Multi-Million-Dollar Prescription Fraud Scheme Results In Prison Sentence For Three East Tennesseans

KNOXVILLE, Tenn. - On June 11, 2026, Barbara A. Smith, 75, of Powell, Tennessee, was sentenced to 37 months' imprisonment and one year of supervised release by the Honorable Katharine A. Crytzer, in the United States District Court for the Eastern District of Tennessee at Knoxville. Smith was also ordered to pay restitution in the amount of $4,810,878.

Judge Crytzer previously sentenced Smith's codefendants and coconspirators Jared Grant Riddle ("Grant Riddle"), 47, of Clinton, Tennessee, and Brian M. Woods, 48, of Dandridge, Tennessee.

Both Grant Riddle and Brian Woods were sentenced to 33 months' imprisonment and three years of supervised release. Grant Riddle was ordered to pay restitution in the amount of $8,687,531.89, and Woods was ordered to pay restitution in the amount of $7,365,897.89.

As part of the plea agreements filed with the court, Smith, Riddle, and Woods each pleaded guilty to an indictment charging them with one count of conspiracy to commit health care fraud, in violation of 18 U.S.C. § 1349.

Riddle Formulary Fraud Case: Barbara Smith, Grant Riddle, Brian Woods

As set forth in plea agreements filed with the Court, from May 2018 to October 2020, United Apothecary, LLC, operated six retail pharmacies doing business as Riddle Drugs or Riddle Express Pharmacy. Grant Riddle, a licensed pharmacist, created a drug formulary that listed certain drugs, including pain creams and an oral muscle relaxer called chlorzoxazone 250 mg, based solely on their high reimbursement values. Riddle Drugs hired Woods to market the formulary to local pain clinics, including to a Knoxville-area pain clinic and primary care facility where Smith was the office manager. Woods provided stacks of blank paper formularies to Smith and the clinic's providers. Riddle Drugs agreed to pay Woods off-the-books cash bonuses based on the volume of signed formularies he delivered to Riddle Drugs.

Woods agreed to pay Smith cash for formularies signed by the clinic's providers. Woods and Smith then began to alter signed formularies, adding check boxes next to unprescribed medications and increasing the number of refills written on the formularies. The clinic's patients began to complain about receiving medications in the mail that their provider had not prescribed and that they did not want, which led the clinic's providers to suspect Smith of altering their formularies. As a result, the providers completed formularies to prevent alterations, including crossing out medications by drawing an "X" on them.

Woods and Smith then used blank formularies to create wholly forged formularies: they handwrote patient names on the formularies, marked boxes next to various medications, wrote in refills, and forged providers' signatures-either by hand or by using a photocopy of the provider's signature without the provider's knowledge. Woods paid Smith in cash for Smith's role in altering and forging the formularies.

Grant Riddle submitted, or caused United Apothecary to submit, the altered and forged formularies to drug plans and pharmacy benefits managers for reimbursement. As a result of those fraudulent claims, the drug plans and pharmacy benefits managers paid to United Apothecary approximately $7,365,897.89, including approximately $4.8 million paid by Medicare Part D. During portions of the scheme, Riddle Drugs' Oliver Springs, Tennessee, pharmacy was the top pharmacy in the country for distribution of chlorzoxazone 250 mg.

Riddle Health Care Kickbacks Case: Ernest Riddle and Grant Riddle

In a separate case also involving Riddle Drugs, George Ernest Riddle ("Ernest Riddle"), 78, of Clinton, Tennessee, was sentenced by Judge Crytzer to 15 months' imprisonment, two years of supervised release, and was ordered to pay restitution in the amount of $1,321,634.00.

As indicated in plea documents filed with the Court, Ernest Riddle, who owned United Apothecary and its six retail pharmacies, pleaded guilty to an indictment charging him with one count of conspiracy to solicit, pay, and receive health care kickbacks, in violation of 18 U.S.C. § 371.

From July 2016 to January 2020, Ernest Riddle and his son Grant Riddle conspired with each other to pay kickbacks and bribes to out-of-state marketers in exchange for the marketers delivering signed prescriptions to Riddle Drugs. Riddle Drugs then submitted the prescriptions to Medicare Part D drug plans for reimbursement. Medicare paid approximately $1,321,634.00 to United Apothecary for the prescriptions United Apothecary acquired by paying kickbacks and bribes. As part of his plea agreement filed with the Court, Grant Riddle admitted to his involvement in the kickbacks scheme and agreed to pay restitution to Medicare Part D.

"Medicare fraud undermines the integrity of our nation's most critical healthcare programs, which are relied upon by millions of patients, doctors, and honest healthcare professionals," said U.S. Attorney Francis M. Hamilton III for the Eastern District of Tennessee. "Fraud of this kind wastes taxpayer dollars and increases the cost of healthcare for all Americans. Together with our law enforcement partners, we will relentlessly pursue those who steal from taxpayers and exploit our healthcare system for their own personal gain."

"These sentencings underscore the serious consequences faced by individuals who exploit federal health care programs for personal gain," said Special Agent in Charge Kelly Blackmon of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). "The Riddles' scheme diverted valuable taxpayer funds from programs designed to support beneficiaries in need. Working closely with our law enforcement partners, HHS OIG will continue to pursue those who compromise patient trust, inflate health care costs, and undermine the integrity of Medicare."

"Healthcare fraud undermines trust in a system that millions of Americans rely upon and costs taxpayers and consumers billions of dollars each year," said Special Agent in Charge Terence Reilly of the FBI Nashville Field Office. "Today's sentence demonstrates that those who exploit our healthcare system for personal gain will be identified, investigated, and brought to justice. The FBI and our partners remain committed to protecting public healthcare resources and holding fraudsters accountable."

The criminal indictments were the result of an investigation by HHS-OIG and the FBI.

Assistant United States Attorneys William A. Roach, Jr., and Michael S. Deel represented the United States.

On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division (Fraud Division). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department's work to combat fraud supports President Trump's Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

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