Free Cellphone Offer Allegedly Used to Lure Jacksonville Residents Into $51 Million HIV Drug Billing Scheme, Prosecutors Say

Federal prosecutors say a Jacksonville nonprofit's pharmacy turned a promise of free government cellphones into a $51 million health care fraud, using the personal information of residents who signed up for phones to bill Medicare, Medicaid and private insurers for expensive HIV medication those residents never requested. A federal grand jury on Oct. 29 indicted Charlie Bernard Griffin III, president of First Coast Community Development Inc., on 31 counts, and two other people tied to the scheme have already pleaded guilty, according to court records reported by the Florida Times-Union and News4JAX.

The case, brought by the U.S. Attorney's Office for the Middle District of Florida, alleges that the people whose names appeared on the claims got nothing out of it, while millions of dollars flowed to the nonprofit's leadership, a marketing company and the medical provider who signed the prescriptions. None of the indictment's allegations against Griffin have been proven in court.

How the scheme allegedly worked

According to plea agreements and the indictment, First Coast Community Development, a Jacksonville nonprofit that operated a pharmacy, hired a marketing company in November 2023. Marketers set up at community outreach events, including outside grocery stores and at missions serving people in need, and promoted free government-funded cellphone service.

People who signed up believed they were only getting a phone, prosecutors say. While enrolling them, marketers collected personal details, including whether each person was covered by Medicare or Medicaid. The pharmacy then used that information to generate prescriptions for HIV post-exposure prophylaxis medication that the patients never asked for and, prosecutors say, had no evident need for.

For each person whose claim was paid, the pharmacy received about $4,000 a month from Medicare or Medicaid, court records show. Marketers were paid flat fees for each paid claim, an arrangement the plea agreements describe as a violation of the federal Anti-Kickback Statute. The scheme generated more than 20,000 claims to Medicare and Medicaid, according to the government.

Prosecutors say the drugs were not merely unnecessary but potentially dangerous for some recipients. One Medicare patient with cardiac conditions was told by his cardiologist not to take the medication because doing so could be life-threatening, according to court filings described by the Times-Union.

Who has been charged

The cases filed so far, and where each stands, are summarized below.

Griffin faces charges of health care fraud conspiracy, kickback violations and money laundering conspiracy, plus 21 counts tied to individual financial transactions ranging from $25,000 to $3.5 million. The indictment alleges "tens of thousands of fraudulent claims" and puts total reimbursements from Medicare, Medicaid and private insurers at $51,125,806. Griffin's attorney, David Barksdale, declined to comment to the Times-Union. News4JAX spelled the accountant's surname Nwangbo; this article uses the spelling reported from court records by the Times-Union.

News4JAX also reported that a pharmacist at the facility is tied to more than $24 million in Medicare and Medicaid claims and received about $4.9 million in proceeds. The Florida Press could not confirm from court records whether the pharmacist has been charged and is not naming him.

The guilty pleas

Gholston, 35, of Jacksonville, pleaded guilty earlier this year to conspiring to receive kickbacks for referring Medicare and Medicaid beneficiaries to the pharmacy for HIV prophylactic drugs, according to the U.S. Attorney's Office. The charge carries a maximum penalty of five years in federal prison. Prosecutors are seeking forfeiture of about $2 million from him, and his lawyer has asked to postpone sentencing so that his cooperation in related cases can be completed first.

Jones, 47, admitted authorizing HIV prophylaxis prescriptions for patients she never examined or evaluated, according to her plea agreement. She agreed to forfeit $422,250 and is jointly liable with co-conspirators for about $11.7 million in restitution to Medicare and about $12.5 million to Medicaid. Assistant U.S. Attorney Arnold "Chip" Corsmeier said she faces up to five years in prison. Jones and Gholston together agreed to liability for about $24.2 million in Medicare and Medicaid losses, the portion of the total tied to their roles.

Forfeiture targets property across Jacksonville

The government is seeking to seize money and real estate it says came from the scheme. Prosecutors want forfeiture of $14.2 million from Griffin tied to the health care fraud counts and $17.8 million tied to the money laundering counts, along with about $6.1 million from Nwanegbo. The indictment also lists 15 bank accounts holding between roughly $52,000 and $1.9 million each, the deed to the nonprofit's headquarters at 525 N. Newnan Street downtown, and houses in Arlington and North Jacksonville.

First Coast Community Development was known publicly for weekend food giveaways downtown that it called "serving the block," according to the Times-Union. Its pharmacy license ended in November 2025, and the pharmacy is now closed.

Why it matters for Floridians

Medicaid in Florida is paid for jointly by state and federal taxpayers, so fraudulent claims drain money from the program that covers millions of low-income residents, children and people with disabilities. Former federal prosecutor Curtis Fallgatter, who is not involved in the case, told News4JAX that the residents whose information was used were victims too. "Their name was used and they got nothing out of it," he said.

Federal health officials advise beneficiaries to review the Medicare Summary Notice or Medicaid statements they receive for drugs or services they never got, and to report suspicious billing to the HHS Office of Inspector General hotline at 1-800-HHS-TIPS. Offers that ask for a Medicare or Medicaid number in exchange for a free phone, gift or service are a common warning sign.

What's next

Griffin and Nwanegbo are presumed innocent and will face the charges in federal court in Jacksonville. On Oct. 30, prosecutors filed a notice linking the new indictment to the earlier plea cases, signaling that the investigation is being handled as one connected matter. Gholston and Jones await sentencing, and prosecutors may rely on a paper trail and on witnesses who allegedly recruited patients and collected kickbacks, News4JAX reported. If convicted, Griffin and Nwanegbo could face significant federal prison terms.