fogleman Thursday.

The letters noted that their suspensions were "pending investigations into allegations that [they] have been guilty of unprofessional conduct, as defined in TCA 49-5-1003."

Tennessee Code 49-5-10023 requires educators to fulfill their obligations to students and outlines actions they "shall not" do such as "not intentionally expose the student to embarrassment or disparagement; not use professional relationships with students for private advantage; and not disclose information about students obtained in the course of professional service."

Kim Womble, the family partnership specialist at Tyner Academy, also received a letter from Fogleman suspending her without pay, but it did not cite a specific code violation.

All three have been implicated for potential involvement in a nationwide insurance fraud scheme during testimony in a case being heard this week in federal court. One of almost two dozen witnesses testified this week that more than $800,000 was lost due to the creams ordered at high prices and billed through the district's insurance.

The scheme was orchestrated by two Cleveland, Tennessee, doctors who have since been convicted.

In April 2018, Dr. Carl Lindblad and Dr. Susan Vergot pleaded guilty in federal court in San Diego to conspiracy to commit health care fraud for their operations at Choice MD, a walk-in clinic.

Along with a team of of co-conspirators, the two doctors admitted to cheating the military's health care program, TRICARE, out of more than $65 million by writing thousands of expensive, unnecessary prescriptions for patients they never examined.

Years before, in April 2016, a Hamilton County Schools employee notified the district's benefits office of a suspicious email solicitation regarding prescriptions for pain creams, according to a statement released Thursday by the district's attorney, Scott Bennett.

The district contacted Hamilton County District Attorney Neil Pinkston, and on advice from the DA's office revised its coverage to exclude prescriptions related to the creams, Bennett said.


Letters of suspension from Hamilton County Schools


The district's health insurer, BlueCross BlueShield of Tennessee, had already noticed there had been exorbitant charges to the district's employee health plan for bulk chemical creams, and the U.S. Attorney's Office had determined that BlueCross was defrauded by Lindbald and Vergot.

The fraudulent charges to BlueCross related to the Hamilton County Schools benefit plan were estimated to be $954,000 between 2015 and 2016, according to Bennett's email.

BlueCross only administers the school district's health insurance plan. Actual claims are paid for out of a self-insured health insurance fund that is made up of the premiums district employees pay toward their insurance and the matching amount paid by the school district out of its general purpose operating budget — which is funded through local and state tax dollars.

"The fraudulent charges were facilitated through out of state doctors writing prescriptions for employees that were filled by pharmacies and then billed to the district insurance plan. [BlueCross BlueShield] was later able to recoup approximately $325,000 in charges from the pharmacy that filled the prescriptions," the email said.

Though the district has been cooperating with the DA's Office, the Hamilton County Sheriff's Office and the U.S. Attorney's Office throughout the investigation, Bennett claims "law enforcement officials did not share with anyone the scope of their investigation or the impact on the school system."

"School officials learned just prior to the trial that three current employees would be implicated in the scheme, but the district could take no action until after the government put on its case. The U.S. Attorney is in charge of the case," Bennett said.

All three district employees deny any wrongdoing and have not yet been charged. They will remain suspended "pending the conclusion of an investigation into allegations of improper conduct," according to Womble's suspension letter.

Booker and Hale's letters note that if the district's internal investigation supports a conclusion that the employees were unprofessional, "further consequences may be warranted."

The district would not release the names of the employees suspended Thursday, but the Times Free Press obtained them through an open records request of personnel files.

Bennett said the district's actions were consistent with his legal advice.

"The district administration proceeded in a manner consistent with my legal advice and in cooperation with local and federal law enforcement towards resolving this insurance fraud case. The U.S. Attorney required extreme confidentiality while the case was pending. Circumstances certainly did not allow for any communication regarding the insurance fraud that took place during the 2015-2016 timeframe," he said in an email.

Since Lindbald and Vergot were convicted last year, the owners of Choice MD in Cleveland, Jimmy and Ashley Collins, also have been indicted on charges of conspiracy to commit health care fraud and illegal payments of remunerations.

It is unclear if Hamilton County school board members were aware of the case or the potential involvement of the district.

Staff writer Elizabeth Fite contributed to this story.

Contact Meghan Mangrum at or 423-757-6592. Follow her on Twitter @memangrum.