Three doctors and two pharmacy operators have been indicted in connection with a compounded drug scheme that defrauded the federal workers' compensation program and Tricare out of almost $40 million, prosecutors said.

The fraudulent operations involved doctors in Houston, Dallas, Atlanta and Columbus, Ohio, and pharmacies, and federal worker advocates in Houston, federal prosecutors told the Houston Chronicle newspaper.

Those indicted include: Dr. James Don Jackson, a Houston surgeon; Dr. Deepak Chavda, a pain-management physician in Dallas; and Dr. Jay Bender, an orthopedist in Atlanta. Jackson pleaded not guilty Tuesday to taking kickbacks for prescribing expensive and unneeded compounds to federal workers referred by a therapy center.

"He didn't do anything wrong whatsoever," Jackson's attorney, John Green, told the newspaper. "He has had an impeccable career. He's a good, hardworking man."

Court documents allege that the fraud was coordinated by a Houston couple: John Cruise, CEO of the Injured Federal Workers Advocate Association, and his wife, Lashonia Johnson, the director of a group with offices in Houston, Atlanta and Columbus that helps federal workers who are injured on the job.

Cruise and Johnson also ran a pharmacy in Texas that dispensed the compounded medicines. The president of another pharmacy in Houston also participated in the fraud, according to court documents. Altogether, 13 defendants were named in the indictment.