DRUGS FOR DOLLARS: HOW MEDICAID 

HELPS FUEL THE OPIOID EPIDEMIC

A Majority Staff Report of the

Committee on Homeland Security and Governmental Affairs

United States Senate

Senator Ron Johnson, Chairman

January 17, 2018
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

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EXECUTIVE SUMMARY

The dramatic increase in drug overdose deaths throughout America has appropriately 

been labeled a national health care crisis. In 2016, the nearly 64,000 drug overdose deaths 

outnumbered every other cause of accidental fatalities.1 As a result, Americans have been paying

much attention to what caused this epidemic and what can be done to end it. Less attention is 

paid to the possibility that federal programs—namely, Medicaid—have contributed to the 

epidemic.

There are many causes to the opioid epidemic, making it easy to point multiple fingers of 

blame. Most agree that development, marketing, and medical training regarding drug usage—and 

the resulting over-prescription of opioids—have played a key role. In addition, drug traffickers 

take full advantage of America’s unsecured borders to flood heroin and fentanyl into lucrative 

domestic markets. Solutions directed at these problems are similarly nuanced and multifaceted.

But what if one of the contributing causes is connected to federal spending itself?

During the 2017 debate on repealing and replacing the Affordable Care Act (ACA), 

spending on Medicaid and Medicaid expansion took center stage. Proponents of Medicaid 

expansion often cited its critical role in funding treatment for drug addiction. This argument 

proved so effective that it became a generally accepted truth, as evidenced by a recent New York 

Times article:

Public appreciation for the program [Medicaid] has steadily increased as people come to 

understand its importance in the health care system, including its central role in 

combating the opioid epidemic.2

Yet in a February 2017 Commentary magazine article, Nicholas N. Eberstadt cited a 

study by Alan Krueger, former chairman of the President’s Council of Economic Advisors, that 

paints an entirely different picture of the role Medicaid has played in the opioid 

epidemic.3 Eberstadt argues that Medicaid actually incentivizes—perversely—opioid abuse.

 1 NAT’L CTR. FOR HEALTH STAT., NCHS DATA BRIEF NO 294: DRUG OVERDOSE DEATHS IN THE UNITED STATES,

1999-2016, CTRS. FOR DISEASE CONTROL & PREVENTION (2017), 

https://www.cdc.gov/nchs/products/databriefs/db294.htm. 2 Robert Pear, Years of Attack Leave Obamacare a More Government-Focused Health Law, N.Y. Times (Dec. 26, 

2017), https://www.nytimes.com/2017/12/26/us/politics/republicans-trump-affordable-care-act-obamacare.html. 3 Nicholas N. Eberstadt, Our Miserable 21st Century, COMMENTARY MAG. (Feb. 15, 2017), 

https://www.commentarymagazine.com/articles/our-miserable-21st-century/
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This majority staff report examines those perverse incentives. It does not deny the 

benefits that federal spending on healthcare provides to millions of Americans. Nor does it argue 

that federal spending is a primary cause of overdose deaths. The purpose of this report is to 

simply explore and present evidence that federal spending on healthcare—primarily Medicaid, 

though other federal programs have facilitated illicit use and distribution of opioids—is also 

being used as a funding source that helps to fuel the opioid epidemic.

Medicaid was envisioned by politicians from both parties as “a small program to cover 

poor people’s medical bills.”4 Yet, what began as “something of an afterthought”5 has 

mushroomed into a massive entitlement covering an estimated 70 million people, more than onefifth of the U.S. population.6 In the words of USA Today, “[t]he United States has become a 

Medicaid nation.”7 As Medicaid has grown, evidence has emerged that it is playing a more 

perverse, if unintended role: fueling and ultimately funding the opioid epidemic that is ravaging 

communities across the country. Now, as Congress continues to wrestle with health care reform, 

new data suggest that the ACA Medicaid expansion may be making the opioid epidemic even 

worse.

While Medicaid undoubtedly helps many deserving recipients, it also creates a series of 

incentives for potential abuse of opioids, which are rooted in federal law itself. Patients on 

Medicaid typically “pay no part of costs for covered medical expenses,” other than perhaps a 

small co-payment.8 Federal law requires that Medicaid co-payments and other “cost-sharing” 

borne by Medicaid recipients at lower income levels be nominal, and the Obama Administration 

determined that states could charge those on Medicaid no more than $4 for certain classes of 

drugs.9 For dangerous opioids such as oxycodone, Medicaid co-pays can run as low as $1 for as 

 

(According to demographer Nicholas Eberstadt, the recent study indicated that “nearly half of all prime workingage male labor-force dropouts—an army now totaling roughly 7 million men—currently take pain medication on a 

daily basis.” Eberstadt continued: “But how did so many millions of un-working men, whose incomes are limited, 

manage en masse to afford a constant supply of pain medication? OxyContin is not cheap. As [the book 

Dreamland: The True Tale of America’s Opiate Epidemic] carefully explains, one main mechanism today has been 

the welfare state: more specifically, Medicaid . . . .”). 4 Kate Zernike, Abby Goodnough & Pam Belluck, In Health Bill’s Defeat, Medicaid Comes of Age, N.Y. TIMES

(Mar. 27, 2017), https://www.nytimes.com/2017/03/27/health/medicaid-obamacare.html?_r=0. 5 Id. 

6 CTRS. FOR MEDICARE & MEDICAID SERVS., 2016 ACTUARIAL REPORT ON THE FINANCIAL OUTLOOK FOR MEDICAID 

(2016), https://www.cms.gov/Research-Statistics-Data-andSystems/Research/ActuarialStudies/Downloads/MedicaidReport2016.pdf. 7 Phil Galewitz, This is How the U.S. Has Become a Medicaid Nation, USA TODAY (Nov. 17, 2017), 

https://www.usatoday.com/story/news/nation/2017/11/15/how-u-s-has-become-medicaid-nation/867918001/. 8 U.S. DEP’T OF HEALTH & HUM. SERVS., Frequently Asked Questions: What is the Difference Between Medicare 

and Medicaid?, https://www.hhs.gov/answers/medicare-and-medicaid/what-is-the-difference-between-medicaremedicaid/index.html (last updated Oct. 2, 2015). 9 See Medicaid and Children’s Health Insurance Programs: Essential Health Benefits in Alternative Benefit Plans, 

Eligibility Notices, Fair Hearing and Appeal Processes, and Premiums and Cost Sharing; Exchanges: Eligibility and 
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many as 240 pills—pills that can be sold for up to $4,000 on the street.10 As one longtime local 

prosecutor in opioid-ravaged eastern Kentucky recounted in Dreamland: The True Tale of 

America’s Opiate Epidemic: “We can talk morality all day long, but if you’re drawing five 

hundred dollars a month and you have a Medicaid card that allows you to get a monthly supply 

of pills worth several thousand dollars, you’re going to sell your pills.”11

Many people are falling victim to these temptations, a trend that is potentially destructive 

for Medicaid recipients, who can be especially susceptible to opioid addiction and abuse.

12 In 

courts across the country—overwhelmingly in Medicaid expansion states—prosecutors are 

identifying Medicaid fraud involving opioids. This report highlights nearly 300 criminal cases 

involving at least 1,072 defendants in which people have been convicted or charged of abusing

Medicaid to obtain or sell opioids. The criminal schemes range from simplistic—beneficiaries 

selling opioids obtained through Medicaid—to complex health care fraud involving Medicaid 

reimbursement. For example:

• Many perpetrators specifically targeted 

those on government assistance. In one 

Connecticut case, a ringleader recruited 

Medicaid beneficiaries to obtain nearly 

$200,000 of oxycodone from pharmacies 

through forged prescriptions. “He preyed 

on a lot of low-income people with 

Medicaid cards,” according to a police 

lieutenant who helped oversee the 

investigation. Pharmacists “were very 

trusting just because it was Medicaid,”

said the lieutenant, who added: 

“Absolutely, Medicaid is what allowed him to make so much money.”13

• In addition to prosecuting Medicaid beneficiaries who help divert pills, authorities are

bringing cases against everyone from drug lords who flooded major cities with 

 

Eligibility and Enrollment; Final Rule, 78 Fed. Reg. 42159-42322 (July 15, 2013) (codified in scattered pts. of 42 

C.F.R.), https://www.gpo.gov/fdsys/pkg/FR-2013-07-15/html/2013-16271.htm. 10 The Committee’s Majority staff interviewed a number of law enforcement officials, including a police detective 

from Wisconsin who is a U.S. Department of Justice task force officer focused on drug enforcement. 11 SAM QUINONES, DREAM LAND: THE TRUE TALE OF AMERICA’S OPIATE EPIDEMIC 211 (2015). 12 See Krista Ward, A Nation in Pain: The Medicaid Opioid Crisis, EXPRESS SCRIPTS (June 21, 2017), 

http://lab.express-scripts.com/lab/insights/government-programs/a-nation-in-pain-the-medicaid-opioid-crisis; see 

also Express Scripts, A Nation in Pain: Focus on Medicaid (Oct. 2016). 13 Telephone Interview by S. Comm. on Homeland Sec. & Governmental Aff. Maj. staff with Wallingford, Conn. 

Lieutenant (Nov. 16, 2017). 

“But how did so many millions of unworking men, whose incomes are 

limited, manage en masse to afford a 

constant supply of pain medication? 

OxyContin is not cheap. As Dreamland

carefully explains, one main 

mechanism today has been the welfare 

state: more specifically, Medicaid, 

Uncle Sam’s means-tested healthbenefits program.”

--Nicholas N. Eberstadt, Commentary
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Medicaid-obtained opioids, to a Pennsylvania podiatrist who defrauded the program

by giving pill-seekers painful toe injections.

• Defendants include nurses, pharmacists, and some of the community’s most trusted

members, such as an Indiana doctor who delivered an estimated 4,000 babies. 

• Some who are targeted threaten violence: a Louisiana doctor convicted of overprescribing painkillers in a scheme to bilk Medicaid was caught on tape threatening to 

kill the federal agents investigating him. “They won’t even be able to have an open 

casket funeral,” court documents quote him as saying. 

Because crime is typically under-reported and health care fraud is often not prosecuted, 

the court cases highlighted are likely only a small fraction of the true number of schemes to 

defraud Medicaid for opioids. Nonetheless, the cases show the broader Medicaid-opioid 

connection, a relationship that pre-dates the Medicaid expansion. “Much has been written about 

the opioid epidemic in America and its devastating effects on families and communities,” wrote 

the Medicaid and CHIP Payment and Access Commission (MACPAC), which provides data and 

policy recommendations to Congress. “In many ways, Medicaid is at its center.”14

Medicaid is not the only federal program creating perverse incentives—and serving as a 

funding source—for obtaining and illicitly distributing opioids. Majority staff found hundreds of 

examples of opioid-related fraud in the Medicare program, and additional fraud schemes in 

connection with Veterans Affairs benefits and the food stamp program. The research suggests, 

however, that Medicaid is the federal program most prone to abuse, and the primary government 

funding source for the epidemic. 

This report is not meant to suggest that Medicaid, or any other federal program, is the 

only factor contributing to the opioid epidemic. But if Medicaid is helping to drive the epidemic,

it stands to reason that expanding the program—particularly to people most susceptible to 

abuse—could worsen the problem. The epidemic has indeed spiraled into a national crisis since 

the Obamacare Medicaid expansion took effect in 2014. Drug overdose deaths have risen

rapidly, at a much faster pace than before expansion.

15 An astonishing 97.5 million Americans 

age 12 and over now use prescription pain relievers.

16 

 14 MEDICAID & CHIP PAYMENT ACCESS COMM’N, REPORT TO CONGRESS ON MEDICAID AND CHIP: CHAPTER 2:

MEDICAID AND THE OPIOID EPIDEMIC (2017), https://www.macpac.gov/wp-content/uploads/2017/06/Medicaid-andthe-Opioid-Epidemic.pdf. 15 Josh Katz, Drug Deaths in America Are Rising Faster Than Ever, N.Y. TIMES (June 5, 2017), 

https://www.nytimes.com/interactive/2017/06/05/upshot/opioid-epidemic-drug-overdose-deaths-are-rising-fasterthan-ever.html. 16 Arthur Hughes, et al., Prescription Drug Use and Misuse in the United States: Results from the 2015 National 

Survey on Drug Use and Health, SUBSTANCE ABUSE & MENTAL HEALTH SERVS. ADMIN. NAT’L SURV. ON DRUG 
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In Kentucky, for instance, “the expansion of Medicaid through the Affordable Care Act 

increased the percentage of Clay County residents with Medicaid and gave more of them access 

to free prescription drugs, including pain pills.”17 With about 60 percent of county residents now 

on Medicaid—up from 35 percent in just three years—use of oxycodone has risen while the 

waiting list for the local inpatient drug treatment facility has grown more than 50 percent.

18

Although not indicative of causation, this and other recent evidence suggests, at a minimum, a 

correlation between Medicaid expansion and opioid abuse.

Perhaps Sam Adolphsen, a former Maine Department of Health and Human Services 

official, said it best. “As 15 million able-bodied adults were added to Medicaid through 

Obamacare, the drug problem only grew worse,” he wrote. “As legislators debate the specifics of 

repealing and replacing Obamacare, they should resist the feel-good talking point that Medicaid 

is a silver bullet for solving the opioid epidemic. In reality, Medicaid may be fueling the problem 

and may be largely responsible for starting the epidemic in the first place.”19

 

USE & HEALTH (Sept. 2016), https://www.samhsa.gov/data/sites/default/files/NSDUH-FFR2-2015/NSDUH-FFR2-

2015.htm. 17 Phil Galewitz, Pharmacies Thrive Selling Opioids for Depressed Small Town Pain, KAISER HEALTH NEWS (Feb. 

8, 2017), https://khn.org/news/pharmacies-thrive-selling-opioids-for-depressed-small-town-pain/ (Kaiser Health 

News is a non-partisan news service that covers health care and is considered highly credible). 18 Id. 

19 Sam Adolphsen, Has Medicaid Made the Opioid Epidemic Worse?, NAT’L REV. (July 5, 2017), 

http://www.nationalreview.com/article/449171/medicaids-opioid-problem-has-it-made-epidemic-worse. 
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FINDINGS

Under the direction of Senator Ron Johnson, Chairman of the Senate Committee on 

Homeland Security and Governmental Affairs, majority committee staff searched open-source 

databases for examples of individuals prosecuted for selling opioids obtained using Medicaid 

cards. In just four days, searches identified 261 people convicted nationwide of exploiting 

Medicaid cards to obtain opioids, which were often resold at enormous profit. In July 2017, 

Chairman Johnson reported these findings and other data suggesting a correlation between 

Medicaid and opioid overdoses to the Department of Health and Human Services Office of 

Inspector General.

20 The inspector general is now examining the matter.21

This majority staff report is the product of a more thorough review of court cases and 

other data conducted after Chairman Johnson’s letter to the inspector general. This inquiry 

found:

• Medicaid has contributed to the nation’s opioid epidemic by establishing a series of 

incentives that make it enormously profitable to abuse and sell dangerous drugs.

• Growing evidence indicates that the Medicaid expansion, by providing prescription 

opioids to a wider pool of people, may be worsening the epidemic.

• At least 1,072 people have been convicted or charged nationwide since 2010 for 

improperly using Medicaid to obtain prescription opioids, some of which were then

resold on the nation’s streets. The number of criminal defendants increased 18 percent in 

the four years after Medicaid expanded, 2014-2017, compared to the four years prior to 

Medicaid expansion.

• The criminal activities range from beneficiaries simply selling opioids they obtained 

through the Medicaid program to more attenuated health care fraud involving Medicaid 

reimbursement.

• The cases reflect massive frauds and bizarre twists, from a $1 billion scheme to defraud 

Medicaid and Medicare involving numerous health care providers, to a New York doctor 

and oxycodone distributor who blamed her actions on an alternative personality named 

“Nala.”

 20 See Letter from Ron Johnson, Chairman, S. Comm. on Homeland Sec. & Governmental Aff., to Daniel R. 

Levinson, Inspector Gen., U.S. Dep’t of Health & Hum. Servs. (July 27, 2017) (on file with S. Comm. on Homeland 

Sec. & Governmental Aff.). 

21 Telephone Interview by S. Comm. on Homeland Sec. & Governmental Aff. Majority staff with U.S. Dep’t of 

Health & Hum. Servs. Off. of Inspector Gen. (Oct. 16, 2017). 
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• Prosecutors are increasingly targeting suboxone—a drug that treats opioid addiction but 

itself can be addictive—meaning that the epidemic has reached the point where people 

are defrauding Medicaid using the very drugs designed to help the victims.

• The case numbers are a conservative estimate, because evidence shows crime is underreported;22 health care fraud in particular is rarely detected, including by government 

agencies;23 most health care fraud investigations never lead to prosecutions;

24 and 

Medicaid anti-fraud efforts have fallen short.25

• More than 80 percent of the 298 separate Medicaid-opioids cases identified were filed in 

Medicaid expansion states, led by New York, Michigan, Louisiana, New Jersey, and 

Ohio. The number of criminal cases increased 55 percent in the first four years after 

Medicaid expansion, from 2014 to 2017, compared to the four-year period before 

expansion.

• Other preliminary data suggests a connection between Medicaid expansion and opioid 

abuse. Drug overdose deaths per one million people are rising nearly twice as fast in 

expansion states as non-expansion states,

26 while opioid-related hospital stays paid for by 

Medicaid massively spiked after expansion.27

 22 See Jennifer L. Truman & Rachel E. Morgan, Criminal Victimization, 2015, U.S. DEP’T OF JUST. BUREAU OF JUST.

STAT., (Oct. 2016), https://www.bjs.gov/content/pub/pdf/cv15.pdf. 23 Paul Jesilow & Bryan Burton, Detecting Healthcare Fraud and Abuse in the United States, OXFORD RES.

ENCYCLOPEDIA OF CRIMINOLOGY (Sept. 2017), 

http://criminology.oxfordre.com/view/10.1093/acrefore/9780190264079.001.0001/acrefore-9780190264079-e-275. 24 See U.S. GOV’T ACCOUNTABILITY OFFICE, GAO-16-216, HEALTH CARE FRAUD: INFORMATION ON MOST 

COMMON SCHEMES AND THE LIKELY EFFECT OF SMART CARDS (2016), https://www.gao.gov/assets/680/674771.pdf. 25 LEXISNEXIS, Bending the Cost Curve: Analytics-Driven Enterprise Fraud Control, (LexisNexis Health Care 

White Paper, Apr. 2011), http://lexisnexis.com/risk/downloads/idm/bending-the-cost-curve-analytic-drivenenterprise-fraud-control.pdf. 26 See Letter from Sen. Ron Johnson to Daniel R. Levinson, supra note 20(Chairman Johnson obtained internal data 

compiled by HHS showing drug overdose death rates in expansion versus non-expansion states between 2013 and 

2015). 

27 Healthcare Cost & Utilization Project, Opioid-Related Hospital Use, AGENCY FOR HEALTHCARE RES. & QUALITY,

https://www.hcup-us.ahrq.gov/faststats/OpioidUseServlet?location1=US&characteristic1=06&setting1=

IP&location2=&characteristic2=06&setting2=IP&expansionInfoState=hide&dataTablesState=hide&definitionsState

=hide&exportState=hide (last modified Dec. 13, 2017) (Healthcare Cost and Utilization Project Fast Stats – OpioidRelated Hospital Use interactive database). 
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• Medicaid spending to treat victims is escalating, especially in expansion states. Spending 

on a single opioid overdose medication, for example, increased an astonishing 90,205 

percent between 2011 and 2016, with costs rising “most notably after 2014.”28

• Other federal programs are also being exploited to obtain or sell opioids. In preliminary 

research, majority staff found 243 instances in recent years of opioid-related Medicare 

fraud. In November 2017 alone, the Department of Veterans Affairs had 60 ongoing 

criminal investigations concerning diversion of opioids.

29 Majority staff also found 

instances of opioid-related fraud in the food stamp program involving dangerous drugs 

such as oxycodone, vicodin, hydrocodone, and morphine.

 28 Lisa Clemans-Cope, et al., Rapid Growth in Medicaid Spending on Medications to Treat Opioid Use Disorder 

and Overdose, URB. INST. (June 2017), https://www.urban.org/research/publication/rapid-growth-medicaidspending-medications-treat-opioid-use-disorder-and-overdose. 29 Correspondence between U.S. Dep’t of Veterans Aff. Off. of Inspector Gen. and Maj. Staff, S. Comm. on 

Homeland Sec. & Governmental Aff. (Nov. 9, 2017).
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TABLE OF CONTENTS

EXECUTIVE SUMMARY ............................................................................................................ 1

FINDINGS...................................................................................................................................... 6

TABLE OF CONTENTS................................................................................................................ 9

MEDICAID AND OPIOIDS: A BRIEF HISTORY .................................................................... 10

THE MEDICAID EXPANSION.................................................................................................. 14

MEDICAID, OPIOIDS, AND THE LEGAL SYSTEM .............................................................. 17

CASE STUDIES........................................................................................................................... 20

CASE SUMMARIES.................................................................................................................... 49

CONCLUSION........................................................................................................................... 163
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MEDICAID AND OPIOIDS: A BRIEF HISTORY

Opioids are a class of drugs that range from pain relievers available legally by 

prescription—such as oxycodone, hydrocodone and codeine—to illegal narcotics such as heroin. 

According to MACPAC, “the origins of widespread prescription opioid use can be traced back to 

the 1990s.”30 That is when the medical profession began using pain as a so-called fifth vital sign,

and drug manufacturers heightened their marketing campaigns. Deaths from prescription opioid

overdoses quadrupled from 1999 to 2011,31 as did opioid prescriptions, even though pain levels 

reported by Americans had not changed.32 By 2013, drug overdoses were the nation’s leading 

cause of deaths from injury, prompting Eberstadt to write: “The opioid epidemic . . . that has 

been ravaging and shortening lives from coast to coast is a new plague for our new century.”33

At the same time, Medicaid—barely even noticed when signed into law the same day as 

Medicare in 1965—had exploded from its modest beginnings into what The New York Times

recently called “a behemoth.”34 By 2013, as the federal government and some states ramped up 

to expand the program even more, “over one-fifth (21 percent) of all civilian men between 25 

and 55 years of age were Medicaid beneficiaries. For prime-age people not in the labor force, the 

share was over half (53 percent).”35 As Medicaid grew, it along with other government health 

care programs became “among the biggest suppliers of prescription painkillers.”36 For Medicaid 

patients especially, doctors did not hesitate to pick up their pens: studies cited by the Centers for 

Disease Control and Prevention (CDC) “indicate that opioid prescribing rates among Medicaid 

enrollees are at least twofold higher than rates for persons with private insurance.”37 According 

to another study by Express Scripts, a large prescription benefit plan, the top opioid pain 

medications dispensed for Medicaid members include several of the most potentially deadly: 

Hydrocodone-Acetaminophen; Oxycodone-Acetaminophen, and Oxycodone. The study, entitled 

“A Nation in Pain: Focus on Medicaid,” concluded that the opioid epidemic has harmed

 30 MEDICAID & CHIP PAYMENT ACCESS COMM’N, supra note 14. 31 CTRS. FOR MEDICARE & MEDICAID SERVS., CMCS INFORMATIONAL BULLETIN: BEST PRACTICES FOR ADDRESSING 

PRESCRIPTION OPIOID OVERDOSES, MISUSE AND ADDICTION (Jan. 28, 2016), https://www.medicaid.gov/federalpolicy-guidance/downloads/CIB-02-02-16.pdf. 32 CTRS. FOR MEDICARE & MEDICAID SERVS., CENTERS FOR MEDICARE & MEDICAID SERVICES (CMS) OPIOID 

MISUSE STRATEGY 2016 (Jan. 5, 2017), https://www.cms.gov/Outreach-andEducation/Outreach/Partnerships/Downloads/CMS-Opioid-Misuse-Strategy-2016.pdf. 33 Eberstadt, supra note 3. 34 Zernike, Goodnough & Belluck, supra note 4. 35 Eberstadt, supra note 3. 36 Allysia Finley, Does Medicaid Spur Opioid Abuse?, WALL ST. J. (Sept. 24, 2017), 

https://www.wsj.com/articles/does-medicaid-spur-opioid-abuse-1506289279. 37 CTRS. FOR DISEASE CONTROL & PREVENTION, OVERDOSE DEATHS INVOLVING PRESCRIPTION OPIOIDS AMONG

MEDICAID ENROLLEES –WASHINGTON, 2004-2007 (OCT. 30, 2009),

https://www.cdc.gov/mmwr/preview/mmwrhtml/mm5842a1.htm. 
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Americans of all ages and socioeconomic backgrounds, but has especially affected Medicaid

beneficiaries.

38

When Medicaid recipients fill opioid prescriptions, many find that the dangerous drugs

are available to them virtually free of charge. Under Medicaid, states may charge out-of-pocket 

costs, such as co-payments, for prescription drugs and other medical services, known as “costsharing.”39 Federal law requires that such cost-sharing be limited to a nominal amount for 

Medicaid recipients at lower income levels.

40 In July 2013, the Centers for Medicare &

Medicaid Services (CMS), which oversees Medicaid, issued a regulation defining nominal costsharing for “preferred drugs” as “no more than $4,” and cost-sharing of no more than $8 for nonpreferred drugs. Even in limiting the out-of-pocket costs to Medicaid recipients, CMS voiced 

concern that any costs to beneficiaries could affect their access to care.

41 Today, four years into 

Medicaid expansion, while a majority of states charge Medicaid patients some degree of costsharing for prescription drugs, a significant number do not. According to 2017 data compiled by 

the Kaiser Family Foundation, adults on Medicaid are entitled to free prescription drugs in 12 

states. 42

With people on Medicaid getting more—and more dangerous—opioids so cheaply, tragic 

outcomes followed. Studies show that Medicaid patients misuse opiates at a significantly higher 

level than those with private insurance, and are at a much higher risk of dying. Express Scripts 

put the disparity in stark terms: Medicaid recipients are 10 times more likely to suffer from 

addiction and substance abuse than the general population. Nearly one quarter of people on 

 38 Ward, supra note 12. 39 Ctrs. for Medicare & Medicaid Servs., Medicaid Cost Sharing, MEDICAID.GOV, 

https://www.medicaid.gov/medicaid/cost-sharing/index.html (last visited Jan. 12, 2018). 40 Medicaid and Children’s Health Insurance Programs: Essential Health Benefits in Alternative Benefit Plans, 

Eligibility Notices, Fair Hearing and Appeal Processes, and Premiums and Cost Sharing; Exchanges: Eligibility and 

Enrollment: Final Rule, 78 Fed. Reg. 42159-42322 (July 15, 2013), https://www.gpo.gov/fdsys/pkg/FR-2013-07-

15/html/2013-16271.htm (Response to Comment in Federal Register) (codified in scattered pts. of 42 C.F.R.). 41 Id. (“We agree that a patient’s ability to pay cost sharing imposed for a service can affect a patient's access to care 

and that low-income patients are particularly sensitive to such costs.”). 42 Tricia Brooks, et al., Medicaid and CHIP Eligibility, Enrollment, Renewal, and Cost Sharing Policies as of 

January 2017: Findings from a 50-State Survey, KAISER FAM. FOUND. (Jan. 12, 2017), https://www.kff.org/reportsection/medicaid-and-chip-eligibility-enrollment-renewal-and-cost-sharing-policies-as-of-january-2017-premiumsand-cost-sharing/ 

“Once a pharmacist was found, another problem presented itself: how to pay for the 

prescription. The price of each patient’s prescribed drugs was between eight and twelve 

hundred dollars . . . for junkies, and even for dealers with more discipline, coming up 

with that kind of money was hard. And so the Medicaid card entered our story.”

 —Sam Quinones, Dreamland
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Medicaid have filled an opioid prescription, the study noted, with beneficiaries often going “to 

great lengths, sometimes traveling across states, to find prescribers willing to write excessive 

opiate scripts.”43 In 2016, the Obama Administration’s CMS reported that beneficiaries are at 

three-to-six times greater risk of 

overdosing from prescription 

painkillers than non-Medicaid 

patients. “Research shows the opioid 

epidemic has a disproportionate 

impact on Medicaid beneficiaries,”

CMS concluded.44

Even as Medicaid provided

incentives to misuse opioids, it also 

enabled people to profit. With 

beneficiaries holding “a ‘free’ plastic 

card loaded with unlimited 

government funds that often increases 

access to opioids,”45 everyone from 

doctors to nurses to pharmacists and 

violent drug lords took advantage. While many Medicaid patients hooked on opioids turned to 

the well-intended treatment the program offers, others found that the path to ease their pain lay 

right inside their wallets. In the article for Commentary, Eberstadt quoted Dreamland author 

Quinones as laying out the incentives for financial gain through the eyes of opioid-ravaged 

Portsmouth, Ohio:

[The Medicaid card] pays for medicine—whatever pills a doctor deems that the 

insured patient needs. . . . Medicaid health-insurance cards paid for that 

prescription every month. For a three-dollar Medicaid co-pay, therefore, addicts 

got pills priced at thousands of dollars, with the difference paid for by U.S. and 

state taxpayers. A user could turn around and sell those pills, obtained for that 

three-dollar co-pay, for as much as ten thousand dollars on the street.46

Few would dispute that Medicaid is run and supported by people with good intentions 

and that the program helps many of the nation’s least fortunate. This report is not meant to 

suggest that Medicaid is the only factor contributing to the opioid epidemic, nor that everyone on 

Medicaid responds to its opioid-related incentives in the same ways.

 43 Ward, supra note 12. 44 CTRS. FOR MEDICARE & MEDICAID SERVS., supra note 31. 45 Adolphsen, supra note 19. 46 Eberstadt, supra note 3. 

“The rise of these [federal government disability] 

programs has coincided with the death of work for 

larger and larger numbers of American men not yet 

of retirement age. We cannot say that these 

programs caused the death of work for millions 

upon millions of younger men: What is 

incontrovertible, however, is that they have financed 

it—just as Medicaid inadvertently helped finance 

America’s immense and increasing appetite for 

opioids in our new century.”

 —Nicholas N. Eberstadt, Commentary 
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Yet the evidence is overwhelming that those incentives remain embedded in the very 

structure of the Medicaid program itself. More than half a century after Medicaid began, despite 

the program’s benefits, what is now the nation’s largest health insurer has also helped cause one 

of the nation’s deadliest health crises.47 In the words of Eberstadt: “Medicaid inadvertently 

helped finance America’s immense and increasing appetite for opioids in our new century.”48

 47 Medicaid Pocket Primer, KAISER FAM. FOUND., https://www.kff.org/medicaid/fact-sheet/medicaid-pocket-primer/

(updated June 9, 2017). 

48 Eberstadt, supra note 3. 
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THE MEDICAID EXPANSION

In 2010, the Affordable Care Act expanded Medicaid eligibility to include adults under 

65 with incomes up to 133 percent of the federal poverty level. The expansion took effect on 

January 1, 2014, in most states adopting it. Overall drug overdose deaths, largely from opioids, 

rose seven percent in 2014, compared to six percent the year before, according to CDC data.49 In 

2015, the CDC reported, overdose deaths spiked 11.4 percent. Last year, in 2016, CDC data

show a staggering rise of 21 percent—the largest one-year increase in U.S. history. The surge in 

deaths even fueled a two-year decline in U.S. life expectancy, a first since the early 1960s.50 Of 

the 63,632 total drug overdose deaths in 2016, more than 42,000 were from opioids, a 28 percent 

increase in opioid-related deaths in a single year. A surge in deaths from fentanyl and other 

synthetic opioids was the primary cause, but deaths from prescription painkillers such as 

oxycodone and hydrocodone also spiked 14 percent over 2015. “It’s even worse than it looks,”

Keith Humphreys, an addiction specialist at Stanford University, told The Washington Post. 

With official figures likely under-counting the actual number of opioid deaths by 20 percent or 

more, Humphreys said, “the opioid epidemic alone is deadlier than the AIDS epidemic at its 

peak.”51

Hardest hit have been Medicaid expansion states. Internal data from the Department of 

Health and Human Services (HHS) comparing expansion and non-expansion states show drug 

overdose deaths rose nearly twice as fast per one million people in expansion states between 

2013 and 2015. In 2015, according to CDC figures, the five states with the highest rate of 

overdose deaths were all expansion states: West Virginia; New Hampshire; Kentucky; Ohio and 

Rhode Island. As the CDC points out: “Opioids—prescription and illicit—are the main driver of 

drug overdose deaths.”52

 49 Ctrs. for Disease Control & Prevention, Web-based Injury Statistics Query and Reporting System, 

https://www.cdc.gov/injury/wisqars/index.html (last visited Jan. 12, 2018) (drug overdose data was obtained by 

searching this interactive CDC database). 

50 Lenny Bernstein & Christopher Ingraham, Fueled by drug crisis, U.S. life expectancy declines for a second 

straight year, WASH. POST (Dec. 21, 2017). 51 Christopher Ingraham, CDC Releases Grim New Opioid Overdose Figures: ‘We’re Talking About More Than An 

Exponential Increase’, WASH. POST: WONKBLOG (Dec. 21, 2017), 

https://www.washingtonpost.com/news/wonk/wp/2017/12/21/cdc-releases-grim-new-opioid-overdose-figures-weretalking-about-more-than-an-exponential-increase/?utm_term=.6b5320eee250. 52 Ctrs. for Disease Control & Prevention, Drug Overdose Death Data, 

https://www.cdc.gov/drugoverdose/data/statedeaths.html (last updated Dec. 19, 2017). 
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States that expanded Medicaid have also taken the brunt of a large spike in postexpansion hospital visits, funded by federal and state taxpayers. Opioid-related inpatient hospital 

stays paid for by Medicaid jumped 37 percent in the fourth quarter of 2014, compared to the 

fourth quarter of 2013, according to HHS data. That figure compares to a six percent increase in 

opioid-related hospital stays funded by private insurance during the same period.53 In the fourth 

quarter of 2015, opioid-related hospital stays paid for by Medicaid jumped another 16 percent

over the same period from the year before. HHS also ranked by state the rate per 100,000 people

of opioid-related inpatient hospital stays in 2014, the last year for which data is available. Each 

of the top ten jurisdictions—Maryland; Massachusetts; Washington, D.C; Rhode Island; New 

York; West Virginia; Connecticut; Washington; Oregon and Illinois—expanded Medicaid. All of 

them far exceeded the national rate of hospital stays caused by opioids of 224.6 per 100,000 

people.54

 53 Healthcare Cost & Utilization Project, supra note 27. 54 Healthcare Cost & Utilization Project, Statistical Brief #219, AGENCY FOR HEALTHCARE RES. & QUALITY,

https://www.hcup-us.ahrq.gov/faststats/OpioidUseServlet?location1=US&characteristic1=06&setting1=

IP&location2=&characteristic2=06&setting2=IP&expansionInfoState=hide&dataTablesState=hide&definitionsState

=hide&exportState=hide (updated Jan. 2017). 
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In response to the deluge of victims, Medicaid spending is escalating, especially in 

expansion states. In Kentucky, for example, Medicaid payments for substance abuse treatment 

for people newly enrolled under Obamacare soared 700 percent between the first quarter of 2014 

and the second quarter of 2016.55 Nationwide, spending on Medicaid-covered prescriptions to 

treat opioid addiction and overdoses has increased dramatically in recent years, “most notably 

after 2014,” another recent study found.56 Medicaid spending on naloxone, a federally approved 

medication to treat opioid overdoses, skyrocketed 90,205 percent between 2011 and 2016. The 

increase is especially pronounced in Medicaid expansion states, where Medicaid payments for 

“specialty treatment” for substance use disorder “largely related to opioids” have increased 75 

percent “in expanding states relative to non-expanding states, post expansion.”57

 55 MEDICAID & CHIP PAYMENT ACCESS COMM’N, supra note 14. 56 Lisa Clemans-Cope, et al., supra note 28. 57 Johanna Catherine Maclean & Brendan Saloner, The Effect of Public Insurance Expansions on Substance Use 

Disorder Treatment: Evidence From the Affordable Care Act (Nat’l Bureau of Econ. Res. Working Paper Series, 

Paper No. 23342), http://www.nber.org/papers/w23342.pdf. 
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MEDICAID, OPIOIDS, AND THE LEGAL SYSTEM

The human tragedy of the opioid epidemic is playing out in courtrooms across the nation, 

as prosecutors have increasingly focused on health care fraud. The crackdown reflects the 

conclusions of the U.S. Government Accountability Office, which in 2015 found potential

prescription-drug fraud and abuse among thousands of Medicaid beneficiaries and hundreds of 

prescribers in four states.

58

To better document the role of Medicaid in the opioid crisis, majority staff compiled

information from court cases involving improper use of Medicaid to obtain or sell opioids. 

Searches of open-source databases from 2010 to 2017—four years before Medicaid expansion 

and four years after—resulted in several hundred cases.

59 During that period, the searches show,

at least 1,072 people were convicted or charged nationwide with exploiting Medicaid to obtain or 

sell prescription opioids. The cases—nearly 300 in all—were filed in federal, state, and local

courthouses, with specific charges ranging from Medicaid fraud to drug trafficking. Eighty-five

percent of the cases were in Medicaid expansion states. Prosecutors brought 117 criminal cases 

in the four years before the expansion took effect in 2014. In the four years since expansion, at 

least181 cases have been filed—a 55 percent increase. The number of criminal defendants 

increased 18 percent in the four years after Medicaid expanded, compared to the four years prior 

to Medicaid expansion.

Even this much activity in our courts is just the tip of the proverbial iceberg and likely 

represents only a fraction of the actual amount of Medicaid fraud involving opioids. Government 

reports and studies show that all crime is generally under-reported, while healthcare fraud in 

particular “is rarely detected.”60 Even when law enforcement finds enough evidence to 

investigate, only a small number of cases result in prosecution.

61 Efforts to fight Medicaid fraud 

have been hampered by limited law enforcement budgets and the complexity of some cases. Last 

year, the head of the Department of Justice Criminal Division suggested that the government is 

 58 U.S. GOV’T ACCOUNTABILITY OFF., GAO-15-390, MEDICAID: ADDITIONAL REPORTING MAY HELP CMS OVERSEE 

PRESCRIPTION-DRUG FRAUD CONTROLS (2015), http://www.gao.gov/assets/680/671241.pdf. 59 The searches were conducted in Lexis Advance and PACER, the federal court database, and yielded press releases 

from law enforcement agencies, news articles, and court documents. Search terms included the words Medicaid;

charge; and specific prescription opioids or commonly used brand names, such as oxycodone, OxyContin, 

hydrocodone, Percocet, codeine and suboxone. In some instances, committee staff followed up with phone calls to 

prosecutors’ offices to solidify case details. Cases were counted if they met the criteria—Medicaid fraud involving 

opioids. The searches were thorough; however, they were not scientific or comprehensive, and are intended to 

represent only a sampling.

60 Jesilow &Burton, supra note 23. 61 U.S. GOV’T ACCOUNTABILITY OFF., GAO-12-820, HEALTH CARE FRAUD: TYPES OF PROVIDERS INVOLVED IN 

MEDICARE, MEDICAID, AND THE CHILDREN’S HEALTH INSURANCE PROGRAM CASES (2012), 

http://www.gao.gov/assets/650/647849.pdf; see also U.S. GOV’T ACCOUNTABILITY OFFICE, supra note 24 at 3 n.6, 6 

n.14. 
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still unaware of the extent of Medicaid fraud, 53 years after the program was signed into law. 

“One can only imagine that significant fraud exists in other government health care programs, 

such as Medicaid . . . it’s troubling as a prosecutor and as a taxpayer,” then-Assistant Attorney 

General Leslie R. Caldwell, told a health care trade group.62

Despite the limitations, the searches reveal a compelling universe of cases that show the 

depth and depravity of the Medicaid-opioids connection. The tales of prosecutors, agents and 

judges fighting to safeguard the nation’s streets illustrate that the opioid epidemic is indeed 

raging across America—and that Medicaid is assisting it in a variety of ways. There appears to 

be no limit to the types of schemes used to scam the Medicaid program, from large drug rings 

that employ beneficiaries as “runners” to fill oxycodone prescriptions, to nurses working the 

night shift who steal hydrocodone pills from patients. Illicit painkillers obtained with Medicaid 

cards are being resold at handsome profits nationwide, in places ranging from the streets of 

Milwaukee to a Native American reservation in upstate New York. 

These criminal enterprises are creating a new class of drug dealers, who profit from pills 

that are otherwise legal and at the federal government’s expense. The taxpayer-funded wealth 

can be staggering: one New York physician and accused trafficker lives in a mansion known as 

“The House that Oxycodone Built.” Another owner of dozens of skilled nursing facilities, 

charged with orchestrating a $1 billion scheme to defraud Medicaid (and Medicare), drove a $1.6 

million Ferrari. Some cases test the limits of the bizarre. In Georgia, a woman allegedly 

impersonated her twin sister to get Medicaid-funded oxycodone. 

Even legitimate methods to treat opioid addiction are falling victim to the temptation to 

send Medicaid the bill. An increasing number of recent prosecutions have targeted the illicit use 

of suboxone, which is used to help addicts but can also get them re-hooked. In one Kentucky 

case, the owner of a suboxone clinic is accused of improperly prescribing medication and 

defrauding Medicaid, prompting the state’s attorney general to decry how “wrongful prescribing 

of suboxone is flooding our communities with yet another drug that is killing our children.” All 

of these varied criminal cases highlight the human toll of an epidemic that has captured the

nation’s attention, such as the recent guilty plea of an Ohio doctor and his wife for running a pill 

mill that distributed Medicaid-funded oxycodone. Seven patients died from the illicit 

prescriptions. New York attorney general Eric T. Schneiderman captured the urgency of both the 

opioid crisis and its connection to Medicaid as he in 2016 announced the indictment of a 

suboxone clinic owner accused of defrauding Medicaid. “The opioid epidemic should not serve

 62 Press Release, U.S. Dep’t of Just., Assistant Attorney General Leslie R. Caldwell Speaks at Health Care 

Compliance Association’s 20th Annual Compliance Institute (Apr. 18, 2016), 

https://www.justice.gov/opa/speech/assistant-attorney-general-leslie-r-caldwell-speaks-health-care-complianceassociation-s. 
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as an excuse for unscrupulous individuals to illegally line their own pockets,” he said.

“Medicaid is intended to protect some of our most vulnerable citizens.”63

 63 Press Release, N.Y. Att’y Gen. Off., Schneiderman Announces Indictment And Arraignment of Clinic Operator 

For Allegedly Defrauding Medicaid By Offering Bogus Substance Abuse Treatment (Nov. 29, 2016), 

https://ag.ny.gov/press-release/ag-schneiderman-announces-indictment-and-arraignment-clinic-operator-allegedly. 
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CASE STUDIES

Case Study 1: Drug Dealer “Would Solicit People with Medicaid Cards” to Fill 

Prescriptions for Opioids 

Key Facts

• Ramphis Pacheco ran a drug ring near New Haven, Connecticut that distributed more than 

6,000 oxycodone pills, valued on the street at $185,400.64

• Pacheco deliberately targeted Medicaid recipients to act as “runners” and fill the illicit 

prescriptions using their Medicaid cards in exchange for cash.65

• Police said Pacheco “preyed on” these Medicaid beneficiaries and that numerous pharmacies 

did not question the phony prescriptions “because of the mere fact that [the beneficiaries had] 

Medicaid.”66

Background

According to narcotics detectives in Wallingford, Connecticut, Ramphis Pacheco “was 

the brains behind the [drug] ring” that operated from May through October 2014.67 Pacheco 

took advantage of the unique status of prescription opioids, which can be obtained legally and 

then resold on the street. Using this business model that targeted Medicaid beneficiaries to 

purchase opioids for resale, Pacheco experienced high profits—until a call from a suspicious Rite 

Aid employee eventually tipped off the police.68 After a six-month investigation,69 the probe 

culminated in Pacheco’s arrest in 2015, as well as charges against 11 other defendants who 

served as his accomplices.70

The Scheme

According to one detective involved in the case, Pacheco recruited and “preyed on” 

Medicaid beneficiaries, people who were “down on their luck” and had incentives to earn extra 

money by using their Medicaid cards to obtain opioids. 71 Law enforcement officials described 

 64 Lauren Sievert, Police Identify 11 Charged In Prescription Drug Probe, REC.-J., Feb. 19, 2015, at A03. 65 Telephone Interview with Wallingford, Conn. Detective, supra note 13. 66 Id. 67 CBS CONN., Man Charged with Moving Illegal Pills, http://connecticut.cbslocal.com/2015/02/17/man-chargedwith-moving-illegal-pills/ (last updated Feb. 17, 2015). 68 Telephone Interview with Wallingford, Conn. Detective, supra note 13. 69 See Doug Stewart, Meriden Man Ran Prescription Drug Ring, Victimized at Least 4 Doctors: Police, FOX61

NEWS (Feb. 17, 2015), http://fox61.com/2015/02/17/meriden-man-accused-in-prescription-drug-fraud-operation/. 70 Sievert, supra note 64; see also CBS CONN., supra note 67. 71 Telephone Interview with Wallingford, Conn. Detective, supra note 13. 
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how “Pacheco would recruit people in need of money,”72 and would “solicit[] people” with 

Medicaid cards.73 Pacheco paid these individuals small accounts of money to obtain opioid 

prescriptions from multiple doctors and give him the pills, which Pacheco would then resell on 

the street.74 

Not only did some Medicaid beneficiaries have a strong incentive to work with Pacheco, 

but they turned out to be ideal accomplices: They could fill prescriptions for oxycodone without 

drawing attention from pharmacies. When beneficiaries entered pharmacies “with their Medicaid 

cards and [driver’s] licenses,” they could get opioids because they “were really who they said 

they were,”75 one detective said. According to law enforcement, the trust that pharmacists 

placed in these beneficiaries “was based on the program itself . . . . Medicaid is what allowed 

[Pacheco] to make so much money, with so little risk . . . .” 76 

By targeting indigent people on Medicaid, Pacheco was able to “maximize [his] 

profits.”77 He gave co-conspirators about $50 to fill OxyContin and Percocet prescriptions at 

pharmacies.78 The payments constituted a “minimal amount of money” in return for the 

rewards: 30 mg pills of OxyContin, often as many as 120 per prescription.79 Pacheco’s decision 

to target those on Medicaid who had low-cost access to high-value drugs meant he realized 

higher profits than if he had obtained the pills by other means. Pacheco knew it. He targeted 

“people with Medicaid so the pills would not cost any money,”80 which made “[Pacheco’s] profit 

margin . . . huge.” 81 Law enforcement confirmed that Pacheco could make more than $3,000 

selling the contents of just one bottle of oxy.82 

The Aftermath

Pacheco ultimately pleaded guilty in 2015 to multiple drug-related charges.83 He has 

been serving out his sentence at the Robinson Correctional Institute in Enfield, Connecticut, and 

 72 Stewart, supra note 69. 73 Telephone Interview with Wallingford, Conn. Detective, supra note 13. 74 Stewart, supra note 69. 75 Telephone Interview with Wallingford, Conn. Detective, supra note 13. 76 Id. 77 Id. 78 Id. 79 Stewart, supra note 69. 80 Id. 81 Telephone Interview with Wallingford, Conn. Detective, supra note 13. 82 Id. 83 See Case Docket No. N07M-CR15-0281860-S, Conn. Jud. Branch, 

http://www.jud2.ct.gov/crdockets/CaseDetailDisp.aspx?source=Pending&Key=0218ce6a-9f1e-4a04-aed1-

33e7a9486269 (last updated Jan. 5, 2018) (in “Search by Defendant Name” query, enter: “Pacheco” and “R”); see 

also NBC CONN., Prescription Drug Ring Leader Preyed on Poor to Get Pills: Cops, 
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according to Connecticut’s Department of Corrections, he is scheduled to be released in January 

2018.84 

 

https://www.nbcconnecticut.com/news/local/Prescription-Drug-Ring-Leader-Preyed-on-Poor-to-Get-Pills-Cops292194201.html?amp=y (last updated Feb. 17, 2015). 84 See Connecticut Department of Corrections Inmate Information Query for Ramphis Pacheco, CONN. DEP’T OF 

CORRECTION, http://www.ctinmateinfo.state.ct.us/ (last visited Jan. 5, 2018) (enter information for Ramphis Pacheco 

into search query). 
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Cast Study 2: Bronx Drug Market

Key Facts

• A Bronx grocery store was the site of a massive prescription drug ring trafficking 

oxycodone, HIV medication, and other drugs.85

• The operation targeted Medicaid recipients and enabled them to supplement their income 

and profit from prescriptions, with a ringleader standing at a street corner and directing 

neighborhood residents on Medicaid inside the store. 

• The accused perpetrators are also charged with orchestrating the near-fatal shooting of a 

rival prescription drug trafficker,86 illustrating the violence that can result from the nexus 

between Medicaid and opioids.

Background

Carlos Paniagua; Osvaldo Paniagua, Jr.; Rafael Paniagua; Osvaldo Paniagua; Joan 

Torres; Victor Luna; and Ramon Pichardo were accused of running a prescription drug ring out 

of the Joaquin Grocery & Deli Store (the Joaquin Grocery) in the Bronx, New York.87 The 

operation extended from at least 2008 to June 2014.88 A neighborhood resident described the 

Joaquin Grocery as a “typical bodega, with a few men and women hanging out, socializing.”89 

Neighbors began to suspect illicit activities were being conducted at the store, the resident was 

quoted as saying, when “all the merch[andise] disappeared.”90 

 85 See STS. NEWS SERV., Owners of Bronx Grocery Store that Trafficked in Prescription Drugs Charged in 

Manhattan Federal Court With Orchestrating October 2010 Near-Fatal Shooting of Rival Trafficker, LEXIS 

ADVANCE (Feb. 11, 2015), https://advance.lexis.com/document/?pdmfid=1000516&crid=4c0e5f86-fb70-4977-962fc65756f32e2b&pddocfullpath=%2Fshared%2Fdocument%2Fnews%2Furn%3AcontentItem%3A5F8T-STJ1-JCBFS0N9-00000-00&pddocid=urn%3AcontentItem%3A5F8T-STJ1-JCBF-S0N9-00000-

00&pdcontentcomponentid=8058&pdteaserkey=sr596&ecomp=m4ntk&earg=sr596&prid=0e944718-2613-4e35-

8977-8fc58faff9dd&cbc=0. 86 Id. 87 See Press Release, U.S. Att’y Off. S. Dist. of N.Y., Owners of Bronx Grocery Store That Trafficked In 

Prescription Drugs Charged in Manhattan Federal Court With Orchestrating October 2010 Near-Fatal Shooting of 

Rival Trafficker (Feb. 11, 2015), https://www.justice.gov/usao-sdny/pr/owners-bronx-grocery-store-traffickedprescription-drugs-charged-manhattan-federal. 88 See Compl., United States v. Paniagua, No. 1:14-cr-00547 (N.Y. Magis. Ct. 2014),

https://www.justice.gov/archive/usao/nys/pressreleases/June14/JoaquinGroceryArrestsPR/Paniagua%20et%20al%2

0Complaint%20(signed).pdf. 89 Ben Shanahan & Joe Hirsch, Family Drug Ring Busted in Melrose, MOTT HAVEN HERALD (June 24, 2014), 

http://www.motthavenherald.com/2014/06/24/family-drug-ring-busted-melrose/. 90 Id.
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The Scheme

The drug transactions at the Joaquin Grocery typically “took place in a small room 

behind a door at the back of the store, where Medicaid beneficiaries provided their bottles to the 

defendants for cash.”91 Having amassed large quantities of Medicaid-funded OxyContin pills, 

the defendants then re-sold them on the street.92 

As prosecutors explained, the scheme showcased the financial incentives that can lead to 

Medicaid being exploited to obtain or sell opioids. The ringleaders would “profit by exploiting 

the difference between the cost to the patient of obtaining bottles of prescription drugs through 

Medicaid—which typically is zero—and the hundreds of dollars per bottle that pharmacies or 

individuals pay to purchase those drugs.”93 

A conversation between an FBI confidential source and a participant in the scheme 

demonstrated its profitability. The confidential source, seeking to bring in 190 Percocets to the 

grocery, asked the participant how much a single Percocet pill would cost. “Four dollars. Four, 

four and a half,” the participant responded.94 In other words, at $4 a pill, a bottle with 190 

Percocets would generate a street value of $760. The scale of the operation was enormous: the 

cars allegedly used in the scheme contained 1,000 bottles of prescription medication and 

hundreds of loose pills.95

To attract business, according to informants, Carlos Paniagua would stand at a restaurant 

on the corner of 150th Street and Morris Avenue directing Medicaid beneficiaries to the Joaquin 

Grocery.96 In October, 2010, the scheme turned violent. When a rival prescription drug 

trafficker attempted to steal the grocery’s illegal prescription drug supply, participants in the 

Joaquin drug ring alleged shot their rival, almost killing him.97 

Aftermath

A number of the accused perpetrators have pleaded guilty, while charges are pending for 

others. Preet Bharara, then-U.S. attorney in Manhattan, stated that “instead of earning an honest 

living at their grocery store, the defendants turned it into a drug market that took advantage of 

 91 Press Release, Fed. Bureau of Investigation, Six Charged in Manhattan Federal Court for Operating Illegal 

Prescription Drug Ring Out of Bronx Grocery Store (June 24, 2014), https://www.fbi.gov/contact-us/fieldoffices/newyork/news/press-releases/six-charged-in-manhattan-federal-court-for-operating-illegal-prescription-drugring-out-of-bronx-grocery-store. 92 Id. 

93 Compl. at 21, United States v. Paniagua, supra note 88. 94 Id. 

95 Shanahan & Hirsch, supra note 89. 96 Compl. at 12, United States v. Paniagua, supra note 88. 97 See STS. NEWS SERV., supra note 85. 
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impoverished Medicaid beneficiaries, spawned violence in its neighborhood, and endangered 

public health and safety.”98

According to George Venizelos, the FBI’s former assistant director in charge, the 

defendants “defrauded Medicaid and the U.S. taxpayers while threatening the health of patients 

whose prescriptions were filled with diverted, mishandled and repackaged medications.”99

After the arrests, the Joaquin market closed for business, prompting a longtime resident 

to say the neighborhood breathed a “sigh of relief,” adding “you have no idea how glad we 

are.”100 Nevertheless, the damage had been done, with Medicaid beneficiaries and defendants 

profiting from diversion of taxpayer-funded pills to the streets.

 98 Press Release, U.S. Att’y Off. S. Dist. of N.Y, Six Charged In Manhattan Federal Court For Operating Illegal 

Prescription Drug Ring Out of Bronx Grocery Store (June 24, 2014), https://www.justice.gov/usao-sdny/pr/sixcharged-manhattan-federal-court-operating-illegal-prescription-drug-ring-out-bronx. 99 Id. 100 Shanahan & Hirsch, supra note 89. 
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Case Study 3: Pharmacist Defrauds Medicaid, Filling Opioid Prescriptions from 

“Dr. T” and “Dr. Z”

Key Facts

• David Russo, a Maryland pharmacist, admitted in federal court that he improperly billed 

Medicaid for hundreds of thousands of illicit prescriptions for opioids, defrauding the 

program out of at least $90,000.101

• Russo knew that two physicians—identified only as “Dr. T” and “Dr. Z”—wrote 

prescriptions for excessive amounts of oxycodone and methadone, yet he continued to 

fraudulently bill Medicaid for these prescriptions.102

• In a relatively short time, Russo became one of “the largest dispensers of [oxycodone and 

methadone] in the entire State of Maryland” before law enforcement caught on to his 

scheme.103

Background

“Licensed pharmacists know that it is improper to . . . fill a prescription that is issued

outside the usual course of medical treatment.”104 Yet that is exactly what David Russo admitted 

to doing, at taxpayer expense. 105 Russo, a licensed pharmacist, owned and operated Western 

Maryland Pharmaceutical Service, Inc.,106 doing business as “Russo’s RX,” in Hagerstown, 

Maryland.107 In May 2013, federal prosecutors filed charges against Russo after he unlawfully 

“submitted claims for controlled substances” for approximately two years.108 Russo ultimately 

defrauded Medicaid and Medicare, receiving payments from the government totaling in the tens 

of thousands of dollars.109 

 101 See Press Release, U.S. Att’y Off. Dist. of Md., Hagerstown Pharmacist Sentenced to 30 Months In Prison for 

Health Fraud For Improperly Billing Medicare And Medicaid (Aug. 22, 2013), https://www.justice.gov/usaomd/pr/hagerstown-pharmacist-sentenced-30-months-prison-health-care-fraud-improperly-billing. 102 Russo also fraudulently billed Medicare. See Plea Agreement Attachment A-Statement of Facts at 2, United 

States v. Russo, No. 1:13-cr-00240-GLR (D. Md. Dec. 19, 2017), ECF No. 8. 103 Id. at 3. 104 Id. at 1. 105 Id. 106 Compl. at 1, United States v. Russo, No. 1:13-cr-00240-GLR (D. Md. Dec. 19, 2017), ECF No. 1. 107 U.S. Att’y Off. Dist. of Md. Press Release, supra note 101. 108 See Compl. at 3, United States v. Russo, supra note 106 (detailing Russo’s running this scheme from “sometime 

in or about January 2009 until in or about December 2010, in the State and District of Maryland, and elsewhere”).

109 See Plea Agreement Attachment A at 3, United States v. Russo, supra note 102. 
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The Scheme

Russo established a reputation with customers for his willingness to fill prescriptions for 

oxycodone and methadone that “he knew were issued outside of the legitimate medical 

course.”110 According to the Justice Department, “[t]he sheer number of prescriptions for 

oxycodone and methadone indicated that the prescriptions were not valid.”111 For example, 

“[f]rom January 1, 2009 through December 31, 2010, Russo’s Rx dispensed over 700,000 dosage 

units of oxycodone and 117,000 dosage units for methadone for . . . invalid prescriptions” 

written by doctors.112 This volume of prescriptions made Russo “one of the largest dispensers of 

[oxycodone and methadone] in the entire State of Maryland.”113

Most of the illicit prescriptions were written by “Dr. T” and “Dr. Z,” whose offices were 

not close to Russo’s pharmacy.114 In fact, when Drug Enforcement Administration (DEA) 

agents interviewed other pharmacies located near Russo’s Rx, each of them “advised the DEA 

about the[ir] concerns about the legitimacy . . . of Dr. T and Dr. Z’s prescriptions.”115 Believing 

that the patients were “pharmacy-shopping,” these pharmacies refused to fill the 

prescriptions. 116 Russo took a different approach. Customers “knew that Russo’s Rx was the 

‘one and only pharmacy that would fill’” prescriptions from Dr. T and Dr. Z.117 

Russo had others reasons to know that he was filling suspect prescriptions. Some 

customers came to him from out of state.118 Others called “ahead of time to ask [Russo] if he 

had [O]xyContin ‘in stock’ and how much it would cost.”119 Some clients came together in 

vans.120 Still, Russo continued providing pills. 

Not only did Russo develop a reputation for filling prescriptions that Medicaid would 

reimburse, he also accepted cash from certain patients.121 Russo even had a cash counting 

machine at his pharmacy, which helped him count at least 55 cash deposits totaling $862,000 

between December 2009 and June 2010.122 

 110 See generally U.S. Att’y Off. Dist. of Md. Press Release, supra note 101. 111 Id. 112 Id.; see also Plea Agreement Attachment A at 3, United States v. Russo, supra note 102. 113 Plea Agreement Attachment A at 3, United States v. Russo, supra note 102. 114 Id. at 2. 115 Id. 116 See Id. 117 Id. 118 Id. 

119 Id. 120 Id. 121 Id. 122 Id. 
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Ultimately, Russo’s scheme not only defrauded taxpayers, but also enabled the black 

market for opioids. The DEA interviewed some of Russo’s customers, who “admitted buying 

the drugs for resale—sometimes in the parking lot of the pharmacy.”123 

Aftermath

In June 2013124—one month after the Department of Justice filed charges125—Russo 

pleaded guilty to health care fraud for defrauding Medicaid and Medicare.126 A federal judge 

sentenced him to 30 months in prison and ordered him to pay restitution of more than $200,000. 

Russo also forfeited $39,000 in cash agents seized from his pharmacy.127 As part of his plea 

agreement, Russo surrendered his pharmacy license.128

As Russo was sentenced, Gary Tuggle, then-Assistant Special Agent in Charge of 

Baltimore’s DEA District Office, said the case exemplified how “[p]rofessionals, such as doctors 

and in this case a pharmacist, who knowingly abuse their power and the public trust are drug 

dealers, no different than the street dealers that sell illicit drugs.”129

 123 Id. 124 See Plea Agreement at 9, United States v. Russo, No. 1:13-cr-00240-GLR (D. Md. Dec. 19, 2017), ECF No. 8 125 See Compl. at 1, United States v. Russo, supra note 106. 126 See U.S. Att’y Off. Dist. of Md. Press Release, supra note 101. 127 Id. 128 Plea Agreement at 7, United States v. Russo, supra note 124. 129 See U.S. Att’y Off. Dist. of Md. Press Release, supra note 101. 
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Case Study 4: A $1 Billion Fraud

Key Facts

• On July 22, 2016, the Department of Justice charged Philip Esformes, Odette Barcha, and 

Arnaldo Carmouze with conspiracy, money laundering, and health care fraud in 

connection with a $1 billion scheme involving numerous Miami-based health care 

providers.

130 Esformes and Barcha were also charged with obstruction of justice. The

case is the Justice Department’s largest single criminal health care fraud prosecution ever 

brought against individuals.131

• Part of the scheme included giving pill-seekers opioids to entice them to participate.

132

• The conspirators are charged with fraudulently billing Medicaid and Medicare for about 

14,000 patients.133

• In court documents, prosecutors accuse Esformes of participating in kickbacks with 

corrupt medical professionals that included “high-end escorts” being flown to Orlando 

and “chauffeured in limousines for liaisons with Esformes at the Ritz-Carlton Hotel.”134

• The scheme allegedly fueled an extravagant lifestyle for Esformes, who drove a $1.6 

million Ferrari. 

Background

Philip Esformes operated the Esformes Network, a group of more than 30 skilled nursing 

homes and assisted living facilities that served thousands of Medicaid and Medicare patients. A 

man who “seemed to live in perpetual motion,” he and his father and business partner “took in 

millions of dollars annually from federal programs for the sick and disabled.”135 Esformes was 

also known as a prominent philanthropist; he and his family gave “millions of dollars to 

synagogues, schools and medical facilities in the United States and Israel.”136

 130 Press Release, U.S. Dep’t of Just., Three Individuals Charged in $1 Billion Medicare Fraud and Money 

Laundering Scheme (July 22, 2016), https://www.justice.gov/opa/pr/three-individuals-charged-1-billion-medicarefraud-and-money-laundering-scheme. 131 Id. 132 See Kate O’Keeffe, Justice Department Charges Three in $1 Billion Medicare Fraud Scheme in Florida, WALL 

ST. J. (July 22, 2016), https://www.wsj.com/articles/justice-department-charges-three-in-1-billion-medicare-fraudscheme-in-south-florida-1469218807. 133 See Jay Weaver, Bribes to Low-Paid State Worker Key to $1 Billion Miami Medicare Fraud Case, Prosecutors 

Say, MIAMI HERALD (July 29, 2017), http://www.miamiherald.com/news/local/article164232522.html. 134 David Jackson & Gary Marx, Nursing Home Operator From Chicago Jailed as Feds Allege $1 Billion Scheme, 

CHI. TRIB. (Oct. 4, 2016), http://www.chicagotribune.com/news/watchdog/ct-philip-esformes-jailed-met-20161002-

story.html. 135 Id. 136 Id.
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The Scheme

Esformes, Barcha and Carmouze are accused of admitting people to the Esformes 

Network who did not qualify for skilled nursing home care or for placement in an assisted living 

facility. Specifically, patients who were drug addicts, prosecutors said, were prescribed opioids 

such as OxyContin to entice them to stay in the facilities.137 Once admitted, the patients would 

receive medically unnecessary services that were billed to Medicaid and Medicare. The 

Esformes facilities earned more than $200 million in government reimbursements for fraudulent 

services.138 Esformes, Barcha and Carmouze are also accused of receiving kickbacks by steering 

these beneficiaries to other health care providers, who would also perform medically 

unnecessary treatments—also billed to Medicaid and Medicare. 

The fraudulent scheme reportedly fueled Esformes’ lavish lifestyle, which included $2.4 

million of leased luxury vehicles, $2.1 million of leased private jets, $8.9 million spent to pay 

credit card bills, and $960,000 spent to purchase watches.139 As of August 2014, Esformes 

reported personal savings and assets worth $78 million.140

According to prosecutors, Esformes took active measures to cover up his activities. In 

2006, he had paid $15.4 million to resolve civil federal health care fraud claims for conduct that 

was “essentially identical” to the later criminal scheme.”141 Following the payment, Esformes 

and his co-conspirators employed sophisticated money laundering techniques to hide their 

identities from investigators. 

Esformes’s efforts to cover his tracks also reportedly reached to the state government of 

Florida. In February 2017, the Justice Department charged Esformes with bribing a former state 

employee at the Florida Agency for Health Care Administration. Esformes’s business associates, 

the charges alleged, paid the former employee $200 for information about each patient complaint 

and $3,000 for each unannounced inspection schedule.142

 137 O’Keeffe, supra note 132. 138 Brian Silber, Philip Esformes, Odette Barch, and Arnaldo Carmouze of Miami, Florida Arrested in Connection 

to $1 Billion Medicare Fraud Scheme, COURTHOUSE INSIDER (July 25, 2016), 

https://www.briansilber.com/2016/07/philip-esformes-miami-florida-arrested-alleged-involvement-1-billionmedicare-fraud-scheme.html. 139 Id. 140 Id. 141 U.S. Dep’t of Just. Press Release, supra note 130. 142 Weaver, supra note 133. 
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Aftermath

The case is still pending, and all three defendants have pleaded not guilty.143 A lawyer for 

Esformes says he “adamantly denies any wrongdoing” and “stands by his lifelong record of hard 

work and success, of providing quality service to people in his nursing homes, and of helping 

persons in need.”144 But the allegations illustrate not only potential misuse of taxpayer-funded 

benefits, but also how desperate addicts can inadvertently participate in and facilitate the opioidrelated fraud of health care providers.

 143 See Criminal Doc., United States v. Esformes, No. 1:16-cr-20549-RNS (S.D. Fla. 2016) (on file with S. Comm. 

on Homeland Sec. & Governmental Aff.).

144 Jackson & Marx, supra note 134. 
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Case Study 5: Small-town doctor defrauds Medicaid, endangers patients with 

opioids 

Key Facts

• In 2013, state prosecutors charged a small-town Indiana OB/GYN—who had delivered 

an estimated 4,000 babies in his career—with Medicaid fraud, theft, dealing in controlled 

substances, and corrupt business influence.145

• The probe began after two pharmacies told authorities that Dr. Paul Kelty was 

“prescribing the powerful and highly addictive painkiller hydrocodone to patients who 

appeared to be drug abusers.”146

• Court documents stated that Kelty “repeatedly overbilled Medicaid for office visits” with 

female patients,147 and prosecutors say the scheme specifically targeted Medicaid 

beneficiaries and the Medicaid program.148

Background

Kelty, an obstetrician and gynecologist, was a fixture in the small Indiana town of 

Corydon, where he had delivered babies for decades.

149 His office was “just down the road from 

the Harrison County Justice Center.”150 In 2015, Kelty pled guilty to charges of Medicaid fraud 

and corrupt business practices.151 The court sentenced him to four years of home incarceration 

and required him to pay more than $22,000 in restitution.152 Kelty also lost his license to 

practice medicine.153

The Scheme

The investigation began in February 2013, when investigators with the Indiana state 

police, the state attorney general’s office, and the Harrison County prosecutor’s office raided 

 145 See Grace Schneider, Doctor Freed as Bond is Reduced, COURIER-J (Louisville, Ky.), June 1, 2013, at B1. 146 Id. 147 Id. 148 148 Telephone Interview by S. Comm. on Homeland Sec. & Governmental Aff. Staff with Otto Schalk, Harrison 

County’s Prosecuting Att’y (Nov. 29, 2017). 

149 Schneider, supra note 145. 150 Marissa Alter, Bond Lowered for Doctor Accused of Sex Abuse, Medicaid Fraud, WLKY NEWS (May 31, 2013), 

http://www.wlky.com/article/bond-lowered-for-doctor-accused-of-sex-abuse-medicaid-fraud-1/3743889. 151 Southern Indiana Doctor Sentence for Medicaid Fraud, Corrupt Business Practices, BUS. J. (Louisville, KY.), 

Aug. 7, 2015, https://www.bizjournals.com/louisville/blog/morning_call/2015/08/southern-indiana-doctorsentenced-for-medicaid.html. 152 As detailed below, Dr. Kelty also forfeited $700,000 in a related civil case. See Id. 153 Id.
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Kelty’s office in Corydon.154 The affidavit for the search warrant noted that at least six of 

Kelty’s patients had fatally overdosed since 2008.155 

The following month, the Indiana Attorney General petitioned the state licensing board 

to suspend Kelty for “practicing pain management by issuing monthly controlled substance 

prescriptions to patients, in spite of the fact his specialty is OB/GYN” and other alleged 

violations, “all presenting an alleged clear and present risk to the public.”156

The Indiana Attorney General’s investigation found that between 2009 and 2012, Kelty

treated 1,283 patients and wrote 31,490 prescriptions totaling 1.08 million pills.157 In a 78-page 

affidavit filed with Kelty’s arrest in May 2013, Harrison County Prosecutor Otto Schalk stated

that “Dr. Kelty was requiring his patients to submit to unnecessary office visits and procedures, 

which ultimately would be turned in as unnecessary claims constituting Medicaid fraud.”158 

Schalk added: “Virtually all of Kelty’s patients were being prescribed hydrocodone and some 

patients were receiving a cocktail of hydroco[do]ne and Xanax, and that combination of those 

taken concurrently is eight times more likely to result in an overdose.”159

In treating one Medicaid patient—who was “an inappropriate candidate for chronic 

opioid therapy” due to “[h]er history of sexual and physical abuse, as well as a history of 

illegally obtaining drugs from [her] family members”—Kelty neither took a medical history nor 

performed an initial physical examination. 160 Kelty simply “prescribed opiates to her without 

medical legitimacy” and maintained the prescriptions throughout the patient’s pregnancy. 161 As 

a result, the patient’s daughter was born “with a diagnosis of neonatal abstinence syndrome.”

The baby spent nearly two months in a neonatal intensive care unit.162 The expert reviewing Dr. 

Kelty’s files concluded that “[b]oth mother and child were put in jeopardy as a result of [Dr. 

Kelty’s] inappropriate and dangerous prescribing habits, all the while being reimbursed by 

Medicaid.163

 154 Alter, supra note 150. 155 Id. 156 Order of Surrender at 1, In Re The License To Practice Medicine in the Commonwealth of Kentucky Held by 

Paul D. Kelty, M.D., License No. 20164, 2000 Edsel Lane, Corydon, Indiana 47112, No. 1498 (Ky. B. Medical 

Licensure 2014), http://www.state.ky.us/agencies/kbml/finalorders/20164.pdf. 157 Alan Stewart, OB-GYN Faces 22 Charges, CORYDON DEMOCRAT (June 5, 2013), 

http://www.corydondemocrat.com/Articles-News-i-2013-06-04-226056.114125-OBGYN-faces-22-charges.html 158 Alter, supra note 150. 159 Id. 160 Aff. of Dr. Timothy E. King at 4, Indiana v. Paul Kelty, No. 31D01-1305-FB-365 (Harrison Cty. Super. Ct. May 

31, 2013) (Committee staff obtained court records from the Harrison County Prosecutor’s Office. Not all of the 

records are available online). 

161 Id. 162 Id. 163 Id.
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Another Medicaid patient visited Kelty every one to three weeks, and Kelty “routinely 

refilled her hydrocodone prescriptions” despite his knowledge “of [the patient’s] excessive drug 

seeking.”164 In this case, Dr. Kelty knew the patient was getting additional hydrocodone from a 

dentist and “that she patronized multiple pharmacies to obtain opiates.”165

Aftermath

Dr. Kelty ultimately pleaded guilty to one count of Medicaid fraud and one count of 

corrupt business influence.166 A judge sentenced him to four years of home incarceration.167 Dr. 

Kelty also forfeited $700,000 in a companion civil action,168 some of which was used to fund 

and produce a documentary concerning the dangers of prescription-drug and heroin addiction.169

But Kelty’s willingness to take advantage of Medicaid beneficiaries and prescribe drugs—

furthering addiction and creating opportunity for pill diversion—had already taken its toll on the 

community he served for so long.

 164 Id. at 7. 165 Id. 166 See J. of Conviction at 1, Indiana v. Paul Kelty, No. 31D01-1305-FB-365 (Harrison Cty. Super. Ct. May 31, 

2013). 

167 Id. 168 Id. at 2.

169 See generally A Hit of Hell: The Addictive Grip of Heroin, FACEBOOK (last updated May 11, 2017),

https://www.facebook.com/hitofhell/ (describing documentary’s focus on prescription-drug and heroin abuse).
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Case Study 6: Taxpayer Dollars Down the Toilet

Key Facts

• On April 15, 2015, Patricia A. Hoehn pleaded guilty in a scheme to use opioids to 

defraud the Missouri Medicaid program.170

• Hoehn, a licensed pharmacist, admitted in federal court that she used three prescriptions 

for a cough syrup containing hydrocodone, while falsely representing to Medicaid that 

the medication had been prescribed to three children.171

• In her plea agreement, Hoehn admitted that she destroyed her cell phone by putting it in a 

toilet to prevent law enforcement officials from obtaining incriminating information.172

While her case involves smaller amounts of Medicaid dollars than others, it illustrates the 

depths to which some defendants will go to conceal the use of Medicaid to obtain 

opioids.

The Scheme

Hoehn, of Farmington, admitted in court documents that she used “three prescriptions

that falsely stated and represented to Medicaid that a licensed medical doctor had prescribed a 

cough syrup that contained hydrocodone, a narcotic opioid pain medication, to three 

children.” In reality, the documents say, “the prescriptions were false because no licensed 

medical doctor had actually prescribed the drugs to these three children on these three dates, and 

Hoehn knew that the children were not actually receiving these drugs.”173

Hoehn, who was the pharmacist-in-charge of the pharmacy where she worked, stated that 

she had ordered the drugs for three minor children of co-workers.

174 Over the span of 19 

months, Hoehn “presented 28 prescriptions for Tussionex—a cough syrup containing the opiate 

narcotic hydrocodone—to the Medicaid program. Some of the Tussionex prescriptions were in 

Hoehn’s handwriting. Ultimately, Medicaid funded $4,794 worth of Tussionex.”175

After a Missouri State Highway Patrol Trooper asked to examine her cell phone, Hoehn 

admitted176 that she destroyed the phone to prevent law enforcement officers from “searching it 

 170 Press Release, U.S. Att’y Off. E. Dist. of Mo., Farmington, Missouri, Pleads Guilty to Three Medicaid Fraud 

Charges (Apr. 15, 2015), https://www.justice.gov/usao-edmo/pr/farmington-missouri-pharmacist-pleads-guiltythree-medicaid-fraud-charges. 171 Id. 172 Id. 173 Id. 174 Gov’t Sent’g Mem. at 2, United States v. Hoehn, No. 4:14 CR 00312 (CEJ) (E.D. Mo. 2015), ECF No. 43. 175 Id. at 1-2. 176 Id. at. 3. 
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for text messages regarding these false prescriptions.”177 When asked why she went so far as to 

place her phone in the toilet, Hoehn said “because everyone told me to.”178

Aftermath

Hoehn pleaded guilty in April 2015 to three felony counts involving false statements to 

the Missouri Medicaid program. The Government’s sentencing memorandum pointed out that

Hoehn caused financial loss to the Missouri Medicaid program, which already faced funding

limitations.

179 Prosecutors emphasized that her actions had deprived the program of resources to 

help Missouri residents in need. Hoehn’s false statements, the memo said, “further impeded the 

program from achieving its important policy objectives of taking care of low income patients.”180

On July 30, 2015, a federal judge sentenced Hoehn to three years of probation.181 She 

was ordered to perform 100 hours of community services and pay $4,794 in restitution to the 

Missouri Medicaid Fraud Control Unit.182

 177 U.S. Att’y Off. E. Dist. of Mo. Press Release, supra note 170. 178 Pharmacist Charged with Tampering, DAILY J. ONLINE, Jan. 10, 2013, 

http://dailyjournalonline.com/news/local/pharmacist-charged-with-tampering/article_b9dcb520-5b3b-11e2-8c28-

001a4bcf887a.html. 179 Gov’t Sent’g Mem. at 3, United States v. Hoehn, supra note 174. 180 Id. 181 DAILY J. ONLINE, supra note 178. 182 Id. 
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Case Study 7: Doctor’s Alleged Behavior Highlights Suboxone-Related Medicaid 

Fraud

Key Facts

• Curtis Edens, a Kentucky doctor who operated a Suboxone clinic that catered to Medicaid 

beneficiaries, stands accused of illegally prescribed addiction-treatment drugs and defrauding 

Medicaid.183 He has pleaded not guilty.184

• Dr. Edens’s Suboxone clinic was so crowded with patients, some from out of state, that 

patients had difficulty finding parking. 

• The case reflects an escalating problem: Medicaid fraud relating to abuse of an opioid, 

Suboxone, that is itself used to treat opioid addiction.

Background

Dr. Edens specialized in “obstetrics/gynecology,”185 but was also a “Suboxone clinic 

doctor.”186 He surrendered his Kentucky medical license in November, 2016,187 and was living 

in South Carolina when a grand jury in Lawrence County, Kentucky indicted him in May 

2017.188 Dr. Edens waived extradition and returned to Lawrence to face the charges189 in an

investigation overseen by the Kentucky Attorney General’s Office of Medicaid Fraud and 

Abuse.190 The grand jury charged Dr. Edens with Medicaid fraud, improperly prescribing a 

controlled substance, and theft by deception.191 

 183 See Bill Estep, Former Suboxone Clinic Doctor Charged With Improper Prescribing, Health Care Fraud, 

Lexington Herald Leader (May 15, 2017), http://www.kentucky.com/news/state/article150608602.html. 184 Update: Former Pain Clinic Doctor in Lawrence County, Ky. Enters Not Guilty Plea, WSAZ News, June 9, 

2017, http://www.wsaz.com/content/news/Former-pain-clinic-doctor-indicted-in-Lawrence-County-Ky422368233.html. http://www.wsaz.com/content/news/Former-pain-clinic-doctor-indicted-in-Lawrence-County-Ky422368233.html

185 See Agreed Order of Surrender at 2, In Re The License To Practice Osteopathy In the Commonwealth of 

Kentucky Held By Curtis D. Edens, D.O., License No. 02610, 108 West Madison Street, Louisa, Kentucky 41230-

1327, No. 1355 (Ky. B. Licensure 2016), http://www.state.ky.us/agencies/kbml/finalorders/02610.pdf. 186 Press Release, Kentucky.gov, Beshear: Former Eastern Kentucky Suboxone Clinic Doctor Arraigned in 

Lawrence Circuit Court (June 9, 2017), http://kentucky.gov/Pages/Activitystream.aspx?n=AttorneyGeneral&prId=345. 187 See Agreed Order of Surrender, supra note 185 at 10, 12. 188 Former Louisa Suboxone Clinic Doctor Indicted on Fraud, Theft, Improperly Prescribing, DAILY INDEPENDENT, 

May 15, 2017, http://www.dailyindependent.com/news/former-louisa-suboxone-clinic-doctor-indicted-on-fraudtheft-improperly/article_020da16e-399b-11e7-a60d-7b744c2fd9ce.html. 189 Id. 

190 See Indictment at 5, Kentucky v. Edens, No. 17-CR-00041 (Lawrence Cty. Cir. Ct. May 12, 2017). 

191 Id. at 1-2; see also Press Release, Kentucky.gov, supra note 186. 
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The Scheme

In 2016, Dr. Edens operated a Suboxone clinic at which prosecutors allege he illegally 

charged Medicaid beneficiaries cash for his services.192 Prosecutors say he also defrauded 

Medicaid by improperly prescribing Suboxone to patients.193 Although little additional 

information has been made public in the criminal case, Kentucky’s Board of Medical Licensure 

has previously addressed Dr. Edens’s medical methods.

In a November 2016 Order for Dr. Edens to surrender his license, the Board described 

what it called troubling details of Dr. Eden’s practice and his treatment of patients.194 Dr. Edens 

agreed to the Board’s stipulation of facts, which concluded that he: 

 

• prescribed Suboxone to pregnant women, which experts say can cause miscarriage or 

premature labor; 

• consistently failed to document any physical exams; 

• consistently documented urine drug tests as negative when they were positive; and

• failed to meet minimum standards in prescribing and monitoring medications.195

The Board’s Order also noted that when police responded to a call from Dr. Edens’s 

clinic in 2011,196 they found “that the parking area was so crowded that patients had to park” 

anywhere they could.197 The Board noted that “numerous vehicles were from surrounding 

counties and several were from out of state.”198

Aftermath

The prosecution of Dr. Edens continues, and the case reflects a larger trend: abuse and 

diversion of Suboxone. Kentucky Attorney General Andy Beshear asserts that Suboxone “is 

being actively abused by thousands of Kentuckians.”199 In an increasing number of instances 

nationwide, Medicaid is footing the bill for these illicit prescriptions.

 192 Press Release, Kentucky.gov, supra note 186. 193 See Indictment at 4-5, Kentucky v. Edens, supra note 190 (alleging that “from December 20, 2011 through July 

12, 2012,” Edens “knowingly or wantonly devised a scheme” to defraud the Kentucky Medical Assistance 

Program). 

194 Agreed Order of Surrender at 1, supra note 185. 195 Id. at 12 (reflecting Edens’s agreement and signature). 

196 Id. at 2.

197 Id. 

198 Id. 

199 Laura Ungar, Rogue Doctors Exploit Loopholes to Let a Powerful Drug ‘Devastate a Community’, COURIER J.

(June 8, 2017), https://www.courier-journal.com/story/news/investigations/2017/06/08/rogue-doctors-handsmedicine-designed-treat-addiction-turns-into-new-habit/98522426/. 
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In Kentucky, according to Attorney General Beshear, “the wrongful prescribing of 

Suboxone is flooding [Kentucky] communities with yet another drug that is killing our children, 

destroying our families and scarring our neighborhoods. While there are honest, legal Suboxone 

clinics that provide real and needed treatment in our state, the rogue clinics who value money 

over lives must be shut down.200

 200 Press Release, Kentucky.gov, supra note 186. 
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Case Study 8: Pain Doctor Threatens Murder to Protect Pill Mill

Key Facts

• From the outside, Dr. Shannon C. Ceasar ran a thriving medical practice in New Orleans. In 

reality, Dr. Ceasar was operating what authorities called a “pill mill.” In April 2017, he

pleaded guilty in federal court to health care fraud.201 

• In telephone calls recorded by law enforcement, Dr. Ceasar threatened in graphic terms to 

kill the agents investigating him, vowing that “they won’t even be able to have an open 

casket funeral. There will be nothing left above the Adam’s apple.”202

• Dr. Ceasar’s willingness to hand out prescriptions for oxycodone defrauded Medicaid, 

costing taxpayers $93,901.203

Background

No stranger to law enforcement, Dr. Ceasar had been investigated by the FBI in 2007 for 

alleged “wrongful prescribing habits stemming from his operation of a [previous] clinic.”204 Dr. 

Ceasar voluntarily surrendered his Drug Enforcement Administration (DEA) registration number 

that year.205 He later obtained a new DEA number, and opened the Gulf South Physicians Group 

in Metairie, Louisiana. Dr. Ceasar purported to run a family practice, and advertised himself “as 

a sub-specialist in chronic pain and substance abuse treatment and management.”206 

The Scheme

“Despite aspects of legitimate medical practice at [Gulf South Physicians Group],” court 

documents alleged that Dr. Ceasar “ran what he admitted . . . was, in essence a ‘pill mill,’ i.e., an 

operation in which he prescribed controlled substances to drug seekers and drug abusers without 

a legitimate medical purpose . . . .”207 Dr. Ceasar regularly prescribed high doses of opioids 

 201 See generally Plea Agreement at 1-2, United States v. Ceasar, No. 2:16-cr-00174-MLCF-DEK (E.D. La. Apr. 5, 

2016), ECF 44; see also Press Release, U.S. Att’y Off. E. Dist. of La., Metairie Doctor Pleads Guilty to Operating a 

Pill Mill, Threatening Federal Law Enforcement and Health Care Fraud (Apr. 5, 2017), 

https://www.justice.gov/usao-edla/pr/metairie-doctor-pleads-guilty-operating-pill-mill-threatening-federal-lawenforcement. 202 Press Release, U.S. Att’y Off. E. Dist. of La., Local Doctor Arrested for Illegally Dispensing Controlled 

Substances and Threatening to Kill Law Enforcement (July 25, 2016), https://www.justice.gov/usao-edla/pr/localdoctor-arrested-illegally-dispensing-controlled-substances-and-threatening-kill. 203 Plea Agreement at 2, United States v. Ceasar, supra note 201. 204 Factual Basis for Plea Agreement at 2, United States v. Ceasar, No. 2:16-cr-00174-MLCF-DEK (E.D. La. Apr. 5, 

2016), ECF 43. 

205 Id. 206 Id. 207 Id. at 4.
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including oxycodone,208 for $500 a prescription, often knowing that drug traffickers and addicts 

would sell or abuse the medications.209 To cover his tracks, Dr. Ceasar “doctored” the files of coconspirator patients,210 and wrote the prescriptions in other people’s names rather than the names 

of his co-conspirators.211

Furthermore, Dr. Ceasar routinely “breached the standard of care,” ensuring that almost 

anyone could obtain opioids.212 He generally issued prescriptions “with little or no investigation 

into a patient’s past use of prescription drugs and without consultation with a patient’s prior 

physician(s).” 213 He rarely reviewed drug screen tests.214 And he often prescribed drugs to 

patients at their first appointment, with little physical examination.215 Dr. Ceasar’s prescriptionwriting habits knew no bounds: he wrote and delivered prescriptions to patients in the clinic 

parking lot, and at all hours.216 He even “left signed prescriptions available at the clinic for 

distribution” when he was absent and even outside the country. 217 

Although Dr. Ceasar accepted only cash from “co-conspirator” patients,218 many of his 

customers had government health insurance that enabled them “to fill their prescription[s] with 

little or no out-of-pocket expenses”219 for the valuable pills Ceasar provided. Between 2012 and 

2016, Ceasar repeatedly issued medically unnecessary prescriptions for both oxycodone and 

Suboxone, knowing that Medicaid would foot the bill.220 

The medical and financial toll added up. Overall, Dr. Ceasar prescribed nearly 30,000 

oxycodone pills for no legitimate medical purpose.221 Insurers paid $150,788 for the scam—

Medicaid paid $93,901, while Medicare paid $32,027.222

With Dr. Ceasar’s fraud came great profit, and he made clear that he would take whatever 

steps necessary to protect his “practice.” When he suspected he was under investigation, he made 

repeated threats to kill law enforcement officers.223 For example, during one telephone call with 

 208 Id. at 5.

209 Id. at 5. 210 Id. at 8. 211 Id. at 5. 212 Id. at 6. 213 Id. at 6. 214 Id. at 6. 215 Id. at 6. 216 Id. at 8. 217 Id. at 8. 218 Id. at 7.

219 Id. at 17. 220 Id. at 17. 221 Id. at 9. 222 Id. at 20 (Ceasar also defrauded Blue Cross Blue Shield of Louisiana, with damages of $24,859.08). 223 Id. at 10.
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a confidential source in July 2016, Dr. Ceasar said: “God help them, I swear to god . . . I have a 

f*****g arsenal in there enough to supply a small militia, you know I collect guns, I swear to 

god if they come in there with a warrant I’m going to kill every single one of those sons of 

bitches.”224 Dr. Ceasar’s statement was apparently no empty threat: authorities later seized 33 

weapons, including rifles, revolvers, pistols and shotguns, from his residence.225

Later the same day, authorities recorded Dr. Ceasar telling another confidential source: 

“[I]f they happen to f**k with me again, they are all going to die. Every single one of them.” 

Officers arrested Dr. Ceasar the day after learning of his threats.226 

Aftermath

Dr. Ceasar pleaded guilty in U.S. District Court in New Orleans to committing and 

attempting to commit health care fraud, conspiracy to distribute and dispense oxycodone outside 

the scope of professional practice, and threatening to assault or murder federal law enforcement 

officers.227 His sentencing is scheduled for January 2018.228 In the words of former U.S. 

Attorney Kenneth A. Polite:

[R]ather than doing no harm as a physician, Shannon Ceasar illegally dispensed 

Oxycodone into a community struggling with an epidemic of opioid addiction. Then, 

when the governing medical board and law enforcement dared to challenge his 

criminality, Ceasar threatened to kill them. This level of disregard for human life, 

particularly from a physician, is absolutely despicable.229

 224 Id. at 10. 225 Id. at 10; see also Compl. & Aff. In Support of Probable Cause for Criminal Compl., App. A, United States v. 

Ceasar, No. 2:16-cr-00174-MLCF-DEK (E.D. La. Apr. 5, 2016), ECF 41. 226 Factual Basis for Plea Agreement at 12, United States v. Ceasar, supra note 204. 227 Plea Agreement at 1-2, United States v. Ceasar, supra note 201. 228 See Docket Report ,United States v. Ceasar, No. 2:16-cr-00174-MLCF-DEK-1 (E.D. La. Apr. 5, 2016), ECF 58. 

229 229 Press Release, U.S. Att’y Off. E. Dist. of La., supra note 202. 
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Case Study 9: Healers or Dealers? Ohio Doctor and Office Manager Wife Admit to 

Defrauding Medicaid

Key Facts

• Dr. David Kirkwood ran a “pill mill” that distributed thousands of illicit oxycodone pills, all 

paid for by Medicaid or Medicare. His wife worked as his office manager. Overall, the 

scheme defrauded taxpayers out of nearly $160,000.230

• Federal prosecutors said seven people died of drug overdoses resulting from the illicit 

prescriptions. The Kirkwoods ultimately pleaded guilty to health care fraud.231

• The government sought to seize approximately $2.5 million that Dr. Kirkwood and his wife 

gained through the conspiracy.232

Background

In one sense, Dr. Kirkwood was an established physician with a long record of serving 

patients. He received his medical degree in Kentucky in 1983 and his license from Ohio in 

1984.233 Between 1986 and 2014, Dr. Kirkwood ran Kirkwood Family Practice in Dayton, 

Ohio.234 Beverly Kirkwood served as office manager starting in 2009.235

The Kirkwoods’ practice proved to be both busy and lucrative. Dr. Kirkwood “saw up to 

100 patients per day, charging them $100 per office visit.”236 But various warning signs led 

federal and state law enforcement authorities to obtain a warrant and raid the Kirkwoods’ office 

in October 2012.237 A federal grand jury in U.S. District Court in Dayton indicted the couple in 

2014.

 230 Press Release, U.S. Att’y Off. S. Dist. of Ohio, Doctor, Wife Plead Guilty to Running Pill Mill (Aug. 30, 2017), 

https://www.justice.gov/usao-sdoh/pr/doctor-wife-plead-guilty-running-pill-mill. 231 Id.; see also Indictment at 13-14, United States v. Kirkwood, No. 3:14-cr-168 (S.D. Ohio 2014), ECF 4 (minute 

entries detailing the Kirkwoods’ guilty pleas).

232 U.S. Att’y Off. S. Dist. of Ohio Press Release, supra note 230. 233 Indictment at 2, United States v. Kirkwood, supra note 231. 234 Id. at 1. 235 Id. 236 Id. at 9-10 (alleging Dr. Kirkwood would “examine” between 60-100 patients per day); see also U.S. Att’y Off. 

S. Dist. of Ohio Press Release, supra note 230. 237 Mark Gokavi, Doctor, Wife Indicted for Allegedly Running ‘Pill Mill’, DAYTON DAILY NEWS (Dec. 17, 2014), 

http://www.daytondailynews.com/news/crime--law/doctor-wife-indicted-for-allegedly-running-pillmill/oFpM16mryx0ZhMXpMFmOVI/. 
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The Scheme

Beneath the Kirkwoods’ family business lurked a darker reality. The couple fueled the 

opioid epidemic—and bilked federal taxpayers—to line their own pockets. The “investigation 

found that this doctor took advantage of those suffering from addiction in the Dayton area for 

personal gain,” according to Ohio’s Attorney General.238 By doing so, the Kirkwoods not only 

harmed patients, but also ultimately defrauded Medicaid. The Kirkwoods allegedly conspired to:

[F]raudulently obtain money and funds from medical benefit plans, including 

Medicare, Medicaid and Medicaid managed care organizations (MCOs), through 

the billing of medical examinations and prescribing of controlled substances 

which were billed to Medicare, Medicaid and MCOs without determining if there 

existed any legitimate medical need or purpose . . . [for the prescription of 

controlled substances including opioids].239

Dr. Kirkwood “provided large amounts of prescription medications” to addicts or those 

diverting and selling opioids.240 The drugs included Opana, methadone, hydrocodone, and 

oxycodone.241 The Kirkwoods allegedly sought “[t]o make as much money as possible” by 

distributing the drugs “to patients, other drug users, and conspirators.”242 They often pocketed 

cash payments for office visits.243 Prosecutors said the Kirkwoods’ prescriptions fueled 

trafficking and addiction in numerous states, including not only Ohio, but also Florida, 

Kentucky, Oklahoma, South Carolina, Tennessee, Texas, and West Virginia.244

Moreover, the Kirkwoods allegedly knew what they were doing, having learned that a 

vast number of their patients were drug addicts.”245 According to prosecutors, the couple simply 

ignored “red flags” indicating that customers resold and abused the opioids.246 

Dr. Kirkwood also ignored how some patients’ physical traits—such as obesity and heart 

problems—made prescribing drugs dangerous for them.247 Yet he still prescribed “excessive 

 238 U.S. Att’y Off. S. Dist. of Ohio Press Release, supra note 230 (quoting current Ohio Attorney General Michael 

DeWine).

239 Indictment at 20-21, United States v. Kirkwood, supra note 231 (The Kirkwoods also, allegedly, repeatedly used 

billing codes to charge insurers “that reflected a service that was more costly than what David Kirkwood actually 

performed.” See Indictment at 21, 22). 240 Id. at 21. 241 Id. at 23. 242 Id. at 9. 243 Id. at 22. 244 Id. at 9. 245 Id. at 23. 246 Id. at 24. 247 Id. at 24-25. 
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amounts” of opioids for these at-risk patients.248 For example, Dr. Kirkwood prescribed 

methadone and oxycodone, as well as other drugs to one patient for no “legitimate medical 

purpose and outside the scope of medical practice,” leading to that patient’s death. 249

Aftermath

Dr. and Mrs. Kirkwood pleaded guilty to committing health care fraud, and Dr. Kirkwood 

also pleaded guilty to unlawful drug trafficking.250 The couple is awaiting sentencing and have 

agreed to pay to nearly $160,000 in restitution for the loss to Medicaid and Medicare. 251 

“When a doctor distributes Oxycodone without a legitimate medical purpose and outside 

the scope of medical practice, that’s not just bad practice. It’s unlawful drug trafficking,” U.S. 

Attorney Benjamin Glassman said after the Kirkwoods admitted their guilt.252 “In pleading 

guilty, David Kirkwood admitted that he was distributing opioids and other controlled substances 

as a drug dealer, not as a doctor.”253

 248 Id. 

249 Id. at 19; see also Mot. to Am. Indictment at 1, United States v. Kirkwood, No. 3:14-cr-168 (S.D. Ohio 2014), 

ECF 56 (consistent with the plea agreement, amending Count 8 to omit the sentence, “Death resulted . . . from the 

use of the multiple controlled substances so distributed.”).

250 U.S. Att’y Off. S. Dist. of Ohio Press Release, supra note 230 (Dr. Kirkwood also pled guilty to one count of 

unlawful drug trafficking); see also Plea on Indictment, United States v. Kirkwood, No. 3:14-cr-168 (S.D. Ohio 

2014), ECF 54; Plea on Indictment, United States v. Kirkwood, No. 3:14-cr-168 (S.D. Ohio 2014), ECF 55(detailing 

guilty pleas).

251 U.S. Att’y Off. S. Dist. of Ohio Press Release, supra note 230. 252 Id. 253 Id. 
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Case Study 10: A Foot Above Podiatry, Inc.

Key Facts

• A podiatrist prescribed opioids to “pill seeking” patients after performing painful and 

medically unnecessary procedures on their toes and feet undertaken “to create the 

appearance of legitimacy for his prescription of opioids.”254

• As part of his scheme, the defendant prescribed excessive amounts of oxycodone to those 

who appeared to be “addicts” or even “drug dealers.”255

• The podiatrist submitted fraudulent claims for the procedures to Medicaid, along with 

Medicare and four private insurance companies.256

• In total, the podiatrist pocketed approximately $5 million from the scheme.

257

Background

Stephen Monaco was a licensed podiatrist who had practiced in Pennsylvania since 

1983.258 He was the president and operator of A Foot Above Podiatry, Inc. in Havertown.259 

Monaco advertised himself as a committed physician, willing to address a variety of 

health concerns. “I believe in finding solutions to all foot and ankle related problems, from 

complex musculoskeletal issues to skin and soft tissue concerns. We take a holistic approach 

and always recommend conservative care first,”260 he was quoted as saying. 

The Scheme

For nearly seven years, Mr. Monaco capitalized on his “patients” opioid addictions and 

 254 Press Release, U.S. Att’y Off. E. Dist. of Pa., Delaware County Podiatrist Sentenced to 8 Years in Prison for 

Health Care Fraud (Feb. 7, 2017), https://www.justice.gov/usao-edpa/pr/delaware-county-podiatrist-sentenced-8-

years-prison-health-care-fraud. 255 See Gov’t Sent’g Mem. at 3, United States v. Monaco, No. 2:16-cr-00255-JS (E.D. Pa. 2015), ECF 23 (on file 

with S. Comm. on Homeland Sec. & Governmental Aff.).

256 Press Release, U.S. Att’y Off. E. Dist. of Pa., Delaware County Podiatrist Pleads Guilty to $5 Million Health 

Care Fraud (Aug. 23, 2016), https://www.justice.gov/usao-edpa/pr/delaware-county-podiatrist-pleads-guilty-5-

million-health-care-fraud. 257 Notice of Forfeiture at 3, United States v. Monaco, No. 2:16-cr-00255-JS (E.D. Pa. 2015), 

https://www.justice.gov/usao-edpa/file/869476/download. 258 Gov’t Sent’g Mem. at 2, United States v. Monaco, supra note 255. 259 Notice of Forfeiture at 1, United States v. Monaco, supra note 257. 260Rose Quinn, Havertown Foot Doc Charged in $5M Medicare Scam, DELAWARE CTY. DAILY TIMES (June 22, 

2016), http://www.delcotimes.com/article/DC/20160622/NEWS/160629869; see also Stephen Monaco, Dr. Stephen 

Monaco, DPM, HEALTHGRADES, https://www.healthgrades.com/providers/stephen-monaco-2q2nf (last visited Jan. 

5, 2018). 
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exploited vulnerabilities in the Medicaid and Medicare programs.261 From January 2008 through 

October 2014, he performed unnecessary procedures on patients seeking opioids, who appeared 

to be addicts or possible drug dealers.262 According to court documents, these procedures 

included “injections; nail avulsions (the separation and removal of an entire nail plate or portion 

of a nail plate; a procedure generally requiring injected local anesthesia); and nail excisions (the 

separation and removal of an entire nail plate or portion of a plate, followed by removal of the 

associated nail matrix; performed under local anesthesia).”263

After inflicting such pain, Monaco would reward his patients with oxycodone, creating 

the appearance that these prescriptions were legitimate.264 He would then submit the claims to 

the patients’ insurance providers, including Medicaid. During this time period, Monaco also 

submitted claims for services he did not perform.265 

In one particularly egregious instance, when a visibly pregnant woman came to Monaco’s 

practice, he declined to turn her away. Instead, according to court documents, Monaco 

prescribed the woman oxycodone throughout her pregnancy, endangering her unborn child, and 

“administered painful injections in the pregnant woman’s heels, for which he billed Medicaid, to 

justify the prescriptions.”266 Five days before the patient gave birth, Mr. Monaco wrote her yet 

another prescription for 90 pills of oxycodone.267 The baby was born addicted to opioids and 

“required extensive, and invasive, neonatal care to save his life and minimize the potential for 

cognitive and developmental deficits.”268

In some cases, staff members tried to stop Monaco from prescribing oxycodone to 

patients and even “took [his] pens away so that he could not write prescriptions.”269 It did not 

work: Monaco used the money from his fraudulent scheme to fund a “lavish lifestyle,” which 

included a Bentley and a 19,000-square-foot home complete with an elevator, an eight-car 

garage, a theater, and spa.270 

 261 U.S. Att’y Off. E. Dist. of Pa. Press Release, supra note 256. 262 U.S. Att’y Off. E. Dist. of Pa. Press Release, supra note 254; see also Gov’t Sent’g Mem. at 3, United States v. 

Monaco, supra note 255. 263 Notice of Forfeiture at 7, United States v. Monaco, supra note 257. 264 See U.S. Att’y Off. E. Dist. of Pa. Press Release, supra note 254. 265 Notice of Forfeiture at 7,10, United States v. Monaco, supra note 257. 266 Gov’t Sent’g Mem. at 7, 9-10, United States v. Monaco, supra note 255. 267 Id. at 7-8 n.6. 268 Id. at 7-8. 

269 Id. at 10. 270 Id. at 10. 
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Aftermath

It wound up taking an FBI operation to unmask Monaco’s fraud. In 2012, an undercover 

FBI agent posing as a Medicare beneficiary seeking treatment visited A Foot Above on five 

occasions,271 recording her interactions with Monaco using a concealed video camera.272 The 

agent began each visit by complaining of a “non-specified discomfort in her toes after 

exercising.”273 Monaco treated the undercover agent by “merely [clipping] her toenails and 

[wiping] her toes with alcohol.”274 According to court documents, Monaco then “submitted false 

claims on behalf of the [agent] to Medicare for services he had not performed. To justify 

payments for the services billed for the [agent], Monaco included a false diagnosis of peripheral 

arterial disease,”275 a narrowing of the arteries that reduces blood flow.

On June 22, 2016, prosecutors charged Monaco with “knowingly and willfully” 

defrauding Medicaid, Medicare, and a number of insurance companies.276 The case was part of a 

larger health care fraud takedown of 301 individuals who were charged with participating in 

schemes resulting in approximately $900 million in fraudulent claims.277 In August 2016, 

Monaco pleaded guilty to health care fraud and surrendered his Drug Enforcement 

Administration license. On February 7, 2017, he was sentenced to 8 years in prison and ordered 

to pay $4,960,295 in restitution.278

Monaco’s case provides one of the more bizarre examples of the lengths to which pillseekers will go to obtain prescriptions. It likewise illustrates the criminal creativity of some

doctors, whose unscrupulous prescribing can facilitate the abuse and diversion of opioids. 

 271 Gov’t Plea Mem. at 6, United States v. Monaco, No. 2:16-cr-00255-JS (E.D. Pa. 2015), ECF 8 (on file with S. 

Comm. on Homeland Sec. & Governmental Aff.).

272 Id. at 6. 273 Id. 274 Id. 275 Id. 276 Notice of Forfeiture at 10, United States v. Monaco, supra note 257. 277 Press Release, U.S. Dep’t of Just., National Health Care Fraud Takedown Results in Charges against 301 

Individuals for Approximately $900 Million in False Billing (June 22, 2016), 

https://www.justice.gov/opa/pr/national-health-care-fraud-takedown-results-charges-against-301-individualsapproximately-900. 278 U.S. Att’y Off. E. Dist. of Pa. Press Release, supra note 254. 
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CASE SUMMARIES

Case Summary 1: “Super Dave” Drug Ring 

• Defendant(s): David Thompson, Julian Cintron, and Alejandrino DeJesus

• Case Year:

279 2017

• State: Connecticut

• Case Status: All three pleaded guilty in U.S. District Court in Connecticut. The court 

sentenced Thompson, known as “Super Dave,’’ to 14 years in prison; Cintron to 9 years in 

prison, and DeJesus to 11 years in prison. 

• Description of Scheme: The three men ran an organization that stole the identities of 

medical providers. They used the stolen identities to write fraudulent opioid prescriptions for 

individuals called “runners,” who filled the prescriptions. Nearly all of the prescriptions 

were billed to Medicaid. 

• Key Facts: 

o Between February 2013 and September 2015, the drug ring stole the personal 

identifying information of more than 50 doctors and other medical professionals and 

fraudulently obtained more than 80,000 oxycodone pills.

o After the runners filled the prescriptions, the organization then re-sold the Medicaidfunded 30 mg oxycodone pills for $20 to $30 each.

o In total, the drug ring wrote more than 800 fraudulent prescriptions using more than 

270 different “patient” names.

Sources: 

1. Press Release, U.S. Att’y Off., D. Conn., Ring Leader of Fraudulent Oxycodone 

Prescription Scheme Sentenced to 14 Years in Federal Prison (July 11, 2017), 

https://www.justice.gov/usao-ct/pr/ring-leader-fraudulent-oxycodone-prescriptionscheme-sentenced-14-years-federal-prison.

 279 Case year, unless otherwise noted, refers to year of conviction or the year charges were filed if the case is still 

pending.
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Case Summary 2: New York City Opioid Quid Pro Quo

• Defendant(s): 13 individuals, including two doctors and former New York State 

Assemblyman Alec Brook-Krasny; 3 medical clinics; and 2 corporate entities. 

• Case Year: 2017

• State: New York

• Case Status: Prosecutors filed charges against 13 individuals and 5 entities in Manhattan 

state Supreme Court in April 2017. The case is pending.

• Description of Scheme: The medical providers are accused of writing medically 

unnecessary prescriptions for people seeking opioids. As payment, the doctors allegedly 

performed medical procedures and tests that were medically unnecessary or below standards 

for reimbursement. Federal officials say the scheme defrauded Medicaid and also Medicare 

out of millions of dollars. 

• Key Facts: 

o Individuals seeking opioid prescriptions came to three medical clinics in New York 

City. Medical providers prescribed the opioid medication, provided that the 

individuals agreed to certain medical treatment or diagnostic tests, which could be 

billed to their health insurance—Medicaid or Medicare. 

o In addition to running expensive medically unnecessary tests, practitioners billed 

Medicaid for medical treatment that was far below standards for reimbursement. This 

included, for example, billing a few minutes in a massage chair as a full physical 

therapy session. 

o From 2012 to 2017, these clinics and medical practitioners allegedly prescribed six 

million oxycodone pills and ordered government-reimbursed procedures generating 

more than $24 million in revenue. 

o The laboratory run by Alec Brook-Krasny allegedly altered urinalysis test results for 

patients, enabling them to test positive for alcohol yet continue to receive opioid 

prescriptions. 

Sources:

1. Press Release, DEA, Operation Avalanche: Millions of Narcotic Painkillers Pumped 

Onto Black Market, Millions Fraudulently Billed to Medicaid, Medicare (Apr. 7, 2017), 

https://www.dea.gov/divisions/nyc/2017/nyc040717.shtml.

2. Press Release, DEA, New Charges for Former NY State Assemblyman Brook-Krasny 

(June 14, 2017), https://www.dea.gov/divisions/nyc/2017/nyc061417.shtml.
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Case Summary 3: Maryland Pill Mill

• Defendant(s): Dr. Kofi Shaw-Taylor and nine other individuals. 

• Case Year: 2017

• State: Maryland

• Case Status: In August 2017, local prosecutors charged Dr. Shaw-Taylor in Anne Arundel 

County Circuit Court with 289 counts including conspiracy to commit drug distribution and 

Medicaid fraud.

• Description of Scheme: Dr. Shaw-Taylor, a urologist, and his co-conspirators allegedly 

operated two clinics that doubled as pill mills, prescribing opioids and other controlled 

substances and billing Medicaid for drugs with no apparent medical purpose. The 

prescriptions led to the deaths of two patients.

• Key Facts: 

o Dr. Shaw-Taylor allegedly charged patients up to $500 in cash per visit for 

prescriptions. 

o Approximately 1,083 Medicaid patients received prescriptions from Dr. Shaw-Taylor, 

737 of whom had no corresponding medical visits. 

o From June 2015 through April 2017, for example, Dr. Shaw-Taylor is accused of 

prescribing 283,666 doses of oxycodone for 403 Medicaid beneficiaries. Of these 

Medicaid beneficiaries, 336 received prescriptions for opiates and benzodiazepines, a 

dangerous combination of drugs that the FDA has warned should not be taken 

together. 

o At least two of Dr. Shaw-Taylor’s patients died from overdoses of the Medicaidfunded medications. 

Sources: 

1. Press Release, Brian E. Frosh, Md. Att’y Gen., Attorney General Frosh Announces 

Indictments Stemming From Multi-Agency, Multi-Jurisdictional Crackdown on Pill Mill 

Operators (Aug. 10, 2017), 

http://www.marylandattorneygeneral.gov/press/2017/081017.pdf.
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Case Summary 4: Doctor Writes More Opioid Prescriptions than Entire Medical Staff

• Defendant(s): Dr. Pawankumar Jain 

• Case Year: 2016

• State: New Mexico

• Case Status: In February 2016, Dr. Jain pleaded guilty in U.S. District Court in New Mexico 

to unlawfully dispensing controlled substances and health care fraud. His sentencing is 

pending. 

• Description of Scheme: Dr. Jain, a neurologist who operated a pain management practice in 

Las Cruces, prescribed painkillers to patients—including Medicaid and Medicare 

beneficiaries—with no legitimate medical purpose. 

• Key Facts: 

o Prosecutors allege that Dr. Jain specifically targeted Medicaid and Medicare by 

submitting claims for prescription medications he dispensed outside the usual course 

of medical practice. 

o At least four people died of overdoses from the drugs—primarily oxycodone and 

methadone—Dr. Jain prescribed to them. 

o In 2011, Dr. Jain was the top prescriber of pain medicines in New Mexico, writing 

prescriptions for more than three million doses of medication to over 3,200 patients. 

The second-ranked prescriber was the entire staff of residents at the University of 

New Mexico Hospital, which prescribed 500,000 fewer doses for seven times as 

many patients. 

Sources: 

1. Press Release, U.S. Att’y Off., D.N.M., Pawankumar Jain Pleads Guilty to Unlawfully 

Dispensing Prescription Painkillers and Health Care Fraud (Feb. 11, 2016), 

https://www.justice.gov/usao-nm/pr/pawankumar-jain-pleads-guilty-unlawfullydispensing-prescription-painkillers-and-health.

2. Press Release, U.S. Att’y Off., D.N.M., Pawan Jumar Jain Arraigned on Superseding 

indictment Adding New Charges of Unlawfully Dispensing Prescription Drugs and 

Health Care Fraud Resulting in Deaths, https://www.justice.gov/usao-nm/pr/pawankumar-jain-arraigned-superseding-indictment-adding-new-charges-unlawfully.

3. Leslie Linthicum, State Medical Board Yanks Pain Doc’s License, Albuquerque Journal, 

Jan. 3, 2013, https://www.abqjournal.com/157301/state-medical-board-yanks-pain-docslicense.html.
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Case Summary 5: “It was like sex for pills.”

• Defendant(s): Dr. Jose Jorge Abbud Gordinho

• Case Year: 2016

• State: West Virginia

• Case Status: In April 2016, Dr. Gordinho was sentenced to 8 years in prison after pleading 

guilty in U.S. District Court in West Virginia to illegally prescribing opioids and defrauding 

Medicaid and Medicare. 

• Description of Scheme: Dr. Gordinho prescribed hydrocodone, an opioid pain reliever, for 

illegitimate purposes and billed Medicaid and Medicare for medically unnecessary services. 

• Key Facts: 

o In exchange for illegitimate prescriptions, Dr. Gordinho requested sexual favors from 

female patients. “It was like sex for pills,” the sentencing judge quoted a clinic staff 

member as saying.

o Dr. Gordinho continued to prescribe pain medications for patients who failed drug 

tests, contrary to standard medical practice. 

o The court ordered Dr. Gordinho to pay more than $48,000 in restitution for 

defrauding Medicaid and Medicare. 

Sources:

1. Press Release, U.S. Att’y Off., S.D. W. Va.., Beckley Doctor Sentenced to Eight Years in 

Prison for Federal Drug Crime and Health Care Fraud (Apr. 27, 2016), 

https://www.justice.gov/usao-sdwv/pr/beckley-doctor-sentenced-eight-years-prisonfederal-drug-crime-and-health-care-fraud.

2. Wendy Holdren, Dr. Jose Gordinho Sentenced to Eight Years in Prison, The Register 

Herald, Apr. 27, 2016, http://www.register-herald.com/news/dr-jose-gordinho-sentencedto-eight-years-in-prison/article_43354491-0a46-5d00-9102-afe7f99b5166.html.

3. Press Release, U.S. Att’y Off., S.D. W. Va., Pain Doctor Indicted on Federal Drug 

Charges (Nov. 24, 2015), https://www.fbi.gov/contact-us/fieldoffices/pittsburgh/news/press-releases/pain-doctor-indicted-on-federal-drug-charges.
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Case Summary 6: A Major Oxycodone Trafficker Who “Dealt Illegal Prescription Pills at 

the Taxpayers’ Expense.”

• Defendant(s): Michael A. Mancusi

• Case Year: 2012

• State: New York

• Case Status: In October 2012, Mancusi pleaded guilty in Richmond County Criminal Court 

to multiple felonies, including criminal possession and grand larceny. The court sentenced 

him to seven years in prison. 

• Description of Scheme: Following two car accidents, Mancusi fraudulently claimed serious 

injuries to obtain no-fault insurance benefits through Medicaid, along with Social Security 

Disability Insurance and Medicare. He allegedly then used the benefits to obtain 

prescriptions for pain medications, which he re-sold for a handsome profit. 

• Key Facts: 

o From 2011 to 2012, Mancusi fraudulently received prescriptions for more than 6,000 

oxycodone pills, as well as prescriptions for alprazolam (Xanax).

o After filling the prescriptions, Mancusi and an accomplice sold them to buyers, 

generating more than $75,000 in a single year from the sales. 

o Prosecutors called Mancusi “a major oxycodone trafficker” and said his conviction 

ended “a scheme that dealt illegal prescription pills at the taxpayers’ expense.”

Sources:

1. Press Release, Eric T. Schneiderman, N.Y. Att’y Gen., A.G. Schneiderman Announces 

Jail Sentence for Major Oxycodone Trafficker on Staten Island (Dec. 12, 2012), 

https://ag.ny.gov/press-release/ag-schneiderman-announces-jail-sentence-majoroxycodone-trafficker-staten-island.
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Case Summary 7: Medicaid “Runners” and Stolen Prescription Pads

• Defendant(s): Jimmie Lee Simmons, Shantel Williams, and James Marsh, along with four 

other co-defendants. 

• Case Year: 2014

• State: New York

• Case Status: Simmons, Williams and Marsh were convicted in U.S. District Court in 

Rochester on charges related to obtaining and distributing pain medicine. The court 

sentenced Simmons to 6 months in prison; Williams to 12 months in prison, and Marsh to 

five years in prison. The other four defendants were convicted as well.

• Description of Scheme: Williams took prescription pads from the doctor’s office where she 

worked and wrote fraudulent prescriptions for OxyContin. The trio targeted Medicaid 

beneficiaries, known as “runners,” to fill the illicit prescriptions. 

• Key Facts: 

o Simmons recruited people willing to use their Medicaid benefits to fill the fraudulent 

prescriptions. In return, the co-conspirators paid these individuals $100 for each 

prescription charged to their Medicaid card. 

o Williams sold the fraudulent prescriptions to her co-conspirators for $860 each. 

o In total, the Justice Department estimated that the group filled 47 prescriptions, with a 

street value of $180,000. The trio was ordered to pay more than $45,000 in restitution 

to Medicaid.

Sources: 

1. Press Release, U.S. Att’y Off., W.D.N.Y., Seven People Arrested; Charged with 

Operating a Prescription Drug Ring (Dec. 13, 2012), 

https://www.justice.gov/archive/usao/nyw/2012/DrugRing.pdf.

2. Press Release, U.S. Att’y Off., W.D.N.Y., Rochester Man and Woman Sentenced in 

OxyContin Distribution Conspiracy (Sept. 25, 2014), https://www.justice.gov/usaowdny/pr/rochester-man-and-woman-sentenced-oxycontin-distribution-conspiracy.

3. Press Release, U.S. Att’y Off., W.D.N.Y., Rochester Man Sentenced for His Role in 

OxyContin Conspiracy (Oct. 29, 2014), https://www.justice.gov/usao-wdny/pr/rochesterman-sentenced-his-role-oxycontin-conspiracy.
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Case Summary 8: A Pharmacy Calls, a Drug Dealer Answers

• Defendant(s): Nelson Quezada Sr. and his son, Riquelvin Quezada 

• Case Year: 2016

• State: New York

• Case Status: Both individuals face drug charges and are awaiting trial. The senior Quezada 

has been charged with Operating as a Major Trafficker, the only New York state drug charge 

that carries a maximum sentence of life in prison. 

• Description of Scheme: Father and son allegedly used stolen prescription pads to write 

fraudulent prescriptions for $1.5 million worth of oxycodone. They recruited “runners” to 

fill the prescriptions with Medicaid cards. The pills were then resold on the black market at 

huge profit. 

• Key Facts: 

o The Quezadas targeted Medicaid beneficiaries who lived in their Bronx neighborhood 

to fill the prescriptions at pharmacies in the Bronx and elsewhere. They paid runners 

up to a few hundred dollars per prescription.

o The investigation identified 464 fraudulent oxycodone prescriptions, totaling more 

than 51,000 pills, with a street value of more than $1.5 million. 

o The Quezadas forged prescriptions with blank paper containing the names of doctors 

not involved in the scheme. Most of the prescriptions contained a phone number, and 

if any pharmacies called to verify information, investigators believe a member of the 

drug ring answered the phone. 

Sources:

1. Press Release, Off. of the Special Narcotics Prosecutor for N.Y.C., Father and Son 

Charged with Running Prescription Drug Trafficking and Forgery Ring (Mar. 9, 2016), 

http://www.nyc.gov/html/snp/downloads/pdf/pr_030916.pdf.
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Committee on Homeland Security and Governmental Affairs

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Case Summary 9: Four Million Hydrocodone and Millions in Medicaid Fraud

• Defendant(s): Babubhai ‘Bob” Patel; his brother, Vinod Patel; and 36 other defendants. 

• Case Year: 2014

• State: Michigan

• Case Status: Bob Patel was convicted in U.S. District Court in Michigan after a seven-week 

trial in 2012 and sentenced to 17 years in prison. Vinod Patel was convicted in 2014 of 

conspiracy to commit health care fraud and conspiracy to pay health care kickbacks. In July 

2017, his sentence was vacated by an appeals court and sent back to the district court for 

resentencing. 

• Description of Scheme: Authorities say Bob Patel masterminded a massive health care 

fraud and drug distribution ring that paid kickbacks to physicians in exchange for patient 

referrals for home health care, which were billed to Medicaid and Medicare. 

• Key Facts: 

o Vinod Patel hired marketers to find and recruit patients to visit physicians who 

worked with the home health services company he owned with his brother. In 

exchange for meeting with the physicians, Vinod Patel offered the patients 

prescription drugs, including opioid painkillers and Xanax. 

o Vinod Patel was arrested in connection with a larger investigation into his brother, 

Bob, who defrauded Medicaid and Medicare through his network of 26 pharmacies. 

o Bob Patel provided kickbacks and other illegal benefits to doctors in exchange for 

writing illegitimate prescriptions, to be filled at his pharmacies through Medicaid, 

Medicare, and private insurance. 

o In total, the scheme bilked Medicaid and Medicare out of more than $60 million 

between 2006 and 2011 and dispensed more than 250,000 illicit dosages of 

oxycodone, along with four million dosages of hydrocodone. 

Sources:

1. United States v. Patel, 694 Fed. Appx. 991 (6th Cir. 2017). 

2. Press Release, U.S. Att’y Off., E.D. Mich., Thirteen Individuals Indicted in Health Care 

Fraud and Drug Distribution Scheme (Mar. 19, 2013), https://www.justice.gov/usaoedmi/pr/thirteen-individuals-indicted-health-care-fraud-and-drug-distribution-scheme.

3. Press Release, U.S. Att’y Off., E.D. Mich., Jury Convicts 38th Defendant in Health Care 

Fraud Scheme (July 21, 2014), https://www.fbi.gov/contact-us/fieldoffices/detroit/news/press-releases/jury-convicts-38th-defendant-in-health-care-fraudscheme.
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

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Case Summary 10: A Nurse Grabs Norco, and Medicaid Pays

• Defendant(s): Stefanie Cook 

• Case Year: 2017

• State: Mississippi

• Case Status: In January 2017, Cook was charged with Medicaid fraud and obtaining 

possession of a controlled substance by fraud, misrepresentation or subterfuge. Her trial is 

pending. 

• Description of Scheme: Cook, a nurse who worked at a nursing center, allegedly stole 

prescription painkillers intended for a Medicaid patient at the nursing facility. 

• Key Facts: 

o Cook worked as a registered nurse at the Covington County Nursing Center in 

Collins, Mississippi. She allegedly obtained Norco, a combination of acetaminophen 

and hydrocodone, from a patient. 

o The case illustrates that the nexus between Medicaid and opioids can extend from 

large-scale drug rings to individual medical professionals abusing their positions to 

obtain opioids.

Sources:

1. Press Release, Jim Hood, Miss. Att’y Gen., Collins Registered Nurse Arrested on 

Medicaid Fraud Charges (Jan. 27, 2017), http://www.ago.state.ms.us/releases/collinsregistered-nurse-arrested-on-medicaid-fraud-charges/.
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

59

Case Summary 11: Former Medical Resident Uses Family to Defraud Medicaid

• Defendant(s): Kyle Betts

• Case Year: 2017

• State: Missouri

• Case Status: Betts pleaded guilty in U.S. District Court in St. Louis to obtaining prescription 

drugs that contained controlled substances through misrepresentation, fraud, forgery, 

deception, and subterfuge. The judge sentenced him to three years of probation.

• Description of Scheme: Mr. Betts, a former medical resident, wrote more than 70 

fraudulent prescriptions for opioid pain relievers such as Percocet and Norco, with some of 

the illicit drugs paid for by the Illinois Medicaid program and Medicare. 

• Key Facts: 

o Betts, who worked at St. Louis University Hospital, wrote prescriptions using the 

names of six people, including family members and former romantic partners, though 

he did not have a physician-patient relationship with any of them.

o Betts personally went to pharmacies and presented some of the fraudulent 

prescriptions.

o The scheme extended from November 2014 through February 2016.

Sources:

1. Press Release, U.S. Att’y Off., E.D. Mo., Medical Resident Pleads Guilty to Fraudulently 

Obtaining Prescription Opioid Pain Medications (May 19, 2017), 

https://www.justice.gov/usao-edmo/pr/medical-resident-pleads-guilty-fraudulentlyobtaining-prescription-opioid-pain.

2. Former Medical Resident Admits Writing Fake Prescriptions, Assoc. Press St. & Loc. 

(St. Louis), May 20, 2017.
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Committee on Homeland Security and Governmental Affairs

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Case Summary 12: Kickbacks At A Medical Clinic

• Defendant(s): Natalia Dochim 

• Case Year: 2016

• State: New York

• Case Status: Prosecutors charged Dochim with health care fraud, grand larceny, and money 

laundering. 

• Description of Scheme: Dochim, aided by co-conspirators, is accused of luring Medicaid 

patients to her medical clinic by paying kickbacks and offering Suboxone prescriptions, 

defrauding Medicaid out of more than $170,000. 

• Key Facts: 

o Prosecutors alleged that Dochim, who operated the clinic, targeted Medicaid patients 

by presenting it as a legitimate substance abuse program.

o In reality, prosecutors say, the clinic often failed to take obtain medical histories for 

patients, prescribed Suboxone at the maximum dosage, and sent patients to a 

purported detoxification program that consisted of vitamin injections, which is not an 

approved treatment for opioid addiction.

o Dochim, through the clinic, allegedly billed Medicaid for services never provided, 

including spirometry, a pulmonary function test, and allergy testing. She is accused of 

laundering the illicit Medicaid funds she received through various shell companies.

Sources:

1. Press Release, Eric T. Schneiderman, N.Y. Att’y Gen., A.G. Schneiderman Announces 

Arrest of Clinic Operator for Allegedly Defrauding Medicaid by Offering Sham 

Substance Abuse Treatment (Nov. 3, 2016), https://ag.ny.gov/press-release/agschneiderman-announces-arrest-clinic-operator-allegedly-defrauding-medicaid.
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Case Summary 13: Taking Patient Information at a Drug Treatment Center 

• Defendant(s): Shanta R. Barnes

• Case Year: 2015

• State: Louisiana

• Case Status: Barnes pleaded guilty in U.S. District Court in Baton Rouge to health care 

fraud and aggravated identify theft. A judge sentenced her to five years in prison, ordered 

her to pay $17,582 in restitution and fined her $25,000.

• Description of Scheme: As program director of an in-patient drug treatment center, Barnes 

used patient information, including Medicaid identification numbers, to obtain powerful 

opioids for her own use while defrauding Medicaid. 

• Key Facts: 

o Barnes worked for Louisiana Health and Rehabilitation Options in Baton Rouge, 

where she gained access to patients’ dates of birth and Medicaid identification 

numbers.

o She used the information to obtain fraudulent prescriptions in the names of Medicaid 

recipients and caused the submission of false claims to Medicaid.

o In less than a single year, Barnes obtained nearly 6,000 80-mg oxycodone pills 

through the scheme.

Sources:

1. Press Release, U.S. Att’y Off., M.D. La., Former Director of Detox Center Convicted of 

Health Care Fraud and Aggravated Identity Theft (Sept. 3, 2015), 

https://www.justice.gov/usao-mdla/pr/former-director-detox-center-convicted-healthcare-fraud-and-aggravated-identity-theft.

2. Emily Lane, Ex-director of Baton Rouge Drug Rehab Admits to Using Patient Info to Get 

Prescription Pills, The Times-Picayune, Sept. 3, 2015, 

http://www.nola.com/crime/batonrouge/index.ssf/2015/09/rehab_director_baton_rouge_med.html.
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Case Summary 14: Abusing an Opioid Treatment Drug to Defraud Medicaid 

• Defendant(s): Dr. Richard Ng

• Case Year: 2014

• State: Massachusetts 

• Case Status: Dr. Ng pleaded guilty in Suffolk Superior Court to submitting false Medicaid 

claims; excessive Medicaid charges, and illegal prescribing. The judge sentenced him to twoand-a-half years in prison, fined him $10,000, and ordered him to pay approximately $9,700 

in restitution.

• Description of Scheme: Dr. Ng, the former head of a substance abuse clinic, defrauded 

Medicaid and fraudulently prescribed suboxone to patients by writing falsified treatment 

notes to justify the prescriptions. 

• Key Facts: 

o Dr. Ng wrote prescriptions using false names for a number of patients, prescriptions 

that were funded by the Massachusetts Medicaid program.

o Dr. Ng also charged patients, including Medicaid beneficiaries, a $100 “new patient 

registration fee,” which was paid to him directly with cash or check. The fee was in 

addition to payments Dr. Ng received from Medicaid for his services, which violated 

state regulations.

o For nine patients, Dr. Ng improperly wrote suboxone prescriptions, even though the 

patients were not taking suboxone and drug tests indicated they were still taking other 

opiates. To justify the prescriptions, he wrote false medical notes saying the patients 

had therapeutic levels of suboxone in their system and had been tolerating their 

suboxone treatment without difficulty.

Sources:

1. Press Release, Maura Healey, Mass. Att’y Gen., Milton Physician Pleads Guilty to 

Illegally Prescribing Drug Used to Treat Opiate Addiction (Mar. 14, 2014), 

http://www.mass.gov/ago/news-and-updates/press-releases/2014/2014-03-14-ngplea.html.
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Case Summary 15: Pennsylvania Suboxone Clinic 

• Defendant(s): Mark R. Foster and Terri C. Brown 

• Case Year: 2017

• State: Pennsylvania

• Case Status: A federal grand jury indicted Foster and Brown in October 2017 in U.S. 

District Court in Pittsburgh on charges of health care fraud and unlawfully distributing 

controlled substances. They have pleaded not guilty.

• Description of Scheme: Prosecutors say Foster and Brown conspired at their suboxone 

clinic to create illicit prescriptions for opioids, some of which were fraudulently billed to 

Medicaid.

• Key Facts:

o Brown owned and operated Cherry Way, a suboxone clinic in Bridgeville, with Foster 

serving as the clinic’s medical director.

o According to the indictment, the pair created unlawful prescriptions for suboxone, 

Percocet and Adderall, which were dispensed to Brown and others.

o Brown then allegedly submitted fraudulent claims to Medicaid and a private insurer 

to cover the costs of the illicit prescriptions.

Sources:

1. Press Release, U.S. Att’y Off., W.D. Penn., Bridgeville Suboxone Clinic Operators 

Charged with Unlawful Distribution of Controlled Substances and Health Care Fraud 

(Oct. 20, 2017), https://www.justice.gov/usao-wdpa/pr/bridgeville-suboxone-clinicoperators-charged-unlawful-distribution-controlled.
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Case Summary 16: “I’m Sorry I Failed to Behave Like a Physician” 

• Defendant(s): Dr. Chethan V. Byadgi and Dr. Rajaa Nebbari

• Case Year: 2017

• State: Pennsylvania 

• Case Status: Dr. Byadgi and Dr. Nebbari pleaded guilty in Lackawanna County Court of 

Common Pleas to conspiracy to commit unentitled reimbursement, theft by deception, and 

insurance fraud. They were each sentenced to 9 to 23 months in jail, followed by 12 years of 

probation, and ordered to pay nearly $200,000 in restitution. The judge also banned the pair 

from participating in the Medicaid and Medicare programs as providers for five years.

• Description of Scheme: Dr. Byadgi and Dr. Nebbari had untrained staff members write 

suboxone prescriptions for drug addicts while the doctors submitting false insurance claims 

showing the physicians had performed the services. Court documents said the pair 

fraudulently collected more than $169,000 in reimbursements from Medicaid, Medicare, and 

private insurers. 

• Key Facts:

o The investigation began when a former medical assistant who worked with the 

doctors at walk-in clinics in Scranton contacted authorities. The medical assistant 

said she treated and wrote prescriptions for suboxone patients never seen by doctors, 

who were often absent from the clinics. The medical assistant was not a licensed 

practitioner in Pennsylvania.

o Clinic patients told investigators that they rarely met with the doctors and were 

treated by medical assistants.

o The presiding judge told Dr. Byadgi and Dr. Nebbari at sentencing: “You had the 

ability to intervene in their lives and to make their life better. Neither one of you took 

that responsibility.”

o Dr. Nebbari, apologized to the judge: “I’m sorry I failed to behave like a physician.”

Sources:

1. Joseph Kohut, Attorney General Charges Two Clinic Doctors with Insurance Fraud, The 

Times Tribune (Scranton, Penn.), Oct. 21, 2015, http://thetimes-tribune.com/news/stateattorney-general-charges-two-clinic-doctors-with-insurance-fraud-1.1960523.

2. Peter Cameron, Doctors to Jail for Fraudulently Prescribing Addiction Treating Drugs, 

The Times-Tribune (Scranton, Penn.), Mar. 30, 2017.
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Case Summary 17: “Defrauding The Medicaid System to Illegally Obtain Narcotics Is 

Dangerous and Feeds Cycle of Abuse” 

• Defendant(s): William Martinez

• Case Year: 2015

• State: New York

• Case Status: Martinez pleaded guilty in Monroe County Court to criminal possession of a 

controlled substance. The judge sentenced him to 1 1⁄2 years in prison and ordered him to pay 

restitution to the Medicaid program.

• Description of Scheme: Mr. Martinez posed as a doctor to unlawfully obtain opioids using 

his Medicaid card.

• Key Facts: 

o In 2015, Martinez contacted a CVS pharmacy in Rochester falsely claiming to be an 

emergency room doctor.

o Martinez called in a Percocet prescription for himself and then picked up the illegally 

obtained drugs, paying with his Medicaid benefits card.

Sources:

1. Press Release, Eric T. Schneiderman, N.Y. Att’y Gen., A.G. Schneiderman Announces 

Guilty Plea of Former Rochester Pharmacy Technician Who Posed As Doctor to Illegally 

Obtain Prescription Narcotics (May 15, 2015), https://ag.ny.gov/press-release/agschneiderman-announces-guilty-plea-former-rochester-pharmacy-technician-who-posed.

2. Press Release, Eric T. Schneiderman, N.Y. Att’y Gen., A.G. Schneiderman Announces 

Sentencing of Rochester Man Who Posed As Doctor in Order to Illegally Obtain Drugs 

(May 29, 2015), https://ag.ny.gov/press-release/ag-schneiderman-announces-sentencingrochester-man-who-posed-doctor-order-illegally.
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Case Summary 18: Woman Sells Her Own Hydrocodone

• Defendant(s): Pamela Sue Gilbertson

• Case Year: 2011

• State: Indiana

• Case Status: In July 2011, a judge sentenced Gilbertson to two years of probation after she 

pleaded guilty in Jefferson County Circuit Court to possession of a narcotic drug. 

• Description of Scheme: Gilbertson obtained Medicaid-funded hydrocodone through her 

own prescriptions and sold some of the pills on the black market. 

• Key Facts: 

o Indiana State Police arrested Gilbertson, who had no previous criminal record, in May 

2010. 

o Law enforcement acted on a tip that Gilbertson had been selling her pills.

o The original charges, dropped as part of Gilbertson’s plea deal, included dealing of a 

controlled substance.

o Gilbertson admitted she used Medicaid, along with disability insurance, to purchase 

the hydrocodone she sold to others.

Sources:

1. Probation for Madison Woman Who Sold Pills, MADISON COURIER (July 26, 2011), 

https://madisoncourier.com/Content/News/News/Article/Probation-for-Madison-womanwho-sold-pills/178/961/64234.
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Case Summary 19: Pennsylvania Addiction Clinic-Turned-Pill Mill 

• Defendant(s): Dr. Dominic W. Dileo 

• Case Year: 2017

• State: Pennsylvania 

• Case Status: Dr. Dileo pleaded guilty in July 2016 in U.S. District Court in Pittsburgh to 

distributing Xanax and conspiracy to distribute Suboxone. A judge sentenced him to one year 

in prison.

• Description of Scheme: Dileo was head doctor of a Pennsylvania addiction clinic that 

illegally distributed prescription pain pills and defrauded Medicaid. Three other clinic 

employees pleaded guilty in the scheme.

• Key Facts : 

o The scheme involved the illegal distribution of Suboxone, a drug used to treat opiate 

addiction that also can be addictive. Authorities described the clinic as a “pill mill.” 

o Prosecutors said clinic employees defrauded Medicaid by submitting bills for services 

they knew were not covered and by falsifying medical records in preparation for a 

federal audit.

Sources:

1. Press Release, U.S. Att’y Off. W. Dist. of Pa., Health Care Fraud Charge Filed in Fayette 

County Addiction Specialists Inc. Case (April, 6, 2016), https://www.justice.gov/usaowdpa/pr/health-care-fraud-charge-filed-fayette-county-addiction-specialists-inc-case.

2. Pharmacy Choice, Former Methadone Clinic Owners Owe $314K in Penalties, 

https://www.pharmacychoice.com/news/article.cfm?Article_ID=1767152.

3. Paul Peirce, Uniontown Doctor Dileo Indicted in Pills Scheme, TRIB LIVE,

http://triblive.com/news/regional/9872278-74/sugarmann-clinic-counts (last visited Nov. 

22, 2017).

4. Mark Hofmann, Former North Union Methadone Clinic Operator Sentenced to One Year 

in Prison in Pill-Mill Case, HERALD STANDARD (July 27, 2017), 

http://www.heraldstandard.com/news/local_news/former-north-union-methadone-clinicoperator-sentenced-to-one-year/article_149953df-d2a4-5330-83fc-1edd90533622.html

5. Joe Mandak, Methadone Clinic Operator Gets Prison for Health Care Fraud, AP (July 

27, 2017), https://www.usnews.com/news/best-states/pennsylvania/articles/2017-07-

27/methadone-clinic-operator-faces-prison-in-pill-mill-case
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Case Study 20: Doctor Shopping at Medicaid’s Expense 

• Defendant(s): James Jeffrey Bond

• Case Year: 2015

• State: Tennessee

• Case Status: Bond pleaded guilty in Sumner County Circuit Court to committing fraud. 

• Description of Scheme: Bond improperly obtained opioid painkillers using benefits from 

TennCare, Tennessee’s version of Medicaid.

• Key Facts:

o A resident of Gallatin, Bond defrauded Medicaid to obtain illicit Oxycodone, 

Hydrocodone and Tramadol.

o He engaged in the scheme by going “doctor shopping”—seeking out different doctors 

to obtain controlled substances. Studies show that people seeking opioids most 

commonly engage in doctor shopping.

o Bond was on probation from a similar charge when he was arrested again and charged 

with defrauding Medicaid.

Sources:

1. Case Disposition, Tennessee v. Bond, No. 83CC1-2014-CR-859 (Tenn. Crim. Ct. Mar. 

26, 2015).

2. Chris Butler, James Bond Allegedly Ripped Off Tennessee Taxpayers, Feds Seem 

Apathetic, Watchdog.org, Nov. 11, 2014, https://www.watchdog.org/news/james-bondallegedly-ripped-off-tennessee-taxpayers-feds-seem-apathetic/article_0f30f69c-4683-

5b97-a19b-b2bc250e72da.html.

3. Chris Elkins, Doctor Shopping for Prescription Drugs, DrugRehab.com., 

https://www.drugrehab.com/addiction/prescription-drugs/doctor-shopping/.
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Case Study 21: Cheating Medicaid out of Almost a Million Dollars 

• Defendant(s): Dr. Diana Williamson and eight co-defendants.

• Case Year: 2012

• State: New York

• Case Status: Dr. Williamson pleaded guilty in U.S. District Court in Manhattan to 

conspiracy to distribute oxycodone and conspiracy to commit health care fraud. A federal 

judge sentenced her to three years in prison, fined her $17,500, and ordered her to pay 

$301,000 in restitution and forfeiture. All eight co-defendants pleaded guilty and have been 

sentenced.

• Description of Scheme: Dr. Williamson defrauded Medicaid out of more than $300,000 by 

writing bogus oxycodone and Percocet prescriptions for about 30 patients at a Harlem clinic. 

She blamed her actions on what she called an alternate personality named “Nala.”

• Key Facts:

o Williamson, a Manhattan-based primary care physician, wrote prescriptions that 

resulted in her patients obtaining about 11,000 oxycodone pills through health care 

fraud. Her patients had no legitimate need for the medication.

o The patients then sold the pain pills to a drug ring, which peddled them on the street 

for up to $33 each.

o Medicaid wound up reimbursing nearly $1 million in drug expenses attributable to the 

oxycodone prescriptions that Williamson wrote.

o Preet Bharara, then-U.S. attorney in Manhattan, stated that Williamson “violated the 

central tenet of being a doctor—to first do no harm—and cheated an already-strapped 

Medicaid system out of almost a million dollars.”

Sources:

1. Doctor Who Supplied Oxycodone Ring Sentenced In Manhattan Federal Court to 36 

Months in Prison, Targeted News Service, Dec. 19, 2012.

2. Daniel Miller, My Alternate Personality Made Me Defraud Medicaid of $300,000, 

Claims Doctor, DailyMail.com, Oct. 2, 2012, http://www.dailymail.co.uk/news/article2211698/Diana-Williamson-My-alternate-personality-defraud-Medicare-hundredsthousands.html.

Bruce Golding, Dueling Alter-Egos of Harlem Pill Peddle Doc Have Made Peace, N.Y. 

Post, Oct. 8, 2012, https://nypost.com/2012/10/08/dueling-alter-egos-of-harlem-pillpeddle-doc-have-made-peace/.
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Case Summary 22: A Chiropractic Clinic that Fed Opioid Addiction

• Defendant(s): Dr. Edward Sweeney, Dr. Mark Boles, and Dr. Jack Taylor

• Case Year: 2016 

• State: Pennsylvania

• Case Status: Dr. Sweeney pleaded guilty in 2015 to participating in a corrupt organization, 

after originally being charged with Medicaid fraud, and was sentenced to two years of 

probation. Dr. Boles pleaded no contest in 2016 to participating in a corrupt organization, 

also after originally being charged with Medicaid fraud. A judge sentenced him to five years 

of probation. Dr. Taylor pleaded guilty in 2016 to insurance fraud and was sentenced to 

seven years of probation.

• Description of Scheme: Doctors operating out of a chiropractic clinic illegally prescribed 

OxyContin, oxycodone, hydrocodone, and other controlled substances in return for insurance 

reimbursements. 

• Key Facts:

o Authorities said the doctors prescribed the illicit drugs to people who did not need the 

medications and were using them “as a ruse in order to feed their addictions.”

o The chiropractic clinic received more than $2 million in insurance reimbursements 

over five years.

o Pennsylvania Attorney General Kathleen G. Kane said the evidence showed “that 

these physicians believed they were above the law and what’s worse, they allegedly 

preyed upon drug-addicted patients to line their own pockets.” She added that 

“Doctors are supposed to help free patients from the grip of addiction, not put them 

into the throes of it.”

Sources: 

1. Press Release, Kathleen G. Kane, Penn. Att’y Gen., Three Doctors Charged in 

Prescription Drug, Theft Scheme at Pittsburgh-area Chiropractic Clinic (Jan. 1, 2014), 

https://www.attorneygeneral.gov/Media_and_Resources/Press_Releases/Press_Release/?

pid=374.

2. Molly Born, 3 Charged With Illegal Prescriptions In Rostraver, Pittsburgh Post-Gazette, 

Jan. 17, 2014, http://www.post-gazette.com/local/region/2014/01/17/2-AlleghenyCounty-doctors-Westmoreland-County-chiropractor-charged-in-drugscheme/stories/201401170133.
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3. Rich Cholodofsky, Belle Vernon Chiropractor Given Probation for Insurance Fraud, 

TRIBLive, Feb. 21, 2017, http://triblive.com/local/westmoreland/11975227-74/taylorclinic-probation.

4. Rich Cholodofsky, Doctor Gets Probation for Rostraver Pain Clinic Insurance Scam, 

TRIBLive, Aug. 3, 2017, http://triblive.com/local/westmoreland/12581290-74/doctorgets-probation-for-belle-vernon-pain-clinic-insurance-scam.
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Case Summary 23: Woman Accused of Impersonating Her Twin Sister to Get MedicaidFunded Opioids

• Defendant(s): Ruby Anne Clement

• Case Year: 2014

• State: Georgia

• Case Status: Prosecutors charged Clement with forgery in 2014.

• Description of Scheme: Clement allegedly impersonated her twin sister to secure 

prescription medication, which was billed to Medicaid. 

• Key Facts:

o Clement allegedly began posing as her twin sister, who had been in jail, to obtain pain 

care treatments at a medical facility.

o Prosecutors accused Clement of receiving a lumbar procedure while impersonating 

her sister and getting a prescription afterward for oxycodone. 

o After receiving a second oxycodone prescription, Clement went back to the clinic, 

where she was met by deputies and arrested. 

Sources:

1. Aimee Jones, Woman Poses As Twin For Pain Meds, The Rockdale Citizen, July 17, 

2014.
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Committee on Homeland Security and Governmental Affairs

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Case Summary 24: “Those Pills Are More Serious than Cocaine and Heroin”

• Defendant(s): Doraymus Robinson and Carolyn Richardson 

• Case Year: 2017

• State: New York

• Case Status: Richardson pleaded guilty in April 2017 to conspiracy to distribute oxycodone. 

A judge sentenced her to 12 years in prison. Robinson pleaded guilty to the same charge in 

March 2017 and received eight years in prison. 

• Description of Scheme: The duo created fake prescription pads using an authentic Drug 

Enforcement Administration number of an unrelated doctor. Posing as this doctor, they 

fraudulently wrote and filled prescriptions for opioids, paying for the drugs with Medicaid 

cards or cash, and re-selling the medication on the street. 

• Key Facts: 

o Law enforcement officials recovered Medicaid and government identification cards 

belonging to dozens of individuals, which were used to write the fake prescriptions.

o When authorities first arrested Richardson, she possessed 252 oxycodone pills, 230 

methadone tablets, and 108 Xanax pills. Three months later, authorities again arrested 

Richardson after she filled new prescriptions for 180 oxycodone and 120 methadone 

tablets

o At sentencing, a judge scolded Robinson for “buying . . . literally thousands, 

thousands of oxycodone pills and selling them for substantial amounts of money . . . . 

[T]hose pills are more serious than cocaine and heroin.”

Sources: 

1. Press Release, U.S. Att’y Off., E.D.N.Y., Staten Island Woman Sentenced to 12 Years’ 

Imprisonment For Illegal Distribution of Oxycodone (Aug. 2, 2017), 

https://www.justice.gov/usao-edny/pr/staten-island-woman-sentenced-12-yearsimprisonment-illegal-distribution-oxycodone.

2. Complaint, United States v. Richardson, No. 1:16-cr-00461 (N.Y. Magis. Ct. July 26, 

2016).

3. Paul Frangipane, Brooklyn Judge Scolds Pill Peddler for Contributing to Opioid Crisis, 

Gets Eight Years, Brooklyn Daily Eagle, June 28, 2017, 

http://www.brooklyneagle.com/articles/2017/6/28/brooklyn-judge-scolds-pill-peddlercontributing-opioid-crisis-gets-eight-years.
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4. Mira Wassef, South Beach Woman Pleads Guilty to Running Prescription Drug Ring, 

Staten Island Live, Apr. 26, 2017, 

http://www.silive.com/news/2017/04/south_beach_woman_pleads_guilt.html.
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Case Summary 25: Defrauding Medicaid In Several Ways

• Defendant(s): Dr. Fernando Jayma 

• Case Year: 2017

• State: Massachusetts

• Case Status: In May 2017, a judge sentenced Dr. Jayma to two-and-a-half years in jail after 

he pleaded guilty in Berkshire Superior Court to Illegal Prescribing of Controlled Substances, 

Medicaid False Claims, and Larceny. 

• Description of Scheme: Dr. Jayma prescribed opioids to patients, many of whom are 

substance abusers, with no medical purpose. Many of these patients filled the illicit 

prescriptions with Medicaid cards. 

• Key Facts: 

o Dr. Jayma defrauded Medicaid by asking another doctor to see his patients when he 

was away, even though the doctor was not credentialed as a Medicaid practitioner. 

Dr. Jayma’s staff then billed Medicaid as if Dr. Jayma had seen the patients himself. 

o Dr. Jayma ignored red flags of patients’ substance abuse as he continued to prescribe 

them oxycodone and other opioids. 

o In 2013, Dr. Jayma was the second-highest prescriber of oxycodone within the 

Massachusetts Medicaid system, prescribing opiates at 11 times the average rate. 

Sources: 

1. Press Release, Maura Healey, Mass. Att’y Gen., Ludlow Doctor Sentenced to Jail for 

Illegally Prescribing Opioids to At-Risk Patients (May 16, 2017), 

http://www.mass.gov/ago/news-and-updates/press-releases/2017/2017-05-16-ludlowdoctor-sentenced.html.

2. Press Release, Maura Healey, Mass. Att’y Gen., Ludlow Doctor Pleads Guilty in 

Connection with Illegally Prescribing Opioids to At-Risk Patients (Apr. 4, 2017), 

http://www.mass.gov/ago/news-and-updates/press-releases/2017/2017-04-04-ludlowdoctor-pleads-guilty.html.

3. Buffy Spencer, Ludlow Doctor Fernando Jayma Finally Makes it to Court, Denies 

Illegally Prescribing Opioids and Other Charges, Mass. Live, Dec. 17, 2015, 

http://www.masslive.com/news/index.ssf/2015/12/ludlow_doctor_fernando_jayma_d.htm

l.
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

76

Case Summary 26: Jury Convicts Doctor Of Health Care Fraud 

• Defendant(s): Dr. George Kudmani 

• Case Year: 2017

• State: Kentucky

• Case Status: A federal jury convicted Dr. Kudmani in January 2017 in U.S. District Court 

in Louisville of unlawfully distributing controlled substances and health care fraud. A judge 

sentenced him to four years in prison.

• Description of Scheme: Dr. Kudmani prescribed medically unnecessary opioids to patients 

in exchange for cash and billed Medicaid for medically unnecessary transvaginal ultrasounds. 

• Key Facts: 

o Dr. Kudmani charged new patients $75 for gynecological exams and $35 in cash for 

subsequent visits for refills of oxycodone and hydrocodone. 

o Medicaid paid Dr. Kudmani $555.73 for each ultrasound.

o Dr. Kudmani never actually performed some of the ultrasounds. For others, his office 

never prepared procedure reports for patients. 

o The court ordered Dr. Kudmani to pay $77,384 in restitution to Kentucky’s Medicaid 

program for fraudulent billing. 

Sources: 

1. Press Release, U.S. Att’y Off., W.D. Ky., Louisville Physician Sentenced to 48 Months 

in Prison for Unlawful Distribution of Controlled Substances and Health Care Fraud 

(June 5, 2017), https://www.justice.gov/usao-wdky/pr/louisville-physician-sentenced-48-

months-prison-unlawful-distribution-controlled.

2. Press Release, U.S. Att’y Off., W.D. Ky., Louisville Physician Convicted of Unlawful 

Distribution of Controlled Substances and Health Care Fraud (Jan. 26, 2017), 

https://www.justice.gov/usao-wdky/pr/louisville-physician-convicted-unlawfuldistribution-controlled-substances-and-health.
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Committee on Homeland Security and Governmental Affairs

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77

Case Summary 27: Forging Opioid Prescriptions Using Real Doctors’ Names

• Defendant(s): Barry Lee Dorsey, II; Tyesha Renee Dorsey; and Zachary Edward Rathke

• Case Year: 2017

• State: Pennsylvania

• Case Status: In March 2017, a federal grand jury of the U.S. District Court in Pittsburgh 

indicted all three defendants on charges including conspiracy to commit offenses against the 

United States and health care fraud. In July 2017, Rathke pleaded guilty to conspiracy and in 

October 2017, Mr. Dorsey pleaded guilty to conspiracy and aggravated identity theft. Both 

are awaiting sentencing. Ms. Dorsey’s trial is scheduled for 2018. 

• Description of Scheme: The three defendants allegedly forged prescriptions, filled them 

using Medicaid benefits, and sold the drugs on the street for substantial profit. 

• Key Facts: 

o Medicaid was the primary funding mechanism of the fraudulent prescriptions, which 

were mostly for Oxycodone or Percocet.

o The defendants forged the prescriptions using the names, medical license numbers, 

and signatures of real doctors.

Sources: 

1. Press Release, U.S. Att’y Off., W.D. Penn., Three Pittsburgh Residents Charged in 

Forged Prescription Ring (Mar. 6, 2017), https://www.justice.gov/usao-wdpa/pr/threepittsburgh-residents-charged-forged-prescription-ring.

2. Case Proceedings, United States v. Dorsey, No. 2:17-cr-50 (W.D. Penn. Mar. 3, 2017).
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Committee on Homeland Security and Governmental Affairs

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78

Case Summary 28: Car Crash Leads To Opioid Addiction, Medicaid Fraud 

• Defendant(s): Ashley Bardell 

• Case Year: 2017

• State: Connecticut

• Case Status: In February 2017, a judge sentenced Bardell to 40 months in prison after she 

pleaded guilty in Bristol Superior Court to sale of narcotics. Authorities also charged five 

other individuals. 

• Description of Scheme: As part of a prescription drug ring, Bardell filled illicit 

prescriptions for oxycodone and paid for most of the prescriptions with her Medicaid 

insurance. 

• Key Facts: 

o According to the Drug Enforcement Administration, the prescriptions that Bardell 

used to purchase opioids came from a forged doctor’s prescription pad. 

o Bardell received a total of 600 Oxycodone tablets with the fraudulent prescriptions, 

some of which she later sold for cash.

o Bardell’s attorney told the court that Bardell became dependent on painkillers when 

she was prescribed Percocet following a car accident in 2014. 

Sources: 

1. Justin Muszynski, Terryville Woman Sentenced to 40 Months in Prison in Connection 

With DEA Investigation, The Bristol Press, Feb. 1, 2017.

2. Police Arrest Third Suspect in Prescription Drug Fraud Ring, Coalition Against 

Insurance Fraud, Apr. 6, 2016, http://www.insurancefraud.org/IFNSdetail.htm?key=22426.
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Committee on Homeland Security and Governmental Affairs

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79

Case Summary 29: Millions Of Doses Of Opioids After Little Medical Examination

• Defendant(s): Dr. Abbey Akinwumi

• Case Year: 2016

• State: Michigan

• Case Status: Dr. Akinwumi pleaded guilty in November 2015 in U.S. District Court in 

Detroit to prescribing pain medicine outside the bounds of legitimate medical practice. A

judge sentenced her to seven years in prison. 

• Description of Scheme: Dr. Akinwumi prescribed large amounts of medically unnecessary 

opioids, defrauding Medicaid on behalf of patients receiving the drugs, which were then resold on street. 

• Key Facts: 

o In total, Dr. Akinwumi admitted to issuing, without medical justification, more than 

500,000 dosage units of Roxicodone, 300,000 dosage units of Opana, and more than 

2 million dosage units of hydrocodone. 

o She wrote many of these prescriptions after only a cursory examination of the patient, 

or with no examination at all. 

o In exchange for the prescriptions, Dr. Akinwumi billed the patients’ Medicaid 

insurance, along with Medicare and private insurance, for medically unnecessary 

procedures that included draining abscesses and repairing wounds.

Sources: 

1. Press Release, U.S. Att’y Off., E.D. Mich., Doctor Sentenced to 84 Months in Prison for 

Distributing Prescription Drugs (Mar. 1, 2016), https://www.justice.gov/usaoedmi/pr/doctor-sentenced-84-months-prison-distributing-prescription-drugs.
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Committee on Homeland Security and Governmental Affairs

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80

Case Summary 30: Operation Pill Count 

• Defendant(s): Timothy E. Riley and Darla L. Jackson

• Case Year: 2016

• State: Ohio

• Case Status: In December 2016, Jackson pleaded guilty in Perry County Common Pleas 

Court to aggravated trafficking in drugs.. In March 2016, authorities charged Riley with 

felony drug trafficking and permitting drug abuse. 

• Description of Scheme: Jackson filled her prescription for Oxycodone, then re-sold the 

drugs on the street. The case was part of a broader prescription drug investigation in which 

prosecutors charged 12 people. Medicaid funded many of the illicit prescriptions.

• Key Facts: 

o Detectives watched Jackson fill her prescription for oxycodone at a pharmacy and 

then sell the pills to customers waiting outside in the parking lot.

o Riley allegedly pre-arranged those drug sales outside the pharmacy.

o The broader investigation was known as “Operation Pill Count.”

Sources: 

1. Staff Report, Seven Drug-Related Arrests Made in Perry County, Times Recorder 

(Zanesville), Mar. 15, 2016, 

http://www.zanesvilletimesrecorder.com/story/news/local/2016/03/15/seven-drugrelated-arrests-made-perry-county/81829566/

2. Perry County Sheriff’s Office, FACEBOOK (Mar. 15, 2016), 

https://www.facebook.com/permalink.php?story_fbid=345019148955811&id=17782808

5674919.

3. Common Pleas Court, Perry County Tribune, Dec. 27, 2016.
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Committee on Homeland Security and Governmental Affairs

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81

Case Summary 31: An Oxycodone Distribution Mill, At Medicaid’s Expense 

• Defendant(s): Kian Gohari

• Case Year: 2016

• State: New York

• Case Status: A federal jury in March 2017 convicted Gohari in U.S. District Court in 

Manhattan of conspiracy to distribute narcotics and conspiracy to commit mail fraud. A 

judge sentenced him to 30 months in prison. 

• Description of Scheme: Gohari owned a pharmacy in Brooklyn, where he distributed more 

than 25,000 medically unnecessary oxycodone pills, billing the majority of the pills to 

Medicaid and defrauding the program out of hundreds of thousands of dollars.

• Key Facts: 

o Gohari distributed the illicit oxycodone pills to a co-conspirator who brought him 

prescriptions for high-end medications—including HIV drugs and expensive pain 

gels—many of which were also medically unnecessary. 

o Authorities said Gohari billed Medicaid for these high-end prescriptions for hundreds 

of thousands of dollars, in addition to fraudulently billing Medicaid for the majority 

of the oxycodone pills.

o Gohari’s co-conspirator sold the oxycodone pills in Brooklyn and Manhattan.

o Preet Bharara, then-U.S. attorney in Manhattan, said Gohari “turned his Brooklyn 

pharmacy into an illegal oxycodone distribution mill.”

Sources:

1. Press Release, U.S. Att’y Off., S.D.N.Y., Pharmacist Kian Gohari Convicted in 

Manhattan Federal Court for Conspiring to Distribute Oxycodone and Conspiring to 

Commit Healthcare Fraud (Nov. 10, 2016), https://www.justice.gov/usaosdny/pr/pharmacist-kian-gohari-convicted-manhattan-federal-court-conspiring-distribute.

2. Press Release, U.S. Att’y Off., S.D.N.Y., Pharmacist and Four Other Individuals Charged

in Manhattan Federal Court in Oxycodone Distribution Scheme (Mar. 1, 2016), 

https://www.justice.gov/usao-sdny/pr/pharmacist-and-four-other-individuals-chargedmanhattan-federal-court-oxycodone.

3. Sentencing, United States v. Cabrera, 227 F. Supp. 3d 313 (S.D.N.Y. Accessed Jan. 10, 

2018).
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Committee on Homeland Security and Governmental Affairs

United States Senate

82

Case Summary 32: Medically Unnecessary Opioids Lead to Four Patient Deaths

• Defendant(s): Dr. Charles Fred Gott

• Case Year: 2016

• State: Kentucky

• Case Status: In June 2015, a federal grand jury in U.S. District Court in Bowling Green 

indicted Dr. Gott on charges of conspiracy to distribute and dispense controlled substances 

without a legitimate medical purpose, health care fraud, and money laundering. In July 2016, 

he was indicted on further charges related to the death of several of his patients. He has 

pleaded not guilty, and his trial is scheduled to begin in February 2018. 

• Description of Scheme: Dr. Gott allegedly prescribed medically unnecessary opioids, 

including pills to patients who died as a result of the medication. Prosecutors allege Dr. Gott 

fraudulently billed Medicaid, Medicare, and private insurance for office visits and for 

expensive, medically unnecessary tests.

• Key Facts: 

o At least four of Dr. Gott’s patients died, authorities said, as a result of the medically 

unnecessary medications he prescribed, which included Methadone, Hydrocodone, 

Clonazepam, and Oxymorphone. 

o To bolster his billings to Medicaid, Medicare, and private insurance, Dr. Gott 

allegedly directed staff to administer medically unnecessary electrocardiogram and 

spirometry tests to patients. 

Sources: 

1. Press Release, FBI, Bowling Green Physician Charged with Conspiracy to Dispense 

Controlled Substances, Health Care Fraud, and Money Laundering (June 16, 2015), 

https://www.fbi.gov/contact-us/field-offices/louisville/news/press-releases/bowlinggreen-physician-charged-with-conspiracy-to-dispense-controlled-substances-health-carefraud-and-money-laundering.

2. Press Release, U.S. Att’y Off., W.D. Ky., Bowling Green Physician Charged with 

Unlawful Distribution and Dispensing of Controlled Substance Causing Serious Physical 

Injury and/or Death, Health Care Fraud Resulting in Death, and Conspiracy to Dispense 

Controlled Substances (July 13, 2016), https://www.justice.gov/usao-wdky/pr/bowlinggreen-physician-charged-unlawful-distribution-and-dispensing-controlled.
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

83

Case Summary 33: Doctor Writes Fraudulent Opioid Prescriptions, Defunds Medicaid

• Defendant(s): Dr. John Terry; Thomas Ray; and Stephen Heffner, Jr.

• Case Year: 2016

• State: Pennsylvania

• Case Status: Dr. Terry pleaded guilty in January 2016 in U.S. District Court in Williamsport 

to writing fraudulent oxycodone prescriptions. A judge sentenced him to 20 months in 

prison. Ray pleaded guilty to possession with intent to distribute a controlled substance and 

was sentenced to 71 months in prison. Heffner pleaded guilty to theft or embezzlement in 

connection with health care and was sentenced to six months of probation.

• Description of Scheme: Dr. Terry wrote fraudulent opioid prescriptions for Ray and in 

Heffner’s name, defrauding Medicaid and Medicare. 

• Key Facts: 

o Prosecutors said Terry wrote oxycodone prescriptions for Ray that showed reckless 

disregard because the drugs were medically unnecessary and were resold on the 

street. Medicaid paid for these prescriptions.

o Terry wrote other fraudulent oxycodone prescriptions in Heffner’s name, even though 

Heffner was not his patient and the drugs were intended for someone else. Medicare 

funded those prescriptions.

o After authorities searched his office in 2013, Dr. Terry voluntarily surrendered his 

medical license and Drug Enforcement Administration registration.

Sources: 

1. Press Release, U.S. Att’y Gen., M.D. Penn., Tioga County Physician and Drug Dealer 

Sentenced for Health Care Fraud (May 26, 2016), https://www.justice.gov/usaomdpa/pr/tioga-county-physician-and-drug-dealer-sentenced-health-care-fraud
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

84

Case Summary 34: Selling Opioids To Undercover Police 

• Defendant(s): James “Tank” Williamson

• Case Year: 2014

• State: New Jersey

• Case Status: Williamson pleaded guilty in Camden County Superior Court to distribution of 

a controlled dangerous substance. A judge sentenced him to seven years in prison.

• Description of Scheme: Williamson sold prescription narcotics to an undercover 

investigator, part of a larger probe into doctors and pharmacies suspected of illegally 

diverting drugs through Medicaid beneficiaries.

• Key Facts: 

o In his plea agreement, Williamson admitted that he sold oxycodone to an undercover 

investigator between October 2012 and January 2013.

o According to authorities, Williamson also sold more than an ounce of Percocet pills 

to an undercover officer during three transactions at a Camden restaurant.

Sources:

1. Press Release, John J. Hoffman, N.J. Att’y Gen., Camden County Man Pleads Guilty to 

Distributing Prescription Narcotics to Undercover Investigator (Feb. 7, 2014), 

http://nj.gov/oag/newsreleases14/pr20140207a.html.

2. Christopher Silvestri, Crime Update; Phila. Man Facing DUI Charge, Courier-Post 

(Cherry Hill), Mar. 16, 2014.
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Committee on Homeland Security and Governmental Affairs

United States Senate

85

Case Summary 35:Visiting A Doctor, Lying About Needing Opioids 

• Defendant(s): Brandy Archie

• Case Year: 2015

• State: Missouri

• Case Status: Archie pleaded guilty in December 2015 in U.S. District Court in St. Louis to 

health care fraud and possession with intent to distribute prescription drugs. A federal judge 

sentenced her to one year and one day in prison.

• Description of Scheme: Ms. Archie sold Medicaid-funded pain pills and other drugs. 

• Key Facts: 

o Between October 2014 and January 2015, Archie sold nearly 1,000 doses of Percocet, 

Adderall, and other drugs.

o Archie visited a doctor numerous times and falsely stated she needed prescription 

drugs for her medical conditions. She later admitted she had always intended to sell 

the medication.

Sources:

1. Press Release, U.S. Att’y Gen., E.D. Mo., Local Woman Sentenced on Health Care Fraud 

Charges (Mar. 25, 2016), https://www.justice.gov/usao-edmo/pr/local-woman-sentencedhealth-care-fraud-charges.

2. Robert Patrick, St. Louis Woman Admits Pill Fraud, St. Louis Post-Dispatch, Dec. 4, 

2015, http://www.stltoday.com/news/local/crime-and-courts/st-louis-woman-admits-pillfraud/article_df2b3d77-7d48-56e0-b9fd-e8e7bbb09371.html.
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Committee on Homeland Security and Governmental Affairs

United States Senate

86

Case Summary 36: Pill Mill With A Motorcycle Club; ‘The Cat In The Hat’ From The 

Stand

• Defendant(s): Dr. William J. O’Brien III

• Case Year: 2016

• State: Pennsylvania

• Case Status: A federal jury in U.S. District Court in Philadelphia convicted Dr. O’Brien on 

charges including conspiracy to distribute controlled substances, distribution of controlled 

substances resulting in death, conspiracy to commit money laundering, conspiracy to commit 

bankruptcy fraud; and making false statements under oath in a bankruptcy proceeding. A 

judge sentenced him to 30 years in prison.

• Description of Scheme: Dr. O’Brien, who practiced osteopathic medicine, operated a “pill 

mill” with members of a motorcycle club. The pill mill dispensed and resold hundreds of 

thousands of oxycodone and methadone pills. Medicaid paid for some of the medication.

• Key Facts:

o Members of the conspiracy sold controlled substances worth about $5 million. Dr. 

O’Brien pocketed an estimated $2 million in proceeds.

o Dr. O’Brien mounted “an unorthodox defense that included asking a witness to read 

Dr. Seuss’ The Cat in the Hat from the witness stand.”

o Nick DiGiulio, of the Department of Health and Human Services Office of Inspector 

General, said after the verdict: “We are thankful the jury saw the obvious—that the 

defendant is a dangerous person exploiting his medical license to operate as a drug 

dealer.”

Sources:

1. Jeremy Roebuck, Bucks County Pill-Mill Doc Sentenced to 30 Years for Peddling 

Prescriptions to Pagans, Prostitutes, The Inquirer, Oct. 6, 2016, 

http://www.philly.com/philly/news/20161006_Bucks_County_pill_mill_doc_sentenced_t

o_30_years_for_peddling_prescriptions_to_Pagans__prostitutes.html.

2. Press Release, U.S. Att’y Off., E.D. Penn., Jury Finds Philadelphia Doctor Guilty of 

Running Pill Mill and Causing a Death Through Illegal Distribution (June 29, 2016), 

https://www.justice.gov/usao-edpa/pr/jury-finds-philadelphia-doctor-guilty-running-pillmill-and-causing-death-through.
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3. Superseding Indictment Adds Charges and Members of the Pagans to Pill Mill Case 

Against Pennsylvania Doctor, Legal Monitor Worldwide, July 17, 2015.

4. John George, Local Doctor, Pagans Motorcycle Club Members Charged in Pill Mill 

Case, Phila. Bus. J., July 16, 2015, 

https://www.bizjournals.com/philadelphia/blog/health-care/2015/07/pagans-moto-pillmill-oxycodone-obrien-charges.html.
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

88

Case Summary 37: Pharmacy-Hopping With A Medicaid Card 

• Defendant(s): Earl Kearson

• Case Year: 2015

• State: Connecticut 

• Case Status: Prosecutors charged Kearson with possession of narcotics, insurance fraud, 

forgery, and illegally obtaining a controlled substance.

• Description of Scheme: Mr. Kearson was accused of unlawfully filling a prescription for 

120 Oxycodone pills using his Medicaid card. 

• Key Facts:

o Kearson allegedly presented a prescription, which was written by a doctor at a cancer 

hospital, for the oxycodone at a CVS store. 

o The pharmacist became suspicious and alerted police, saying there had been a rash of 

questionable prescriptions in recent weeks.

o Detectives verified that the oxycodone prescription had been previously filled at a 

Walgreens with Kearson’s Medicaid account.

Sources:

1. Man Accused of Forging Prescription, Record-Journal (Conn.), Aug. 8, 2015.
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

89

Case Summary 38: Massive Amounts Of Opioids, Multiple Patients And Medicaid Fraud

• Defendant(s): Dr. John Katsetos

• Case Year: 2015

• State: Connecticut

• Case Status: Dr. Katsetos pleaded guilty in U.S. District Court in Hartford to conspiracy to 

distribute and to possess with intent to distribute narcotics, and health care fraud. He was 

sentenced to seven years in prison, ordered to pay $497,789 in restitution and ordered to 

forfeit $550,000, which was the value of his medical practice. 

• Description of Scheme: Dr. Katsetos, who practiced medicine for more than 20 years, 

prescribed more than two million dosages of highly addictive opioids to more than 2,000 

patients, defrauding Medicaid and Medicare. 

• Key Facts:

o Dr. Katsetos failed to perform rudimentary examinations of patients to justify giving 

them oxycodone and other medications. He had been previously warned about his 

prescription practices by a doctor and several pharmacists, some of whom stopped 

filling the prescriptions.

o Dr. Katsetos saw multiple patients at once and billed Medicaid and Medicare for 

individual visits for each of those patients. At least one former patient, who traveled 

approximately 180 miles to receive prescriptions from Dr. Katsetos, died of an 

overdose.

o Deirdre M. Daly, then-U.S. attorney for Connecticut, said Dr. Katsetos “repeatedly 

violated his oath to protect his patients from harm,” and “flooded our community with 

highly addictive controlled substances.”

Sources:

1. Press Release, U.S. Att’y Off., Conn., Doctor Sentenced to 7 Years in Prison for Illegally 

Prescribing Narcotics, Defrauding Government Programs (Nov. 4, 2015), 

https://www.justice.gov/usao-ct/pr/doctor-sentenced-7-years-prison-illegally-prescribingnarcotics-defrauding-government.

2. Former Milford, Stamford Doctor Gets 7 Years for Illegally Prescribing Narcotics, 

Healthcare Fraud, New Haven Register, Nov. 4, 2015, 

http://www.nhregister.com/article/NH/20151104/NEWS/151109750.
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Committee on Homeland Security and Governmental Affairs

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90

Case Summary 39: So Many Opioids the Pharmacy Can’t Keep Up

• Defendant(s): Dr. Sam Jahani and Dr. Eric A. Peper

• Case Year: 2015

• State: Colorado

• Case Status: Dr. Jahani pleaded guilty in 2015 in U.S. District Court in Denver to 

conspiracy. A judge sentenced him to six months in prison. Dr. Peper pleaded guilty to 

conspiracy and received a sentence of time served. 

• Description of Scheme: According to court documents, the two doctors prescribed large 

amounts of opioid pain relievers to patients without medical need for the drugs, defrauding 

Medicaid, Medicare and private insurers. Several patients died of overdoses. 

• Key Facts:

o Pharmacists told authorities that Dr. Jahani and Dr. Peper, who worked together at a 

clinic, prescribed oxycodone at such high levels that pharmacies had trouble keeping 

the drug in stock.

o Emergency department personnel reported visits from numerous Jahani and Peper 

patients on dangerously high levels of narcotics. 

o A government expert determined that many patients seen by the two doctors were 

prescribed opioids with virtually no physical examination and little examination of 

their medical histories.

o Court documents said the duo fraudulently billed Medicaid, Medicare and private 

insurers for office visits associated with the illicit prescriptions.

Sources:

1. Plea Agreement, United States v. Peper, No. 11-cr-00302 (D. Co. 2015).

2. Katharhynn Heidelberg, Two Years Contemplated for Jahani, The Montrose Daily Press, 

Nov. 7, 2015.

3. Second Doctor Pleads Guilty in Colorado Painkiller Case, CBS Denver, Nov. 7, 2015, 

http://denver.cbslocal.com/2015/11/07/second-doctor-pleads-guilty-in-coloradopainkiller-case/.

4. No Jail Time For Former Colorado Doctor Accused Of Overprescribing Painkillers, 

Denver 7 News, Feb. 25, 2016, http://www.thedenverchannel.com/news/local-news/nojail-time-for-former-colorado-doctor-accused-of-overprescribing-painkillers.
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5. Press Release, U.S. Att’y Off., Co., Two Former Western Colorado Doctors Indicted for 

Illegally Prescribing Controlled Substances (Aug. 9, 2011), 

https://www.justice.gov/archive/usao/co/news/2011/August2011/8_9_11.html.
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Committee on Homeland Security and Governmental Affairs

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92

Case Summary 40: Cheap Opioids Lead To Medicaid Fraud

• Defendant(s): David Piaquadio

• Case Year: 2015

• State: Pennsylvania

• Case Status: Authorities charged Piaquadio in 2015 in U.S. District Court in Williamsport 

with conspiracy to distribute controlled substances, possession with intent to distribute 

controlled substances, and distribution of controlled substances. He pleaded not guilty, and 

his trial is scheduled for January, 2018.

• Description of Scheme: Piaquadio allegedly obtained opioids through prescriptions for 

himself and others, defrauding Medicaid in the process.

• Key Facts:

o Court documents show Piaquadio obtained more than 5,000 oxycodone and Percocet 

tablets and more than 180 fentanyl patches with a doctor’s prescription from 

pharmacies in Pennsylvania.

o Prosecutors accuse Piaquadio of submitting claims to Medicaid for the drugs.

o Piaquadio also allegedly obtained oxycodone and Percocet tablets and fentanyl 

patches from other people who had prescriptions for the drugs and were eligible for 

Medicaid and Medicare.

Sources: 

1. Indictment, United States v. Piaquadio, No. 4:15-cr-00249-CCC (M.D. Penn. Oct. 22, 

2015).

2. Press Release, U.S. Att’y Off., M.D. Penn, Potter County Man Indicted for Distribution 

of Prescription Opiates and Heroin (Oct. 22, 2015), https://www.justice.gov/usaomdpa/pr/potter-county-man-indicted-distribution-prescription-opiates-and-heroin.
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Committee on Homeland Security and Governmental Affairs

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93

Case Summary 41: Pain-Relief Creams and Medicaid Fraud 

• Defendant(s): Dr. Elena Lev Polukhin, Boris Leo Rabichev, and Richard Wayne Custer.

• Case Year: 2016

• State: Minnesota

• Case Status: Dr. Polukhin pleaded guilty in 2016 in U.S. District Court in St. Paul to 

soliciting and receiving kickbacks. A judge sentenced her to 18 months in prison and 

ordered her to pay $421,329 in restitution. Rabichev pleaded guilty in 2015 to conspiracy and 

received a sentence of 18 months in prison. Custer pleaded guilty in 2015 to conspiracy and 

was sentenced to four years of probation. 

• Description of Scheme: Dr. Polukhin conspired with a pharmacy manager and a pharmacist 

to defraud Medicaid and Medicare for topical pain-relief creams while also writing 

illegitimate prescriptions for oxycodone and morphine. 

• Key Facts:

o Dr. Polukhin specialized in pain management and rehabilitation, and the vast majority 

of her patients were Medicaid or Medicare beneficiaries.

o From February 2011 through December 2014, Dr. Polukhin arranged with Best Aid 

Pharmacy to fill prescriptions written by her for topical pain-relief creams containing 

pain relievers and other drugs. 

o Dr. Polukhin received kickbacks from Best Aid in the form of payments to a 

charitable trust she controlled.

Sources:

1. Allie Johnson, Charges: Minn. Doctor Collected $40k Writing Fake Pain Cream 

Prescriptions, Fox 9, Sept. 23, 2015, http://www.fox9.com/news/bloomington-minndoctor-indicted-for-writing-false-prescriptions-in-exchange-for-money.

2. Press Release, FBI, Bloomington Pain Management Doctor Indicted for Accepting 

Kickbacks as Part of Large-Scale Health Care Fraud Scheme (Sept. 23, 2015), 

https://www.fbi.gov/contact-us/field-offices/minneapolis/news/pressreleases/bloomington-pain-management-doctor-indicted-for-accepting-kickbacks-aspart-of-large-scale-health-care-fraud-scheme.
Majority Staff Report

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3. Jon Tevlin, Sometimes Trusted Professionals Fuel Opioid Epidemic, Star Tribune, 

June 7, 2016, http://www.startribune.com/tevlin-sometimes-trusted-professionalsfuel-opioid-epidemic/382173071/.
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Case Summary 42: “We Will Not Allow Medicaid To Pay For Drugs That Were Illegally 

Obtained”

• Defendant(s): Linda Masse

• Case Year: 2015

• State: New York

• Case Status: Masse pleaded guilty in 2015 in Schenectady County Court to criminal 

possession of a forged instrument. A judge sentenced her to felony drug court. 

• Description of Scheme: Masse admitted to forging her employer’s signature to obtain 

hydrocodone and oxycodone from pharmacies, drugs that were paid for by Medicaid. 

• Key Facts:

o Masse, who worked for a physician specializing in Obstetrics and Gynecology, used 

18 forged prescriptions from her employer’s practice to get narcotics from 

pharmacies at Walmart and CVS.

o During the scheme, Masse obtained more than 2,000 hydrocodone and oxycodone 

pills.

o New York Attorney General Eric T. Schneiderman said after announcing the guilty 

plea: “Forgery and Medicaid fraud are blatant abuse of the trust and privileges 

afforded to medical professionals . . . . Above all, we will not allow Medicaid to pay 

for drugs that were illegally obtained.”

Sources:

1. Press Release, Eric T. Schneiderman, N.Y. Att’y Gen., A.G. Schneiderman Announces 

Guilty Plea of Capital Region Nurse for Illegally Obtaining More Than 2,000 Narcotics 

Using Forged Prescriptions (Sept. 10, 2015), https://ag.ny.gov/press-release/agschneiderman-announces-guilty-plea-capital-region-nurse-illegally-obtaining-more.

2. Latham Nurse Admits to Forging Painkiller Prescriptions, Times Union, Sept. 10, 2015, 

http://www.timesunion.co ag.ny.govm/local/article/Latham-nurse-admits-to-forgingpainkiller-6496766.php.
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Case Summary 43: Forging Prescriptions to Get Medicaid-Funded Oxycodone

• Defendant(s): Michael James Lott

• Case Year: 2015

• State: Idaho

• Case Status: Lott pleaded guilty in 2015 in U.S. District Court in Boise to acquiring and 

obtaining a controlled substance by misrepresentation, fraud, and deception and false 

statement relating to health care matters. A judge sentenced him to three years of probation.

• Description of Scheme: Lott used forged prescriptions to obtain Medicaid-funded 

oxycodone.

• Key Facts:

o Lott admitted that he began altering his legitimate prescriptions to fill the 

prescriptions ahead of schedule. Eventually, Lott began forging new prescriptions 

altogether.

o In April 2014, Lott filled a fraudulent oxycodone prescription and submitted it to 

Medicaid for payment.

o The Drug Enforcement Administration investigated the case, along with the 

Department of Health and Human Services Office of Inspector General and state and 

local law-enforcement officials.

Sources:

1. Press Release, U.S. Att’y Off., Idaho, California Man Pleads Guilty to Obtaining a 

Controlled Substance by Fraud and Billing Medicaid for a Fraudulent Prescription (June 

3, 2015), https://www.justice.gov/usao-id/pr/california-man-pleads-guilty-obtainingcontrolled-substance-fraud-and-billing-medicaid-0.
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Case Summary 44: Gym Owner Sells Oxy, Bills Medicaid 

• Defendant(s): Scott Rabine

• Case Year: 2015

• State: New York

• Case Status: Rabine pleaded guilty in 2015 in Warren County Court to criminal sale of a 

controlled substance and grand larceny. The court sentenced him to 10 years in prison. 

• Description of Scheme: Rabine sold prescription painkillers outside a gym he owned and 

fraudulently pocketed more than $4,600 in Medicaid benefits.

• Key Facts : 

o Rabine’s gym, Spartan Fitness, was popular with local high school students and 

athletes.

o Rabine sold undercover police officers Medicaid-funded oxycodone pills at least four 

times outside of the facility. One of the sales was for 134 pills, and all of them were 

captured on video and audio.

o At sentencing, Rabine’s lawyer argued that he had sold “relatively small amounts” of 

painkillers that were legitimate medications, not “drugs that destroy lives” like heroin 

or crack cocaine. Prosecutors rejected that characterization.

Sources:

1. Don Lehman, Glens Falls Gym Owner Arrested in Drug, Steroid Case, The Post Star, 

July 17, 2014, http://poststar.com/news/local/glens-falls-gym-owner-arrested-in-drugsteroid-case/article_57b34fb0-0df2-11e4-b8dc-0019bb2963f4.html.

2. Don Lehman, Former Gym Owner Pleads Guilty to Drug, Fraud Charges, The Post Star, 

Feb. 20, 2015, http://poststar.com/news/local/former-gym-owner-pleads-guilty-to-drugfraud-charges/article_19e16b44-b94c-11e4-96ca-3b5bda3625d2.html.

3. Don Lehman, Former Gym Owner Gets 10-Year Sentence for Drug Sales, Welfare 

Fraud, The Post Star, Apr. 24, 2015, http://poststar.com/news/local/former-gym-ownergets--year-sentence-for-drug-sales/article_b8a71144-d46a-54f1-a292-

cb2bcc1113da.html.
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Case Summary 45: A Stash Of $1 Million Cash

• Defendant(s): Dr. Hussein “Sam” Awada

• Case Year: 2015

• State: Michigan

• Case Status: In February 2015, Dr. Awada pleaded guilty in U.S. District Court in Detroit to 

writing prescriptions for controlled medications without medical justification and to health 

care fraud. The judge sentenced him to seven years in prison, and Dr. Awada agreed to 

forfeit seized assets to repay the government $2.3 million. 

• Description of Scheme: Dr. Awada worked with co-conspirators to recruit patients with 

Medicaid, Medicare, and private insurance coverage, prescribing them opioids and billing for 

unnecessary medical procedures and tests that were never performed. Co-conspirators then 

bought the pills back from the “patients” and resold them to street drug dealers. 

• Key Facts: 

o From 2010 through 2012, Dr. Awada wrote fraudulent prescriptions for 80,000 doses 

of oxycodone and Roxicodone. 

o Dr. Awada admitted to defrauding Medicaid, Medicare, and Blue Cross Blue Shield 

out of about $2.3 million.

o Prosecutors alleged that Dr. Awada stashed $1 million cash in his house and sent 

some of his illicit profits to Lebanon.

Sources:

1. Press Release, U.S. Att’y Off., E.D. Mich., Warren Doctor Sentenced for Unlawful 

Oxycodone Prescriptions and Health Care Fraud (Nov. 16, 2015), 

https://www.justice.gov/usao-edmi/pr/warren-doctor-sentenced-unlawful-oxycodoneprescriptions-and-health-care-fraud.

2. Press Release, DEA, Two Michigan Doctors Plead Guilty to Unlawful Distribution of 

Controlled Substance Painkillers and Health Care Fraud (Feb. 11, 2015), 

https://www.dea.gov/divisions/det/2015/det021115.shtml.

3. Press Release, U.S. Att’y Off., E.D. Mich., Detroit Area Doctors Charged with Illegal 

Distribution of Prescription Drugs and Health Care Fraud (June 21, 2013), 

https://www.justice.gov/usao-edmi/pr/detroit-area-doctors-charged-illegal-distributionprescription-drugs-and-health-care.
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4. Jennifer Chambers, Warren Physician Delays Start of Prison Term for Fraud, The 

Detroit News, Apr. 29, 2016, http://www.detroitnews.com/story/news/local/macombcounty/2016/04/29/warren-physician-fraud-sentence-delayed/83702148/.
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Case Summary 46: Kickbacks To Doctors And Middle East Bank Accounts

• Defendant(s): Waleed Yaghmour 

• Case Year: 2014

• State: Michigan

• Case Status: Yaghmour pleaded guilty in 2014 in U.S. District Court in Detroit to 

conspiracy to distribute and possess with intent to distribute controlled substances, and 

money laundering. The court sentenced him to six years in prison, and he agreed to forfeit 

nearly $1 million seized from a bank account he maintained in the Middle East. At least 40 

other people were charged in what prosecutors called a large-scale health care fraud and drug 

distribution scheme. Nearly all have been convicted.

• Description of Scheme: Yaghmour owned a pharmacy that participated in a fraud scheme in 

which owners of home health agencies gave kickbacks to doctors who prescribed medically 

unnecessary opioids and medical services, defrauding Medicaid, Medicare and private 

insurers. 

• Key Facts: 

o Yaghmour admitted to fraudulently dispensing 1,500 oxycodone, 100,000 

hydrocodone, and 100,000 alprazolam doses, knowing that the medications had no 

legitimate medical purpose. 

o Some medications billed to Medicaid, Medicare and private insurance under the 

scheme were never provided to patients. 

o Yaghmour received nearly $2 million in cash payments, nearly half of which was 

kept in the foreign bank account. 

o The Drug Enforcement Administration believes the drugs distributed in this scheme 

traveled along U.S. Route 23 into Ohio and West Virginia. 

Sources:

1. Press Release, U.S. Att’y Off., E.D. Mich., Former Pharmacist Sentenced for Role in 

Drug Distribution Scheme and Money Laundering (Feb. 6, 2015), 

https://www.justice.gov/usao-edmi/pr/former-pharmacist-sentenced-rolein-drugdistribution-scheme-and-money-laundering.

2. Press Release, DEA, Forty-Four Michigan and Ohio Residents Indicted in Scheme to 

Illegally Divert and Distribute Rx Drugs Along “US-23 Pipeline” (Mar. 20, 2013), 

https://www.dea.gov/divisions/det/2013/det032113.shtml.
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Case Summary 47:The Largest Drug Dealer In A Small Town

• Defendant(s): Dr. Lafayette Twyner

• Case Year: 2014

• State: Iowa

• Case Status: Dr. Twyner pleaded guilty in 2014 in U.S. District Court in Des Moines to 

illegally dispensing hydrocodone resulting in death, and health care fraud. A federal judge 

sentenced him to five years in prison.

• Description of Scheme: Dr. Twyner prescribed pain medications to patients with no 

legitimate medical need, including self-admitted addicts. In exchange for the illegitimate 

prescriptions, he billed the patients’ insurance, including Medicaid and Medicare, for office 

visits where they sought drugs. 

• Key Facts: 

o Prosecutors alleged that Dr. Twyner prescribed 920 hydrocodone pills to a single 

patient in just two months.

o Dr. Twyner continued to prescribe pain medication to patients who showed signs of 

abuse. For example, Dr. Twyner proscribed hydrocodone for an undercover police 

officer who said he no longer needed the medication but he liked how it made him 

feel.

o In calling for Dr. Twyner to serve prison time, prosecutors described him as “the 

largest drug dealer” in the small town of Newton, Iowa. “He was neither naïve nor 

inexperienced,’’ prosecutors wrote. “He knew exactly what he was doing and its 

impact on the lives of those he was supposed to be helping.” 

Sources:

1. Press Release, U.S. Att’y Off., S.D. Iowa, Former Newton Doctor Sentenced to 5 Years 

in Prison for Prescribing Controlled Substances Outside the Course of Usual Medical 

Practice and Related Health Care Fraud (May 30, 2014), https://www.justice.gov/usaosdia/pr/former-newton-doctor-sentenced-5-years-prison-prescribing-controlledsubstances-outside.

2. Press Release, FBI, Former Newton Doctor Indicted for Prescribing Controlled 

Substances Outside the Course of Usual Medical Practice and Related Health Care Fraud 

(Nov. 5, 2012), https://archives.fbi.gov/archives/omaha/press-releases/2012/formernewton-doctor-indicted-for-prescribing-controlled-substances-outside-the-course-ofusual-medical-practice-and-related-health-care-fraud.
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3. Tony Leys, 5-Year Sentence for Ex-Newton Doctor in Painkiller Case, Des Moines Reg., 

May 29, 2014, https://www.desmoinesregister.com/story/news/crime-andcourts/2014/05/29/ex-newton-doctor-twyner-gets-5-year-sentence-in-painkillercase/9738041/.
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Case Summary 48: Pill Mill In The Land Of Lincoln

• Defendant(s): Dr. Viwathna Bhuthimethee

• Case Year: 2014

• State: Illinois

• Case Status: Dr. Bhuthimethee pleaded guilty in 2014 in U.S. District Court in Springfield 

to health care fraud and illegal distribution of a controlled substance. The judge sentenced 

him to one year in prison. 

• Description of Scheme: Dr. Bhuthimethee defrauded Medicaid at the walk-in clinic he 

owned by prescribing opioid pain medications to patients with no medical need for the drugs. 

• Key Facts: 

o Dr. Bhuthimethee prescribed hydrocodone and Xanax with no legitimate medical 

purposes, including to some patients who had already failed drug tests and overdosed 

on the medication. 

o For example, authorities said, the doctor prescribed more than 2,000 illicit painkiller 

or anti-anxiety pills to four women over a two-year period.

o Stephen R. Wigginton, then-U.S. attorney in Iowa, said Dr. Bhuthimethee “did not 

operate a legitimate medical practice, but instead was engaged in a scheme to 

distribute controlled substances illegally, thereby defrauding Health Care Benefit 

Programs, namely, Illinois Medicaid, by running what was in essence a prescription 

service for drug addicts, commonly known as a ‘Pill Mill.’” 

o “As I have long noted,” Wigginton added, “whether you are a doctor, a lawyer, a 

pharmacist, or an accountant, you cannot hide behind a license and a diploma.”

Sources:

1. Press Release, U.S. Att’y Off., S.D. Ill., Alton Doctor Sentenced On Charges of Health 

Care Fraud and Illegal Dispensation of Controlled Substances (Apr. 3, 2014), 

https://www.justice.gov/usao-sdil/pr/alton-doctor-sentenced-charges-health-care-fraudand-illegal-dispensation-controlled.

2. Press Release, FBI, Alton Doctor Pleads Guilty to Health Care Fraud and Illegal 

Dispensation of Controlled Substances (Feb. 14, 2014), 

https://archives.fbi.gov/archives/springfield/press-releases/2014/alton-doctor-pleadsguilty-to-health-care-fraud-and-illegal-dispensation-of-controlled-substances.

3. Press Release, U.S. Att’y Gen., S.D. Ill., Alton Doctor Pleads Guilty to Health Care 

Fraud and Illegal Dispensation of Controlled Substances (Feb. 14, 2014), 
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https://www.justice.gov/usao-sdil/pr/alton-doctor-pleads-guilty-health-care-fraud-andillegal-dispensation-controlled.

4. The Associated Press, Alton Doctor Sentenced in ‘Pill Mill’ Case, The St. J. Reg., Apr. 4, 

2014, http://www.sj-r.com/article/20140404/NEWS/140409670.
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Case Summary 49: A Few Hydrocodone Pills at Taxpayer Expense 

• Defendant(s): Shawna Russell Smith

• Case Year: 2014

• State: Mississippi

• Case Status: The state attorney general’s Medicaid Fraud Control Unit charged Smith in 

Union County with Medicaid fraud and illegally obtaining a controlled substance. 

• Description of Scheme: Smith, a registered nurse, allegedly took hydrocodone from patients, 

defrauding Medicaid in the process.

• Key Facts:

o According to the indictment, Smith worked as a nurse at a care center in New Albany, 

Mississippi.

o Authorities allege Smith misappropriated for her own use one tablet of hydrocodone 

that had been prescribed for a patient. Smith allegedly filed a claim for 

reimbursement with the Mississippi Division of Medicaid.

o Smith also allegedly obtained hydrocodone from two other patients and converting 

them to her own use.

o Even though it involved a small amount of opioids, the case shows that the 

connection between Medicaid and opioids can extend from major pill mills to 

minimal drug diversions, all at taxpayer expense.

Sources:

1. Press Release, Jim Hood, Miss. Att’y Gen., New Albany Nurse Arrested for Medicaid 

Fraud and Illegally Obtaining a Controlled Substance (Apr. 30, 2014), 

http://www.ago.state.ms.us/releases/new-albany-nurse-arrested-for-medicaid-fraud-andillegally-obtaining-a-controlled-substance/.

2. Lynn West, ‘Operation Fish Net’ Hauls in 46, Chickasaw Journal, May 10, 2014, 

http://www.djournal.com/chickasaw/news/operation-fish-net-hauls-in/article_7dd7e75dac88-5a98-b1d6-59305d0a9001.html.
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Case Summary 50: Five Doctors for Opioids 

• Defendant(s): Kari Ann Monroe

• Case Year: 2014

• State: North Carolina

• Case Status: Sheriff’s deputies arrested Monroe in Moore County in 2014 on multiple 

charges including Medicaid fraud, obtaining a controlled substance by withholding 

information from a health care provider, and trafficking opium. 

• Description of Scheme: Monroe allegedly visited five different doctors to obtain 

prescriptions for opioids, a practice commonly known as “doctor shopping.”

• Key Facts: 

o Monroe received prescriptions for a range of opioids, including Oxycodone, 

Oxymorphone, Opana, and Suboxone. 

o Authorities charged Monroe with seeing the five doctors between January 2013 and 

December 2013.

Sources:

1. Carthage Woman Faces Drug Charges, The Pilot, Jan. 3, 2014.
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Case Summary 51: From Pain Pills to Pakistan

• Defendant(s): Dr. Syed Jawad Akhtar-Zaidi

• Case Year: 2014

• State: Ohio

• Case Status: In August 2014, a federal grand jury in the U.S. District Court in Cleveland 

indicted Dr. Zaidi on charges of health care fraud, money laundering, conspiracy to distribute 

controlled substances, and distribution of controlled substances. Later that year, Dr. Zaidi 

missed his arraignment and is now a fugitive believed to be living in Pakistan. 

• Description of Scheme: Dr. Zaidi ran a pain management clinic where he allegedly 

enriched himself, prescribing large amounts of illicit opioids and fraudulently billing 

Medicaid and other insurers for office visits with no medical purpose. 

• Key Facts: 

o Prosecutors accused Dr. Zaidi of prescribing thousands of doses of OxyContin, 

Percocet, vicodin, and morphine to patients without adequately verifying their 

identity or medical history or performing a complete medical examination. 

o With no legitimate medical need for the opioids, Dr. Zaidi then allegedly billed 

Medicaid, Medicare, and private insurers for office visits that should have been used 

to help diagnose patients. 

o Dr. Zaidi reportedly instructed staff not to report patients they suspected of “drug 

seeking” or “doctor shopping” to law enforcement. 

o The Department of Justice sought to seize more than $4.8 million in accounts 

controlled by Dr. Zaidi, along with 139 pieces of jewelry worth more than $90,000. 

In 2016, a federal appeals court upheld a judge’s order of forfeiture of the seized 

assets.

Sources: 

1. Press Release, U.S. Att’y Off., N.D. Ohio, Solon Doctor Indicted for Health Care Fraud 

and Illegally Distributing Prescription Painkillers (Aug. 28, 2014), 

https://www.justice.gov/usao-ndoh/pr/solon-doctor-indicted-health-care-fraud-andillegally-distributing-prescription.

2. United States v. Akhtar-Zaidi, Nos. 15-3909/15-4090 (6th Cir. 2016).
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Case Summary 52: Medicaid-funded Opioids in her Children’s Names 

• Defendant(s): Felicia L. Prysock

• Case Year: 2017

• State: South Carolina

• Case Status: Prysock pleaded guilty in November 2017 in U.S. District Court in Columbia 

to aggravated identify theft and possession of a controlled substance by forgery. She is 

scheduled to be sentenced in February 2018. 

• Description of Scheme: Prysock filled forged opioid prescriptions in the names of her 

children and used Medicaid to pay for them.

• Key Facts: 

o According to court documents, Prysock filled 10 fraudulent prescriptions in her 

children’s names between July 2016 and April 2017. Medicaid paid for the drugs.

o Prosecutors say the medications included oxycodone, hydrocodone, and Adderall.

o U.S. Attorney Beth Drake stated that the Department of Justice “continues to 

vigorously prosecute those who deal prescription drugs to our most vulnerable 

citizens, many of whom suffer from debilitating addictions.” 

Sources: 

1. Press Release, U.S. Att’y Off., S.C., Wellford Woman Indicted for Forged Prescriptions 

(Sept. 20, 2017), https://www.justice.gov/usao-sc/pr/wellford-woman-indicted-forgedprescriptions.

2. Grand Jury Indictment, United States v. Prysock, No. 3:17-cr-00860-TLW (S.C.D.C. 

Sept. 20, 2017).
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Case Summary 53: Prosecutors: Doctor and Pharmacists Defrauded Medicaid

• Defendant(s): Dr. James E. Ranochak, Brent A. Losier, and Charles Ringger

• Case Year: 2017

• State: Indiana

• Case Status: A federal grand jury in Hammond indicted Dr. Ranochak, Losier and Ringger 

in June 2017 on charges of conspiracy to illegally dispense and distribute controlled 

substances, distributing a controlled substance, and conspiracy to commit health care fraud. 

All have pleaded not guilty, and their trial is scheduled for June 2018.

• Description of Scheme: Prosecutors allege that the three conspired to defraud the Indiana 

Medicaid program by submitting thousands of dollars in fraudulent claims for medically 

unnecessary opioids and for controlled substances dispensed to patients who had not been 

seen by a doctor.

• Key Facts: 

o Dr. Ranochak stands accused of working with Losier, a pharmacy owner, and 

Ringger, a pharmacist, to prescribe hydrocodone and methadone, along with 

testosterone, to patients without medical need for the drugs. Many of these 

prescriptions were billed to Medicaid.

o To increase the amount Losier’s pharmacy could bill Medicaid per patient, Dr. 

Ranochak allegedly prescribed non-controlled medications to patients. The trio then 

allegedly required patients to fill these prescriptions before they could obtain their 

pain medications, which are controlled substances.

o Prosecutors alleged that Losier dispensed medication to patients using pre-signed 

prescriptions when Dr. Ranochak was on vacation. 

o Dr. Ranochak reportedly told patients he would charge more for office visits if they 

came back for refills on pain medicine before their prescriptions ended. 

Sources:

1. Press Release, U.S. Att’y Off., N.D. Ind., Three Arrested in the Fort Wayne Area as Part 

of the National Health Care Fraud Takedown (July 13, 2017), 

https://www.justice.gov/usao-ndin/pr/three-arrested-fort-wayne-area-part-national-healthcare-fraud-takedown.

2. Indictment, United States v. Ranochak, No. 2:17-cr-00073-JVB-APR (N.D. Ind. June 22, 

2017).
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3. Press Release, Curtis Hill, Ind. Att’y Gen., Attorney General Hill and Staff Contribute to 

Largest Healthcare Fraud Takedown in U.S. History (July 13, 2017).
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Case Summary 54: Stolen Prescription Pad Sends Opioids to the Street 

• Defendant(s): Jennifer Bicego, Luke Gutkowski, Dustin Fritz, Trisha Burkett, Jona Lafferty, 

Lance Roe, Charles Loveall, Brandon Madden, Andrew Pell, and Rachel Vito

• Case Year: 2017

• State: Michigan

• Case Status: Prosecutors charged all 10 individuals in East Lansing 54B District Court in 

January 2017 on counts related to Medicaid fraud and obtaining controlled substances by 

fraud. 

• Description of Scheme: Prosecutors allege that the defendants used a stolen prescription pad 

to defraud Medicaid and sell opioids on the street. 

• Key Facts:

o The felony criminal complaint says the scheme originated with Bicego, who 

unlawfully obtained a prescription pad from a doctor’s office where she had worked. 

The pad was then used to forge prescriptions for OxyContin, Norco, Percocet and 

Adderall. 

o Co-conspirators allegedly filled the fraudulent prescriptions—some of which were 

billed to Medicaid—at several pharmacies, then sold the pills for cash or traded them 

for other drugs.

o “When misused, prescription drugs can be every bit as dangerous as street drugs,” 

Michigan Attorney General Bill Schuette said in announcing the charges.

Sources:

1. Matt Mencarini, 10 Charged in Lansing Area Prescription Drug Ring, Detroit Free Press, 

Jan. 11, 2017, https://www.freep.com/story/news/local/michigan/2017/01/11/lansingprescription-drug-ring/96473648/.

2. Press Release, Bill Shuette, Mich. Att’y Gen., Schuette Charges 10 in Lansing-Area 

Opioid Drug Ring, http://www.michigan.gov/ag/0,4534,7-359-82916_81983_47203-

401906--m_2017_1,00.html.
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Case Summary 55: “We are not going to tolerate drug dealers in white coats” 

• Defendant(s): Dr. Craig Gialanella and 16 co-defendants

• Case Year: 2017

• State: New Jersey

• Case Status: In July 2017, the New Jersey Attorney General’s office charged Dr. Gialanella 

with distribution of narcotics and his co-defendants with related drug counts. 

• Description of Scheme: Prosecutors say Dr. Gialanella worked with a network of alleged 

drug dealers to write fraudulent prescriptions for opioids and sell some of the drugs on the 

street, defrauding Medicaid and private insurers.

• Key Facts: 

o Prosecutors alleged that in 2016, Dr. Gialanella wrote 413 prescriptions in the names 

of 30 individuals for approximately 50,000 30-milligram oxycodone tablets. 

Prosecutors said the drug ring sold those tablets, known as “Blues,’’ for between $18 

and $25 per pill.

o Dr. Gialanella allegedly charged those looking for prescriptions for office visits that 

did not involve a medical examination or treatment. Medicaid paid for some of the 

visits

o Some of these “patients” travelled more than 100 miles to see Dr. Gialanella, a 

primary care physician. 

o “We are not going to tolerate drug dealers in white coats,” New Jersey Attorney 

General Christopher S. Porrino said as his office announced the charges.

Sources:

1. Press Release, Christopher S. Porrino, N.J. Att’y Gen., Attorney General Charges Essex 

County Doctor and 16 Alleged Drug Dealers in Atlantic County with Distributing Tens 

of Thousands of High-Dose Opioid Pain Pills Using False Prescriptions Issued by Doctor 

(July 19, 2017), http://nj.gov/oag/newsreleases17/pr20170719a.html.

2. Lauren Carroll & Erin Serpico, Essex County Doctor, 16 Others Charged in Atlantic 

County Drug Ring, Press of Atlantic City, July 20, 2017, 

http://www.pressofatlanticcity.com/news/crime/essex-county-doctor-others-charged-inatlantic-county-drug-ring/article_999be69e-64f5-5259-9645-d25b0ab12ab1.html.

3. Michael Burke & Amy S. Rosenberg, Doctor and Ex-Lifeguard Among 18 Snared in 

Shore Drug Bust, The Inquirer (Phila.), July 19, 2017, 
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http://www.philly.com/philly/news/new_jersey/doctor-and-ex-lifeguard-among-18-

snared-in-shore-drug-bust-20170719.html.
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Case Summary 56: Illicit Opioids and Medicaid Fraud in The Bay State

• Defendant(s): Dr. Fernando Jayma

• Case Year: 2017

• State: Massachusetts

• Case Status: Dr. Jayma pleaded guilty in April 2017 in Hampden Superior Court to charges 

of illegal prescribing of controlled substances, Medicaid false claims, and larceny. A judge 

sentenced him to two-and-a-half years in jail and ordered him to permanently resign his 

medical license and pay $9,778 in restitution. 

• Description of Scheme: Dr. Jayma illegally prescribed opioids to patients and defrauded 

Medicaid. 

• Key Facts:

o Dr. Jayma wrote illicit prescriptions for opioids, including oxycodone, morphine and 

methadone, causing pharmacies to falsely bill Medicaid for the medications.

o The doctor also defrauded Medicaid by arranging for another doctor to see his 

patients while he was away and directing his staff to bill Medicaid as if Dr. Jayma 

was treating those patients. Medicaid had not credentialed the other doctor. 

o Dr. Jayma’s illicit prescriptions went to patients with no legitimate medical need for 

the drugs. Some of the patients had a documented history of substance abuse.

Sources:

1. Press Release, Maura Healey, Mass. Att’y Gen., Ludlow Doctor Sentenced to Jail for 

Illegally Prescribing Opioids to At-Risk Patients (May 16, 2017), 

http://www.mass.gov/ago/news-and-updates/press-releases/2017/2017-05-16-ludlowdoctor-sentenced.html.
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Case Summary 57: Recruiting “Runners” to Get Oxycodone Paid for by Medicaid 

• Defendant(s): Raymond Morales

• Case Year: 2016

• State: Connecticut

• Case Status: Morales pleaded guilty in June 2016 in U.S. District Court in Hartford to 

conspiracy to distribute and possess with intent to distribute oxycodone. A judge sentenced 

him to seven years in prison. Prosecutors charged ten other people in the investigation.

• Description of Scheme: Morales recruited “runners” to fill fraudulent prescriptions for a 

drug ring that distributed oxycodone in the New Haven area. Medicaid paid for nearly all of 

the illicit prescriptions.

• Key Facts:

o Investigators discovered that Morales had a close associate who worked as a 

pharmacy technician and helped him to fill the fake prescriptions.

o The drug ring stole the personal identifying information of more than 50 doctors and 

other medical professionals to obtain the oxycodone, which it then sold on the street 

for $20 to $30 per 30-milligram pill.

Sources:

1. Press Release, U.S. Att’y Off., Conn., New Haven Man Pleads Guilty to Role in Scheme 

to Obtain Oxycodone Through Fraudulent Prescriptions (June 16, 2016), 

https://www.justice.gov/usao-ct/pr/new-haven-man-pleads-guilty-role-scheme-obtainoxycodone-through-fraudulent-prescriptions.

2. Press Release, U.S. Att’y Off., Conn., New Haven Man Sentenced to 7 Years in Prison 

for Role in Fraudulent Oxycodone Prescription Scheme (Nov. 28, 2016), 

https://www.justice.gov/usao-ct/pr/new-haven-man-sentenced-7-years-prison-rolefraudulent-oxycodone-prescription-scheme.

3. Frank Juliano, Man Sentenced in Area Drug Trafficking Case, Conn. Post, Nov. 29, 2016, 

http://www.ctpost.com/local/article/Man-sentenced-in-area-drug-trafficking-case10641928.php.
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Case Summary 58: Nurse Accused of Grabbing Norco From Hospital Patient 

• Defendant(s): Timothy Jones

• Case Year: 2016

• State: Mississippi

• Case Status: A Lauderdale County grand jury indicted Jones in August 2016 on charges of 

Medicaid fraud and acquiring or obtaining possession of a controlled substance by fraud, 

misrepresentation, or subterfuge.

• Description of Scheme: Jones allegedly defrauded Medicaid by obtaining opioids belonging 

to a nursing home patient.

• Key Facts: 

o Jones worked as a registered nurse at East Mississippi State Hospital in Meridian.

o According to the indictment, Jones obtained Norco containing hydrocodone from a 

patient at the hospital. The patient was receiving Medicaid benefits from the state.

Sources:

1. Press Release, Jim Hood, Miss. Att’y Gen., Meridian Registered Nurse Arrested for 

Medicaid Fraud Charges (Aug. 19, 2016), http://www.ago.state.ms.us/releases/meridianregistered-nurse-arrested-for-medicaid-fraud-charges/.

2. Meridian Nurse Arrested for Medicaid Fraud, WTOK, Aug. 19, 2016, 

http://www.wtok.com/content/news/Meridian-nurse-arrested-for-Medicaid-fraud390729391.html.
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117

Case Summary 59: Nurse Grabs Percocet, Hydrocodone Intended for Patients

• Defendant(s): Cheryl Renee Hamblet

• Case Year: 2016

• State: Mississippi

• Case Status: Hamblet pleaded guilty in June 2016 in Choctaw County Circuit Court to 

Medicaid fraud and obtaining a controlled substance by fraud. A circuit court judge 

sentenced her to three years in prison, with two years suspended.

• Description of Scheme: Hamblet used opioids intended for patients at a nursing home, 

defrauding Medicaid. 

• Key Facts:

o Hamblet worked as a Licensed Practical Nurse at a Mississippi nursing home.

o With access to controlled substances at the facility, she diverted for her own use 

Percocet and hydrocodone meant to be dispensed to three patients.

o Though the investigation involved a small amount of opioids, Mississippi Attorney 

General Jim Hood affirmed the importance of the case, which his Medicaid Fraud 

Control Unit prosecuted. “Our office is deeply committed to protecting our state’s 

most vulnerable residents,” Hood said as the judge sentenced Hamblet.

Sources:

1. Press Release, Jim Hood, Miss. Att’y Gen. Houston Nurse Sentenced to Prison for 

Medicaid Fraud, Illegally Obtaining Patient’s Drugs (June 21, 2016),

http://www.ago.state.ms.us/releases/houston-nurse-sentenced-to-prison-for-medicaidfraud-illegally-obtaining-patients-drugs/.

2. Woman Sentenced for Medicaid Fraud, Insurance Fraud News, June 21, 2016, 

http://www.insurancefraud.org/IFNS-detail.htm?key=22962.
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118

Case Summary 60: Fake Prescription in North Carolina 

• Defendant(s): Shatiaa Neshate McNair

• Case Year: 2016

• State: North Carolina

• Case Status: Sheriff’s deputies arrested McNair in July 2016 on charges of Medicaid 

recipient fraud; obtaining a controlled substance by fraud/forgery; felony possession of a 

controlled substance; trafficking opiates, and identity theft.

• Description of Scheme: Ms. McNair allegedly used a fraudulent prescription to obtain 

oxycodone from a pharmacy, defrauding Medicaid.

• Key Facts:

o According to the Moore County Sheriff’s Office, McNair filled the fake prescription 

at a Moore County-area pharmacy.

o McNair allegedly obtained 120 dosage units of oxycodone with the illicit 

prescription.

Sources:

1. Moore County Sheriff Neil Godfrey Announced the Arrest of Shatiaa Neshate McNair, 

Age 21, of Lumberton, North Carolina on Drug Charges, Everbridge Nixle, July 22, 

2016, http://www.nixle.us/alert/5687694/.

2. NC Woman Arrested After Using Fake Prescription to get Oxycodone, Insurance Fraud 

News, July 22, 2016, http://www.insurancefraud.org/IFNS-detail.htm?key=23240. 
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Case Summary 61: Prosecutors: Pharmacist Submitted Hundreds of Falsified Claims, 

Defrauded Medicaid 

• Defendant(s): Joseph “Jess” Collins

• Case Year: 2016

• State: Tennessee

• Case Status: A Claiborne County grand jury indicted Collins in October 2016 on charges of 

TennCare fraud, insurance fraud, and computer crimes. 

• Description of Scheme: Collins, a pharmacist, allegedly submitted fraudulent claims for 

prescriptions medications to TennCare (Tennessee’s Medicaid program) and Medicare.

• Key Facts: 

o Prosecutors allege that Collins presented for payment hundreds of falsified claims for 

opioids and other drugs he claimed to have dispensed. Oxycodone and Rebif—an 

injectable drug used to treat multiple sclerosis—were among the medications.

o Tennessee Bureau of Investigation agents with the state’s Medicaid Fraud Control 

Unit led the investigation, along with the Department of Health and Human Services 

Office of Inspector General.

Sources:

1. East Tennessee Pharmacist Indicted on Healthcare Fraud Charges, Channel 10 News, 

Nov. 8, 2016, http://www.wbir.com/article/news/crime/east-tennessee-pharmacistindicted-on-healthcare-fraud-charges/349865888.
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Case Summary 62: “Medicare and Medicaid Are Not a Means to Line the Pockets of 

Fraudsters.”

• Defendant(s): Beth Palin and Joseph D. Webb

• Case Year: 2016

• State: Virginia 

• Case Status: A judge in U.S. District Court in Abingdon convicted Palin and Webb in April 

2016 of conspiracy to commit health care fraud and health care fraud. The judge sentenced 

them to 36 months each in prison and ordered them to pay $1.4 million in restitution.

• Description of Scheme: Palin and Webb owned a laboratory. They worked with a doctor 

from a self-described suboxone clinic to bill patients for medically unnecessary urine 

screenings, defrauding Medicaid, Medicare and private insurers out of more than $14 

million. 

• Key Facts:

o Webb and Palin owned Bristol Labs, which specialized in urine drug screen testing. 

They worked with a doctor who opened what prosecutor said “purported to be” a 

substance abuse treatment program that treated opioid addicts with suboxone.

o The doctor sent all patients to Bristol Labs for drug screenings that were medically 

unnecessary and not used in patient care. Medicaid programs in Virginia and 

Tennessee paid for many of these screenings, along with Medicare and private 

insurers,

o Webb and Palin then opened their own addiction practice, which also billed Medicaid 

and other forms of insurance for medically unnecessary drug screenings.

o After the judge sentenced Webb and Palin, John P. Fishwick Jr., then-U.S. attorney, 

said the defendants “stole over a million dollars from health care programs designed 

to provide care to those who need the most help. Medicare and Medicaid are not a 

means to line the pockets of fraudsters.”

Sources:

1. Press Release, U.S. Att’y Off., W.D. Va., Pair Sentenced on Health Care Fraud, 

Conspiracy Charges (Aug. 16, 2016), https://www.justice.gov/usao-wdva/pr/pairsentenced-health-care-fraud-conspiracy-charges.
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121

Case Summary 63: A Doctor Who Prescribed Excessive Opioids, Defrauded Medicaid and 

Had an Offshore Bank Account 

• Defendant(s): Dr. Nicola Tauraso

• Case Year: 2016

• State: Maryland

• Case Status: Dr. Tauraso pleaded guilty in June 2016 in U.S. District Court in Baltimore to 

health care fraud. He died before he could be sentenced. 

• Description of Scheme: Dr. Tauraso saw an excessive number of patients at his pain 

management clinic and prescribed opioids for no legitimate medical reason, defrauding 

Medicaid and Medicare out of $350,000. 

• Key Facts: 

o Dr. Tauraso, a longtime pediatrician, opened a pain management practice in 2009.

o Former employees told investigators that about 80 patients a day visited Dr. 

Tauraso’s new practice. He prescribed many of them large amounts of oxycodone 

and OxyContin, often without meeting with the patients,

o In 2010 alone, Dr. Tauraso deposited more than $821,000 in his bank accounts and 

transferred about $575,000 of that to a bank in Panama. The same year, some 

pharmacists stopped filling his prescriptions out of concern that they were not 

medically necessary.

Sources:

1. Press Release, U.S. Att’y Off., Md., Frederick Pediatrician Whose License was Revoked 

Admits to Prescribing Oxycodone Without a Medical Need (June 8, 2016), 

https://www.justice.gov/usao-md/pr/frederick-pediatrician-whose-license-was-revokedadmits-prescribing-oxycodone-without.

2. Kelsi Loos, Longtime Frederick Doctor Found Guilty of Health Care Fraud Dies, The 

Frederick News-Post, Aug. 8, 2016, 

https://www.fredericknewspost.com/news/crime_and_justice/longtime-frederick-doctorfound-guilty-of-health-care-fraud-dies/article_d6c50946-bd9c-5315-9afcd5ea5872c702.html.
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122

Case Summary 64: Doctor Keeps Giving Opioids to Patients Already Enrolled in Drug 

Treatment 

• Defendant(s): Dr. Mohammad Nassery

• Case Year: 2016

• State: Massachusetts

• Case Status: Dr. Nassery pleaded guilty in March 2016 in Barnstable Superior Court to 

making false Medicaid claims, illegal prescribing, and larceny. A judge sentenced him to 

two-and-a-half years in jail, suspended for a probationary period of five years. 

• Description of Scheme: Dr. Nassery illegally prescribed opioids to drug addicts and 

defrauded Medicaid for the medication and for office visits.

• Key Facts:

o Nassery prescribed oxycodone to patients despite their documented substance abuse, 

even after learning that some were enrolled in treatment programs or were receiving 

opioids from other providers.

o Pharmacies unknowingly billed MassHealth, the state’s Medicaid program, for the 

medication he prescribed. Dr. Nassery also defrauded Medicaid by billing for simple 

office visits at a higher billing code.

o Investigators found that Dr. Nassery required urine drug screenings and Magnetic 

Resonance Imaging (MRI) tests before prescribing controlled substances as a cover 

for his illicit prescription practices.

Sources:

1. Press Release, Maura Heale, Mass. Att’y Gen., AG Healey Takes Action Against 

Hyannis Physician for Illegally Prescribing Opioids (May 18, 2015), 

http://www.mass.gov/ago/news-and-updates/press-releases/2015/2015-05-18-nasseryindictments.html.

2. Cape Cod Doctor Indicted on Drug Charges, Boston Globe, May 18, 2015, 

https://www.bostonglobe.com/metro/2015/05/18/cape-doctor-indicted-charges-illegallyprescribing-opioids/EaRKVbxhv5pDXrwIMUeUEL/story.html.

3. Haven Orecchio-Egresitz, Doctor Pleads Guilty to Illegal Prescribing, Cape Cod Times, 

Mar. 21, 2016, http://www.capecodtimes.com/news/20160321/doctor-pleads-guilty-toillegal-prescribing.
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Case Summary 65: A Doctor Known as an “Easy Write”

• Defendant(s): Dr. Steven Parry

• Case Year: 2016

• State: New York

• Case Status: Prosecutors charged Dr. Parry in February 2016 in U.S. District Court in 

Central Islip with distribution of a controlled substance without a legitimate medical purpose. 

• Description of Scheme: Dr. Parry allegedly prescribed large quantities of illicit opioids 

including to a patient who died of an overdose after Dr. Parry disregarded warnings from 

Medicaid about the prescriptions.

• Key Facts:

o According to court documents, Dr. Parry wrote prescriptions for large amounts of 

narcotics to relatively young patients, including more than one individual living in the 

same household. 

o A confidential source told investigators that Dr. Parry was known on the street as an 

“easy write”—someone who would prescribe drugs for no medical reason.

o One of Dr. Parry’s patients, identified only as “Jane Doe,” died in 2014 of a drug 

overdose after Dr. Parry gave her hundreds of controlled substance prescriptions. Dr. 

Parry had also learned that Jane Doe was selling her oxycodone and Xanax pills.

o Prosecutors allege that Dr. Parry ignored a letter from Medicaid warning him that 

Jane Doe had a history of drug abuse and rehabilitation treatment and that he 

disregarded a similar warning from Jane Doe’s mother.

Sources:

1. Deposition, United States v. Parry, No. 2:16-mj-00150-AYS (E.D.N.Y. Feb. 23, 2016).

2. Darran Simon & Laura Blasey, Dr. Steven Parry Faces Drug Charges in Patient Death, 

Newsday, Feb. 24, 2016, https://www.newsday.com/long-island/crime/dr-steven-parryfaces-drug-charges-in-patient-death-1.11506614.
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124

Case Summary 66: A Medical Clinic that Doubled as an Insurance Scam, Defrauding 

Medicaid

• Defendant(s): Dr. Rassan M. Tarabein,

• Case Year: 2017

• State: Alabama

• Case Status: Dr. Tarabein pleaded guilty in August 2017 in U.S. District Court in Mobile to 

health care fraud and unlawful distribution of a controlled substance. The court scheduled his 

sentencing for March 2018. 

• Description of Scheme: Dr. Tarabein ran a clinic that prosecutors called an insurance scam, 

defrauding Medicaid, Medicare, and private insurers out of millions of dollars for medically 

unnecessary tests, procedures, and opioid prescriptions. 

• Key Facts:

o Dr. Tarabein, a neurologist, induced patients to come to his clinic for medically 

unnecessary tests such as Magnetic Resonance Imaging (MRI) scans, spent little time 

with patients, and injected them in places where they were not experiencing pain. His 

billing records cited procedures that prosecutors said were at times anatomically 

impossible to perform.

o Dr. Tarabein singled out Medicaid patients to receive spinal injections and falsely 

billed Medicaid at higher billing codes for the procedures. From 2010 to 2016, he 

billed Medicaid more than $3.2 million for steroid injections, the highest amount any 

neurologist or pain management specialist charged Alabama’s Medicaid program 

during that period.

o Overall, Dr. Tarabein overbilled Medicaid, Medicare, and private insurers out of 

about $13.1 million, and he pocketed $5.4 million in illicit proceeds.

o Dr. Tarabein prescribed medically unnecessary oxycodone to patients, some of whom 

had track marks on their arms and hands because of drug use.

Sources:

1. Press Release, U.S. Att’y Off., S.D. Ala., Pain Management Doctor Pleads Guilty in 

Health Care Fraud Case (Aug. 31, 2017), https://www.justice.gov/usao-sdal/pr/painmanagement-doctor-pleads-guilty-health-care-fraud-case.

2. Press Release, U.S. Att’y Off., S.D. Ala., Pain Management Doctor Arrested in Health 

Care Fraud Cases (June 30, 2017), https://www.justice.gov/usao-sdal/pr/painmanagement-doctor-arrested-health-care-fraud-cases.
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3. Plea Agreement, United States v. Tarabein, No. 1:17-cr-00090-KD-MU (S.D. Ala. Aug. 

14, 2017).
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126

Case Summary 67: Doctor Shopping While Medicaid Pays

• Defendant(s): Genora Manning

• Case Year: 2015 

• State: Tennessee

• Case Status: Prosecutors in Hamilton County charged Manning in November 2015 with 

TennCare fraud. In February 2016, prosecutors in Bradley County charged Manning with 

the same crime. She pleaded guilty, and a judge sentenced her to probation. 

• Description of Scheme: Manning defrauded TennCare, the state’s Medicaid program, by 

obtaining painkillers through “doctor shopping,” or visiting multiple health care providers to 

get multiple prescriptions. 

• Key Facts: 

o Manning used her Medicaid benefits in Hamilton County to pay for medically 

unnecessary prescriptions for hydrocodone and tramadol.

o In Bradley County, Manning doctor-shopped to obtain Medicaid-funded tramadol 

prescriptions.

o As he announced Manning’s arrest in Bradley County, Tennessee Inspector General 

Manny Tyndall affirmed his office’s commitment to rooting out Medicaid fraud 

involving opioids. “Prescription drug abuse hurts individuals, families and 

communities, and we’re intent on finding and prosecuting these cases when TennCare 

is involved,” he said.

Sources:

1. Press Release, Dep’t of Fin. & Admin., Two in Hamilton Co. Charged with TennCare 

Fraud (Nov. 17, 2015), https://www.tn.gov/finance/news/2015/11/17/two-in-hamiltonco.-charged-with-tenncare-fraud.html.

2. Press Release, Dep’t of Fin. & Admin., Two People Charged with TennCare Fraud in 

Bradley, Hamilton Counties (Feb. 24, 2016), 

https://www.tn.gov/finance/news/2016/2/24/two-people-charged-with-tenncare-fraud-inbradley-hamilton-counties.html.
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Case Summary 68: A First-Time Offender Accused of Selling Her Opioids and Defrauding 

Medicaid 

• Defendant(s): Constance Young

• Case Year: 2017

• State: Tennessee

• Case Status: Young pleaded guilty in March 2017 in Criminal Court for the 9th Judicial 

District after prosecutors charged her in 2015 with TennCare fraud. A judge sentenced her to 

judicial diversion, a program in which first-time offenders can have their cases expunged 

after a period of probation.

• Description of Scheme: Young allegedly defrauded TennCare, the state’s Medicaid 

program, by obtaining prescription opioids and selling the drugs. 

• Key Facts:

o Prosecutors said Young used her TennCare benefits to obtain the prescription 

painkiller hydrocodone.

o Young then allegedly sold a portion of the hydrocodone to an undercover informant.

o “Police are clearly committed to eliminating prescription drug abuse, and we’re doing 

our part to stop abusers who are supporting this lifestyle with TennCare,” Manny 

Tyndall, the state inspector general, said as he announced the charges.

Sources:

1. Press Release, Dep’t of Fin. & Admin., Roane Co. Woman Charged with TennCare Drug 

Fraud (July 2, 2015), https://www.tn.gov/finance/news/2015/7/2/070215daniels.html.

2. Tennessee v. Young, No. 73CC1-20150-CR-86 (Tenn. Crim. Ct. May 10, 2017).
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Case Summary 69: Medicaid Recipients Get Opioids after Doctor Sees Them for Only 

Seconds 

• Defendant(s): Dr. Harvey Jenkins and five others

• Case Year: 2016

• State: Oklahoma

• Case Status: In March 2016, prosecutors charged Dr. Jenkins and five of his former 

employees in Oklahoma County District Court with making Medicaid false claims; identity 

fraud; practicing medicine without a license; and conspiracy to possess, distribute, dispense, 

and prescribe dangerous controlled substances within 2,000 feet of a public park. Dr. Jenkins 

has pleaded not guilty and has publicly contested the charges. 

• Description of Scheme: Authorities accuse Dr. Jenkins of running a “pill mill” in which he 

prescribed large quantities of opioid painkillers to patients without adequately assessing their 

medical need for the drugs, defrauding Medicaid. 

• Key Facts: 

o State prosecutors say Dr. Jenkins saw up to 90 patients a day and prescribed them 

narcotics after seeing each patient for only 15 to 30 seconds. 

o Dr. Jenkins allegedly allowed his staff members to prescribe opioid painkillers, using 

pre-signed prescription pads bearing his signature. These staff members did not have 

licenses to prescribe medication. 

o Hundreds of Dr. Jenkins’s patients were insured through Medicaid.

Sources:

1. Andrew Knittle, Jenkins Charged with 29 Felonies Connected to ‘Pill Mill,’ NewsOK, 

Mar. 24, 2016, http://newsok.com/article/5487203.

2. Abby Broyles, Accused Pill Mill Doctor and Former Employees Arrested, Charged with 

Multiple Felonies, Okla. News 4, Mar. 24, 2016, http://kfor.com/2016/03/24/accusedpill-mill-doctor-former-employees-charged-with-multiple-felonies/.

3. Crystal Price, Preliminary Hearing Begins for Oklahoma Doctor Accused of Running 

‘Pill Mill,’ KOCO News 5, Mar. 21, 2017, http://www.koco.com/article/preliminaryhearing-begins-for-oklahoma-doctor-accused-of-running-pill-mill/9161478.

4. Harvey Jenkins PhD, MD, RE: The State of Oklahoma/OBN v. Harvey C Jenkins, MD,

LINKEDIN (June 18, 2015), https://www.linkedin.com/pulse/re-state-oklahomaobn-vharvey-c-jenkins-md-harvey-jenkins-phd-md.
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129

Case Summary 70: Medicaid Benefits, Illicit Opioids, and a Mercedes-Benz 

• Defendant(s): Dannette M. Hawthorne, Charlene Breedlove-Jones, and Deneshia Wakefield

• Case Year: 2011

• State: Ohio

• Case Status: In March 2011, all three defendants pleaded guilty in U.S. District Court in 

Columbus. Hawthorne pleaded guilty to conspiracy to distribute controlled substances, 

conspiracy to commit health care fraud, submission of fraudulent claims, and aggravated 

identity theft. A judge sentenced her to 12 years in prison. Breedlove-Jones pleaded guilty 

to conspiracy to distribute controlled substances, health care false statement, obtaining 

controlled substances by fraud, attempted distribution of a controlled substance, and 

aggravated identity theft. A judge sentenced her to 10 years and 10 months in prison. 

Wakefield pleaded guilty to health care false statements and obtaining a controlled substance 

by fraud. A judge sentenced her to five years of probation.

• Description of Scheme: Hawthorne owned two pain management clinics that prosecutors 

said doubled as “pill mills,” distributing large quantities of opioids and fraudulently billing 

Medicaid for more than $29,000 in illegal prescriptions. 

• Key Facts: 

o Hawthorne opened the two clinics in Columbus in 2010 and employed BreedloveJones and Wakefield. The clinics attracted patients from Ohio, West Virginia and 

Kentucky. Many of the patients were Medicaid recipients.

o The trio charged patients cash for medical visits to obtain opioid prescriptions, which 

were then billed to Medicaid. 

o Through the clinics, which used basic equipment and employed no full time 

physicians, investigators said Hawthorne helped distribute more than 11,000 doses of 

oxycodone. 

o Hawthorne and Breedlove-Jones forged the signatures of real physicians when they 

lacked a doctor to see patients. 

o Hawthorne, a Medicaid recipient who lived in federally subsidized housing, enriched 

herself through the scheme and drove a Mercedes-Benz.

Sources: 

1. Press Release, FBI, Three Charged with Conspiracy, Making False Statements to 

Medicaid and Other Crimes in Connection with Two Columbus Pain Management 
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Clinics (Dec. 2010), https://archives.fbi.gov/archives/cincinnati/pressreleases/2010/ci122210.htm.

2. Press Release, U.S. Att’y Off., S.D. Ohio, Owner and Two Employees of Columbus Pain 

Clinics Plead Guilty to Illegally Distributing Thousands of Pain Pills (Mar. 31, 2011), 

https://www.justice.gov/archive/usao/ohs/news/03-31-11.html.

3. Kathy Lynn Gray, Woman Sentenced to 12 Years for ‘Pill Mills,’ The Columbus 

Dispatch, Feb. 7, 2012, 

http://www.dispatch.com/content/stories/local/2012/02/07/woman-gets-12-years-for-pillmills.html.
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131

Case Summary 71: Using a “Doctor Shopping” Law to Crack Down on Medicaid Abuse 

Involving Opioids 

• Defendant(s): Tyniki T. Graham 

• Case Year: 2014

• State: Tennessee

• Case Status: Graham pleaded guilty in October 2014 in the Metropolitan Nashville & 

Davidson County Criminal Court to TennCare fraud. 

• Description of Scheme: Graham obtained illicit prescriptions for opioid painkillers and 

defrauded TennCare, the state’s Medicaid program. 

• Key Facts:

o Graham visited multiple doctors in a short period of time, a practice known as “doctor 

shopping,” to obtain prescriptions for opioids.

o Through these doctor visits, Graham received illicit prescriptions for hydrocodone 

and tramadol, with Medicaid paying for her prescriptions or clinical visits.

o When prosecutors charged Graham in 2014, Robert White, then the acting Tennessee 

inspector general, said the state’s doctor shopping law “is a valuable tool in cracking 

down on people who are abusing” Medicaid through obtaining or selling opioids.

Sources:

1. Press Release, Tenn. St. Gov., Davidson Co. Woman Charged with TennCare Drug Fraud 

(June 16, 2014), https://www.tn.gov/news/2014/6/16/davidson-co.-woman-charged-withtenncare-drug-fraud8.html.

2. People v. Graham, No. 2014-B-1568 (Tenn. Crim. Ct. Oct. 2, 2014).
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Case Summary 72: “Police . . . Are Committed to Eliminating Prescription Drug Abuse, 

Especially When It Involves Public Dollars.” 

• Defendant(s): Barbara Sue Greer

• Case Year: 2014

• State: Tennessee

• Case Status: State prosecutors charged Greer in August 2014 with TennCare fraud, sale or 

delivery of oxycodone, sale or delivery of hydrocodone, and sale or delivery of Xanax. She 

is currently on probation. 

• Description of Scheme: Ms. Greer allegedly obtained Medicaid-funded opioids and sold 

them, defunding TennCare, the state’s Medicaid program. 

• Key Facts:

o Prosecutors said Greer obtained prescriptions for oxycodone, hydrocodone and Xanax 

and billed the drugs to Medicaid.

o Greer then allegedly sold a portion of the prescription drugs on three occasions.

o As prosecutors brought the charges, acting state inspector general Lawrence S. 

Saylor, Jr. said: “Local police, providers and citizens are committed to eliminating 

prescription drug abuse, especially when it involves public dollars.”

Sources: 

1. Press Release, Tenn. St. Gov., Bradley County Woman Charged with TennCare Drug 

Fraud (Aug. 5, 2014), https://www.tn.gov/news/2014/8/5/bradley-county-womancharged-with-tenncare-drug-fraud.html.

2. Barbara Sue Perdue Greer Charged with Coercion of a Witness, Thechattanoogan.com, 

http://www.chattanoogan.com/2014/10/25/287145/Barbara-Sue-Perdue-Greer-ChargedWith.aspx.
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Case Summary 73: “Doctors and Pharmacists Who Use Their Professional Licenses to 

Turn an Illicit Profit Through Drug Dealing and Medicaid Fraud”

• Defendant(s): Dr. Clifton Howell 

• Case Year: 2011

• State: New Jersey

• Case Status: Dr. Howell pleaded guilty in July 2011 in Hudson County Superior Court to 

health care claims fraud. A judge sentenced him to three years in prison and ordered him to 

pay $101,000 in restitution. At least 33 other defendants pleaded guilty as well.

• Description of Scheme: Dr. Howell defrauded Medicaid as part of a larger scheme in which 

doctors and pharmacists billed Medicaid for pain pills that were diverted to drug dealers, who 

sold the medications on the street. 

• Key Facts: 

o Dr. Howell admitted that he submitted false claims to Medicaid for prescription 

opioids.

o Pharmacists used Dr. Howell’s prescriptions to dispense the drugs to Medicaid 

beneficiaries, but not the intended patients.

o The statewide narcotics ring distributed prescription opioids including oxycodone and 

Percocet.

o As Dr. Howell pleaded guilty, Ronald Chillemi, the state’s acting insurance fraud 

prosecutor, noted: “Too often we uncover doctors and pharmacists who use their 

professional licenses to turn an illicit profit through drug dealing and Medicaid 

fraud.”

Sources:

1. Press Release, N.J. Dep’t of Law & Pub. Safety, Hudson County Man Sentenced to 22 

Years in Prison as Leader of Crime Network that Defrauded Medicaid (Sept. 16, 2011), 

http://www.nj.gov/oag/newsreleases11/pr20110916a.html.

2. Press Release, N.J. Dep’t of Law & Pub. Safety, Ringleader and Doctor Plead Guilty in 

Statewide Crime Network that Dealt Pain Pills and Defrauded Medicaid (July 6, 2011), 

http://www.nj.gov/oag/newsreleases11/pr20110706a.html.

3. Karen Yi, Doctor from West Orange Sentenced for Medicaid Fraud, West Orange Patch, 

https://patch.com/new-jersey/westorange/doctor-from-west-orange-sentenced-formedicaid-fraud.
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134

Case Summary 74: Opioids for a Doctor’s Girlfriend Leads to Medicaid Fraud 

• Defendant(s): Dr. John Yacoub

• Case Year: 2014

• State: Maryland

• Case Status: Dr. Yacoub pleaded guilty in May 2014 in U.S. District Court in Baltimore to 

conspiracy to distribute and possess with intent to distribute fentanyl, hydrocodone, 

oxycodone, morphine, and methadone. A federal judge sentenced him to one year in prison.

• Description of Scheme: Dr. Yacoub prescribed medically unnecessary opioid pain 

medication to his girlfriend and others, defrauding Medicaid. 

• Key Facts: 

o Between 2012 and 2013, Dr. Yacoub provided prescriptions and pills—including 

Vicodin, oxycodone, and morphine—to his Nevada-based girlfriend, who was a drug 

addict.

o Dr. Yacoub asked two other people, identified only as person A and person B, to help 

him get additional opioids to his girlfriend in exchange for giving them prescriptions 

for methadone.

o Medicaid paid $2,375 for morphine prescriptions obtained by person B for Dr. 

Yacoub. Patient files for Dr. Yacoub’s girlfriend, person A, and person B showed no 

medical reasons for any of Dr. Yacoub’s prescriptions.

Sources:

1. Press Release, U.S. Att’y Off., Md., Dr. John Yacoub Sentenced for Illegal Drug 

Distribution (Nov. 3, 2014), https://www.justice.gov/usao-md/pr/dr-john-yacoubsentenced-illegal-drug-distribution.

2. Press Release, U.S. Att’y Off., Md., Dr. John Yacoub Pleads Guilty to Drug Distribution 

(May 28, 2014), https://www.justice.gov/usao-md/pr/dr-john-yacoub-pleads-guilty-drugdistribution.

3. Plea Agreement, United States v. Yacoub, No. 1:14-cr-00148-CCB (D. Md. May 28, 

2014).
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

135

Case Summary 75: A ‘Two-Tiered’ Medical Practice, with a Bogus Pain Management 

Clinic 

• Defendant(s): Dr. Anand Persaud

• Case Year: 2015

• State: New York

• Case Status: Dr. Persaud pleaded guilty in May 2015 in Nassau County District Court to 

criminal sale of prescriptions for a controlled substance and criminal tax fraud. A judge 

sentenced him to six months in prison. 

• Description of Scheme: Dr. Persaud prescribed medically unnecessary opioid pain 

medication, which were paid for by Medicaid. 

• Key Facts: 

o Prosecutors said Dr. Persaud maintained a two-tiered medical practice: seeing 

medical patients with regular medical issues and running a fraudulent pain 

management practice. If patients visited Dr. Persaud for so-called pain management, 

he charged them $250 to $300 per visit. On a number of occasions, Dr. Persaud 

prescribed patients oxycodone that he knew was medically unnecessary.

o Dr. Persaud and his wife both also admitted to filing false tax returns because they did 

not claim income they gained from the “pain management” visits. His wife pleaded 

guilty in 2015, and a judge sentenced her to five years of probation.

o Investigators from the New York State Attorney General’s Medicaid Fraud Control 

Unit raided Dr. Persaud’s offices, leading to his arrest in July 2013.

Sources:

1. Press Release, Eric T. Schneiderman, N.Y. Att’y Gen., A.G. Schneiderman Announces 

Jail Sentence of Long Island Doctor for Selling Prescriptions for Oxycodone (Oct. 20, 

2016), https://ag.ny.gov/press-release/ag-schneiderman-announces-jail-sentence-longisland-doctor-selling-prescriptions.

2. Press Release, Eric T. Schneiderman, N.Y. Att’y Gen., Long Island Doctor Arrested for 

Selling Prescriptions for Narcotic Drugs (July 30, 2013), https://ag.ny.gov/pressrelease/long-island-doctor-arrested-selling-prescriptions-narcotic-drugs.
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

136

Case Summary 76: The Doctor Was Away and Medicaid Got The Bill 

• Defendant(s): Dr. John Q. A. Webb, Jr. and Kari Mannino

• Case Year: 2014

• State: Texas

• Case Status: Dr. Webb pleaded guilty in December 2014 in U.S. District Court in Beaumont 

to conspiracy to commit health care fraud. A judge sentenced him to 15 months in prison. 

Mannino pleaded guilty in February 2014 to conspiracy to commit health care fraud. A 

judge sentenced her to three years of probation.

• Description of Scheme: Dr. Webb and his office manager, Mannino, defrauded Medicaid, 

Medicare, and private insurers by having unlicensed staff members prescribe opioids.

• Key Facts: 

o Dr. Webb allowed unlicensed staff members to prescribe controlled substances, 

including Suboxone, to patients when he was out of the office and had not treated 

the patients.

o Mannino distributed the drugs directly to patients, rather than sending the 

prescriptions to pharmacies.

o Mannino then oversaw the submission of false claims to Medicaid and Medicare 

stating that a licensed physician had provided the health care services.

o The scheme caused more than $300,000 in loses to Medicaid, Medicare, and 

private insurance companies.

Sources:

1. Press Release, U.S. Att’y Off., E.D. Tex., Tyler County Woman Guilty of Health Care 

Fraud (Feb 12, 2014), https://www.justice.gov/usao-edtx/pr/tyler-county-woman-guiltyhealth-care-fraud.

2. Press Release, FBI, Former Beaumont Physician Sentenced for Health Care Fraud 

Violation (Dec. 18, 2014), https://www.fbi.gov/contact-us/fieldoffices/houston/news/press-releases/former-beaumont-physician-sentenced-for-healthcare-fraud-violation.

3. Press Release, U.S. Att’y Off., E.D. Tex., Former Beaumont Physician and Office 

Manager Charged with Health Care Fraud (Dec. 12, 2013), https://www.justice.gov/usaoedtx/pr/former-beaumont-physician-and-office-manager-charged-health-care-fraud.

4. United States v. Webb, No. 1:13cr123 (E.D. Tex. July 23, 2014).
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

137

Case Summary 77: “When the Indiana Medicaid program is Wrongly Billed for Ineligible 

Claims . . . Taxpayers Become Victims As Well.”

• Defendant(s): Dr. William Hedrick

• Case Year: 2015

• State: Indiana

• Case Status: Prosecutors charged Dr. Hedrick in January 2015 in Delaware Circuit Court 

with Medicaid fraud, reckless prescribing, and forgery. He has pleaded not guilty and his trial 

is scheduled for March 2018.

• Description of Scheme: Authorities allege that Dr. Hedrick over-prescribed opioids at 

dangerous levels, resulting in the deaths of at least eight patients, and that he defrauded 

Medicaid.

• Key Facts:

o Dr. Hedrick ran pain management clinics where he allegedly saw up to 100 patients a 

day, prescribing opioids without establishing medical need for the drugs. 

Investigators observed 326 patients enter and leave his clinics in just three days. 

o Most of Dr. Hedrick’s patients were on Medicaid, and prosecutors accuse him of 

allowing employees to fraudulently bill Medicaid for procedures and prescriptions 

using another physician’s information.

o As authorities announced Dr. Hedrick’s arrest, Greg Zoeller, then Indiana’s attorney 

general, said that “the prescription drug abuse epidemic is fueled by dangerous 

overprescribing of addictive opioid drugs... when the Indiana Medicaid program is 

wrongly billed for ineligible claims, as is alleged here, taxpayers become victims as 

well.”

Sources: 

1. Keith Roysdon, Tidal Wave of Heroin Overdoses Followed Pain Doctor Raid, The Star 

Press, Nov. 10, 2017, http://www.thestarpress.com/story/news/local/2017/11/10/tidalwave-heroin-overdoses-followed-pain-doctor-raid/780885001/.

2. Jeff Wiehe, Documents Reveal Case Against Doctor, The J. Gazette, Mar. 16, 2016, 

http://www.journalgazette.net/News/Local/Documents-reveal-case-against-doctor4354966.

3. Keith Roysdon, Feds Link Deaths to Muncie Pain Clinic Doctor, IndyStar, Oct. 21, 2014, 

https://www.indystar.com/story/news/crime/2014/10/21/muncie-pain-clinic-doctorinvestigation/17652283/.
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

138

Case Summary 78: Colorado Pill Mill

• Defendant(s): Dr. Joel E. Miller

• Case Year: 2015

• State: Colorado

• Case Status: A federal jury in U.S. District Court in Denver convicted Dr. Miller in 

November 2015 of unlawful distribution of a controlled substance without a legitimate 

medical purpose, unlawful distribution of a controlled substance without a legitimate medical 

purpose resulting in death, and providing false information on his DEA registration 

application. A judge sentenced him to five years in prison.

• Description of Scheme: Dr. Miller ran a “pill mill” and prescribed excessive amounts and 

dangerous combinations of opioids. At least one patient died from the drugs.

• Key Facts:

o Dr. Miller prescribed controlled substances, including hydrocodone, without 

establishing a legitimate medial purpose for the medication.

o Dr. Miller’s prescriptions and dosage levels caused patients to become addicts. He 

allowed staff members to distribute opioids in his absence and without a doctor’s 

examination, using a form he had pre-signed.

o Prosecutors said Dr. Miller defrauded Medicaid, Medicare, and private insurers by 

filing fraudulent claims for medical services and procedures, using a billing code with 

a higher reimbursement rate.

Sources: 

1. Press Release, U.S. Att’y Off., Colo., Craig Doctor Arrested for Prescribing Drugs 

Resulting in Patient Deaths and Health Care Fraud Scheme (Aug. 26, 2013), 

https://www.justice.gov/usao-co/pr/craig-doctor-arrested-prescribing-drugs-resultingpatient-deaths-and-heath-care-fraud.

2. Yesenia Robles, Craig Doctor Indicted, Arrested After Prescriptions Lead to Deaths, The 

Denver Post, Aug. 26, 2013, https://www.denverpost.com/2013/08/26/craig-doctorindicted-arrested-after-prescriptions-lead-to-deaths/.

3. Press Release, DEA, Doctor Convicted in Death of Patient (Nov. 9, 2015), 

https://www.dea.gov/divisions/den/2015/den110915.shtml.

4. Indictment, United States v. Miller, No. 13-cr-00354-REB (D. Colo. Aug. 21, 2013).
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

139

Case Summary 79: Fake Prescriptions and False Claims

• Defendant(s): Julia Clymer

• Case Year: 2013

• State: Illinois

• Case Status: Clymer pleaded guilty in September 2013 in U.S. District Court in East St. 

Louis to health care fraud and obtaining possession of a controlled substance by fraud. A 

judge sentenced her to five years of probation.

• Description of Scheme: Clymer defrauded Medicaid by creating fraudulent opioid 

prescriptions and filling them at pharmacies.

• Key Facts:

o Through her employer, Clymer authorized the creation of fake prescriptions intended 

for Medicaid beneficiaries. Authorities did not name the employer.

o Clymer then diverted the prescriptions for her own use, causing false claims to be 

submitted to Illinois’s Medicaid program.

o Clymer obtained 30 pills containing hydrocodone from a pharmacy.

Sources: 

1. Press Release, U.S. Att’y Off., S.D. Ill., Collinsville Woman Pleads Guilty to Drug and 

Health Care Offenses (Sept. 27, 2013), https://www.justice.gov/usao-sdil/pr/collinsvillewoman-pleads-guilty-drug-and-health-care-offenses.
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

140

Case Summary 80: Preying on Medicaid patients

• Defendant(s): Dr. David Gierlus

• Case Year: 2013

• State: Iowa

• Case Status: Dr. Gierlus pleaded guilty in March 2013 in U.S. District Court in Davenport to 

unlawfully prescribing hydrocodone, a Schedule III controlled substance. A judge sentenced 

him to eight years in prison.

• Description of Scheme: Dr. Gierlus prescribed hydrocodone and other controlled 

substances to a female patient without a legitimate medical need. At the time, he was 

engaged in an inappropriate sexual relationship with the patient. 

• Key Facts:

o Dr. Gierlus was a family practice physician in Muscatine, Iowa for more than 20 

years.

o He began treating the female patient and became involved in a relationship with her 

by 2012. In February 2012, Dr. Gierlus prescribed Patient A 120 hydrocodone pills 

for no legitimate medical purpose.

o At sentencing, U.S. District Judge Stephanie M. Rose called Dr. Gierlus a “sexual 

predator,” citing court records that said he had sexual contact with 18 victims, 

including three patients who he injected with drugs before assaulting them. Dr. 

Gierlus did not dispute the court records.

o Judge Rose said Dr. Gierlus preyed on “vulnerable” women, many of them Medicaid 

patients, including one female Medicaid recipient to whom he gave rent money in 

exchange for sex.

Sources: 

1. Chris Minor, Dirty Doctor Gets 8 Years, $400,00 Fine in Sex for Drugs Case, WQAD 8 

News, July 19, 2013, http://wqad.com/2013/07/18/dirty-doctor-gets-8-years-400000-finein-sex-for-drugs-case/.

2. United States v. Gierlus, No. 15-2763 (8th Cir. July 13, 2016).

3. Brian Wellner, Former Local Doctor Gets Stiff Sentence, Muscatine Journal, July 18, 

2013, http://muscatinejournal.com/news/local/crime-and-courts/former-local-doctor-getsstiff-sentence/article_65d5ae49-6e50-54e0-b209-2b7a74976bf6.html.
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

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141

4. Deirdre Cox Baker, Muscatine Doctor Surrenders Medical License, Quad-City Times, 

Dec. 24, 2013, http://qctimes.com/news/local/muscatine-doctor-surrenders-medicallicense/article_7f8d44e4-0929-5972-80cb-c6622d6a1b40.html.

5. Complaint, United States v. Gierlus, No. 3:12-mj-83 (S.D. Iowa Aug. 30, 2012).
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

142

Case Summary 81: Opioids in Exchange for Sex

• Defendant(s): Dr. Tahir Usman Mir

• Case Year: 2012

• State: Pennsylvania

• Case Status: A jury in Indiana County Common Pleas Court convicted Dr. Mir in June 2012 

of violating the state’s Controlled Substances Drugs Devices and Cosmetics Act. 

• Description of Scheme: Dr. Mir wrote unlawful opioid prescriptions to female patients in 

exchange for sex.

• Key Facts:

o Between December 2008 and October 2011, Dr. Mir provided two women with 

prescriptions for painkillers, including oxycodone and hydrocodone, in exchange for 

sexual favors.

o On October 11, 2011, the state attorney general’s Medicaid Fraud Control Section 

raided Dr. Mir’s office.

o Prosecutors said Dr. Mir defrauded Medicaid by accepting cash payments for 

medication he provided to drug addicts.

Sources: 

1. Paul Peirce, Doctor Nabbed in Drug Sting, TRIBLive, Oct. 13, 2011, 

http://triblive.com/x/pittsburghtrib/news/regional/s_761607.html.

2. Paul Peirce, Sex with Patients Nets Time in Prison, TRIBLive, Sept. 14, 2013, 

http://triblive.com/news/westmoreland/4700721-74/mir-women-martin.

3. Paul Peirce, Indiana County Doctor Who Traded Drugs for Sex to be Resentenced, 

TRIBLive, Dec. 19, 2014, http://triblive.com/news/indiana/7406748-74/mir-courtindiana.

4. Paul Peirce, Indiana Doctor to Face Trial in Drugs-for-Sex Case, TRIBLive, Feb. 27, 

2013, http://triblive.com/news/indiana/3555949-74/mir-trial-office.
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

143

Case Summary 82: Selling Pain Prescriptions for Millions in Profit

• Defendant(s): Dr. David Brizer

• Case Year: 2013

• State: New York 

• Case Status: Dr. Brizer pleaded guilty in March 2013 in Rockland County Court to criminal 

sale of a prescription of a controlled substance, criminal possession of a controlled substance, 

criminal tax fraud, and conspiracy. A judge sentenced him to five years of probation.

• Description of Scheme: Dr. Brizer sold opioid prescriptions to drug dealers in a scheme that 

led to Medicaid being defrauded out of thousands of dollars. The dealers then re-sold some 

of the pills on the street.

• Key Facts:

o The prescriptions for oxycodone and other pain medications that Dr. Brizer sold from 

his midtown Manhattan and Rockland County offices were worth millions of dollars 

in pills.

o Dr. Brizer sold prescriptions in the names of phony patients, charged his customers 

up to $300 for each sale.

o A reputed drug dealer who purchased Dr. Brizer’s prescriptions allegedly defrauded 

Medicaid by causing the program to pay thousands of dollars to pharmacies for the 

illicit narcotics.

Sources: 

1. Press Release, Eric T. Schneiderman, N.Y. Att’y Gen., A.G. Schneiderman Announces 

Guilty Plea of Manhattan Doctor for Selling Oxycodone Prescriptions to Drug Dealers 

(Mar. 1, 2013), https://ag.ny.gov/press-release/ag-schneiderman-announces-guilty-pleamanhattan-doctor-selling-oxycodone-prescriptions.

2. Press Release, Eric T. Schneiderman, N.Y. Att’y Gen., A.G Schneiderman Announces 

Indictment of Manhattan Doctor Who Sold Oxycodone Prescriptions to Drug Dealers 

(Feb. 11, 2013), https://ag.ny.gov/press-release/ag-schneiderman-announces-indictmentmanhattan-doctor-who-sold-oxycodone-prescriptions.

3. Steve Lieberman, Former Nyack Psychiatrist Gets Probation for Selling Oxy Scripts, 

lohud.com, Feb. 7, 2014, 

https://www.lohud.com/story/news/local/westchester/2014/02/07/former-nyackpsychiatrist-gets-probation-for-selling-oxy-scripts-/5283221/.
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

144

Case Summary 83: Stolen Prescription Paper and Stolen Medicaid Cards Lead to Illicit 

Opioids

• Defendant(s): Suzanne Benizio

• Case Year: 2011

• State: New York

• Case Status: Benizio pleaded guilty in December 2011 in State Supreme Court in Bronx 

County to forgery. A judge sentenced her to four to eight years in prison and ordered her to 

repay the New York State Medicaid program more than $200,000.

• Description of Scheme: Benizio led a drug ring that distributed $200,000 in illicit opioids in 

20 New York counties through forged prescriptions, defrauding Medicaid. 

• Key Facts:

o Benizio created more than 250 forged prescriptions for OxyContin and Roxicodone 

on prescription paper stolen from New York City-area doctors and hospitals. When 

authorities arrested her, she possessed enough paper for 1,500 more phony 

prescriptions.

o Working with co-conspirators, Benizio misappropriated numerous Medicaid cards 

that she used to create the fake prescriptions in the names of real Medicaid recipients.

o Pharmacies filled the prescriptions using the Medicaid cards, and the drug ring then 

re-sold the pills on the street.

Sources: 

1. NYC Woman Sentenced for Writing 250+ Fake Prescriptions, The Observer-Dispatch, 

Feb. 16, 2012, http://www.uticaod.com/x1768344685/NYC-woman-sentenced-forwriting-250-fake-prescriptions.

2. Bronx Woman Pleads Guilty to Forging Painkiller Prescriptions, CBS New York, Dec. 

21, 2011, http://newyork.cbslocal.com/2011/12/21/bronx-woman-pleads-guilty-toforging-painkiller-prescriptions/.
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

145

Case Summary 84: “Basically, he was using the state to subsidize his drug-dealing.”

• Defendant(s): Louis Eppinger 

• Case Year: 2013

• State: Ohio

• Case Status: Eppinger pleaded guilty in March 2013 in U.S. District Court in Cleveland to 

health care fraud and conspiracy to possess with intent to distribute oxycodone. A judge 

sentenced him to 12 years in prison. Six other people pleaded guilty to related crimes.

• Description of Scheme: Eppinger masterminded a conspiracy that forged opioid 

prescriptions and re-sold the illicit drugs on the street, bilking Medicaid. 

• Key Facts:

o Eppinger obtained blank prescription paper and the Drug Enforcement 

Administration (DEA) numbers of various northern Ohio physicians and gave the 

paper to a co-conspirator, who forged prescriptions for OxyContin and Percocet. 

o Other co-conspirators, known as “walkers,” filled the prescriptions at pharmacies and 

gave the pills to Eppinger, who sold some of the medication.

o Eppinger billed the Ohio Medicaid program $21,098 for the illegal painkillers. 

“Basically, he was using the state to subsidize his drug-dealing,” Steven Dettelbach, 

then the U.S. attorney, said after a federal grand jury indicted Eppinger.

Sources: 

1. Press Release, U.S. Att’y Off., N.D. Ohio, Cleveland Man Sentenced to 12 Years in 

Prison for Leading Ring That Obtained Blank Prescriptions, Forged Them and Sold the 

Painkillers (June 11, 2013), https://www.justice.gov/usao-ndoh/pr/cleveland-mansentenced-12-years-prison-leading-ring-obtained-blank-prescriptions.

2. James F. McCarty, Grand Jury Indicts 7 on Charges of Running Elaborate Pill Mill, 

Cleveland.com, Mar. 20, 2012, 

http://blog.cleveland.com/metro/2012/03/federal_grand_jury_indicts_sev.html.

3. Group Indicted for Forging Pain Pill Prescriptions, Charleston Daily Mail, Mar. 22, 

2012.
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

146

Case Summary 85: Fake Prescriptions, Real Oxycodone

• Defendant(s): Yolanda Rice

• Case Year: 2014

• State: Illinois

• Case Status: Rice pleaded guilty in April 2014 in U.S. District Court in East St. Louis to 

health care fraud and obtaining possession of a controlled substance by fraud. A judge 

sentenced her to five years of probation.

• Description of Scheme: Rice defrauded Medicaid by obtaining opioids through fraudulent 

prescriptions. 

• Key Facts:

o Rice worked at a doctor’s office in Swansea, Illinois, called Master Medical Care.

o Through her employer, Rice authorized fake prescriptions ostensibly for Medicaid 

beneficiaries, then diverted the drugs to herself. The Illinois Medicaid program paid 

nearly $2,000 in fraudulent claims because of the prescriptions.

o Through the scheme, Rice obtained 180 illegal oxycodone pills.

Sources: 

1. Press Release, U.S. Att’y Off., S.D. Ill., Belleville Woman Indicted for Health Care 

Fraud and Obtaining Controlled Substances by Fraud (Oct. 23, 2013), 

https://www.justice.gov/usao-sdil/pr/belleville-woman-indicted-health-care-fraud-andobtaining-controlled-substances-fraud.

2. Belleville Woman Used Fraudulent Prescriptions to Get Pain Pills, St. Louis PostDispatch, Apr. 2, 2014, http://www.stltoday.com/news/local/illinois/belleville-womanused-fraudulent-prescriptions-to-get-pain-pills/article_61c20ed7-a489-5758-aff9-

2dc349278966.html.

3. Stipulation of Facts, United States v. Rice, No. 13-30254-DRH (S.D. Ill. Apr. 2, 2014).
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

147

Case Summary 86: When the Doctor’s Away, He Bills Medicaid Anyway

• Defendant(s): Dr. Michael A. Taylor

• Case Year: 2013

• State: Massachusetts

• Case Status: Dr. Taylor pleaded guilty in August 2013 in Bristol Superior Court to illegal 

prescribing of a controlled substance, violating the Medicaid False Claims Act, and larceny. 

A judge sentenced him to 2 1⁄2 years in jail, suspended for a probationary period of five years, 

and ordered him to pay more than $9,800 in restitution to MassHealth, the Massachusetts 

Medicaid program.

• Description of Scheme: Dr. Taylor prescribed medically unnecessary opioids, causing 

pharmacies to falsely bill MassHealth for the narcotics.

• Key Facts:

o Dr. Taylor, who practiced general internal medicine, illegally prescribed oxycodone, 

Percocet and other oxycodone-based drugs to 15 patients.

o Dr. Taylor fraudulently billed more than $9,800 to MassHealth for office visits where 

patients picked up the prescriptions. In reality, the patients didn’t see him during 

those visits. Sometimes, he was out of state.

o Martha Coakley, then the Massachusetts attorney general, said the case demonstrates 

the importance of guarding against Medicaid fraud involving opioids. “Illegally 

prescribing drugs with a high potential for abuse is a serious offense that puts patients 

at risk and steals critical funding from MassHealth,” she said upon Dr. Taylor’s guilty 

plea.

Sources: 

1. Press Release, Maura Healey, Mass. Att’y Gen., New Bedford Doctor Indicted on 

Charges of Prescribing Oxycodone Illegally to Patients (Dec. 21, 2012), 

http://www.mass.gov/ago/news-and-updates/press-releases/2012/2012-12-21-drindictments.html.

2. Press Release, Maura Healey, Mass. Att’y Gen., New Bedford Doctor Pleads Guilty to 

Charges of Prescribing Oxycodone Illegally to Patients (Aug. 16, 2013), 

http://www.mass.gov/ago/news-and-updates/press-releases/2013/2013-08-16-dr-taylorplea.html.
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

148

Case Summary 87: From Public Housing to Prison

• Defendant(s): Eugene Brown 

• Case Year: 2013

• State: New Jersey

• Case Status: Brown pleaded guilty in January 2013 in U.S. District Court in Trenton to 

distribution and possession with intent to distribute oxycodone, and possession of a firearm 

by a convicted felon. A judge sentenced him to one year in prison. At least five other people 

were convicted of related crimes.

• Description of Scheme: Brown participated in a conspiracy to obtain fraudulent 

prescriptions for oxycodone-based pain medication and sell the pills on the street.

• Key Facts:

o Brown lived on public assistance in an Atlantic City housing project, his $775 

monthly income barely able to cover his rent.

o In pain from kidney dialysis and other ailments, Brown obtained painkillers from his 

doctor. Medicaid paid for the drugs.

o Brown then sold some of his pills for money. A confidential informant told lawenforcement officials that Brown sold him 50 to 100 oxycodone-based pills on 4 to 6 

occasions.

o At sentencing, Brown apologized to the court. “First of all, I’d like to say I’m sorry I 

got myself into this situation, I can’t undo it,” he said. “I put myself in this situation.”

Sources:

1. Plea Agreement, United States v. Brown, No. 3:13-cr-00191-MAS-1 (D.N.J. Mar. 19, 

2013).
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

149

Case Summary 88: A Drug Ring Ran Medical Offices, at Medicaid’s Expense

• Defendant(s): Dr. Zhanna Kanevsky

• Case Year: 2013

• State: New York

• Case Status: Dr. Kanevsky pleaded guilty in 2013 in Manhattan Supreme Court to 

participating in a prescription drug trafficking ring. A judge sentenced her to five years of 

probation. Prosecutors charged four other people in the case. 

• Description of Scheme: Dr. Kanevsky wrote prescriptions for the Brooklyn-based ring, 

which distributed more than $3.4 million in oxycodone and other prescription drugs through 

medical offices it controlled. Medicaid paid for some of the illicit prescriptions.

• Key Facts:

o Between 2012 and May 2013, Dr. Kanevsky wrote prescriptions for about 100,000 

oxycodone pills and 5,000 Xanax pills, with a combined street value of about $2 

million.

o Dr. Kanevsky issued the prescriptions to what prosecutors called phony patients, 

whom she did not examine, while working at a Brooklyn medical office that the drug 

ring established.

o The ring directed the patients to fill prescriptions written by Kanevsky and others at 

specified pharmacies, using Medicaid or cash. 

Sources: 

1. Press Release, Off. of the Special Narcotics Prosecutor for N.Y.C., Rx Trafficking Ring 

Controlled Brooklyn Medical Practices: Nearly $3.4 million in pills diverted (July 17, 

2013), http://www.snpnyc.org/wpcontent/uploads/2016/05/rx_trafficking_brooklyn_new.pdf.

2. Frank Donnelly, Doctor From Staten Island Wrote $2 Million in Bogus Prescriptions 

Despite Being on Probation, Prosecutors Allege, silive.com, July 18, 2013, 

http://www.silive.com/news/2013/07/doctor_from_staten_island_wrot.html.
Majority Staff Report

Committee on Homeland Security and Governmental Affairs

United States Senate

150

Case Summary 89: Dentist Becomes Addicted to Opioids, Defrauds Medicaid 

• Defendant(s): Walter L. Dawkins

• Case Year: 2012

• State: Illinois 

• Case Status: Dawkins pleaded guilty in September 2012 in U.S. District Court in Benton to 

health care fraud and illegal dispensation of a controlled substance. A judge sentenced him 

to one year in prison.

• Description of Scheme: Dawkins, a dentist, wrote hundreds of fraudulent opioid 

prescriptions, defrauding Medicaid.

• Key Facts:

o Dawkins, who owned a dental clinic in Fairfield, Illinois, became addicted to 

hydrocodone and took up to 10 hydrocodone tablets at a time, according to court 

documents.

o Dawkins wrote hydrocodone prescriptions with no legitimate medical need and 

arranged for a friend to fill them at various pharmacies. The friend gave some of the 

pills to Dawkins.

o Some of Dawkins’s prescriptions were for false names; others were for Medicaid 

recipients.

o Medicaid paid $1,242—out of a total $3,597 bill—for 118 prescriptions Dawkins 

wrote for 6,006 Hydrocodone tablets.

Sources: 

1. Stipulation of Facts, United States v. Dawkins, No. 4:12-cr-40101-JPG (S.D. Ill. Sept. 24,

2012).

2. Press Release, FBI, Wayne County Dentist Sentenced for Health Care Fraud and Illegal 

Distribution of Controlled Substances (Dec. 21, 2012), 

https://archives.fbi.gov/archives/springfield/press-releases/2012/wayne-county-dentistsentenced-for-health-care-fraud-and-illegal-distribution-of-controlled-substances.

3. Dentist in Illinois Headed to Prison for Peddling Painkillers, Insurance Fraud News, 

Dec. 26, 2012, http://www.insurancefraud.org/IFNS-detail.htm?key=15323.
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Case Summary 90: A Drug Ring out of Her Home

• Defendant(s): Catherine McIntosh

• Case Year: 2011

• State: New York 

• Case Status: McIntosh pleaded guilty in December 2011 in U.S. District Court in Buffalo to 

possession with intent to distribute controlled substances. A judge sentenced her to three 

years of probation.

• Description of Scheme: McIntosh sold her prescription opioids, which had been funded by 

Medicaid and Medicare.

• Key Facts:

o A confidential informant told federal agents that McIntosh was selling controlled 

substances from her residence. Agents then used the informant—outfitted with a 

digital recorder and concealed body transmitter—to purchase drugs from McIntosh. 

The drugs included hydrocodone, fentanyl, and Xanax.

o Medicaid and Medicare paid for the drugs McIntosh sold, which had been prescribed 

in her name.

Sources: 

1. Press Release, U.S. Att’y Off., W.D.N.Y., Buffalo Woman Sentenced on Drug Charges 

(July 11, 2012), https://www.justice.gov/sites/default/files/usaowdny/legacy/2013/02/27/McIntosh2.pdf.

2. Complaint, United States v. McIntosh, No. 1:11-cr-00340-WMS (W.D.N.Y. Sept. 28, 

2011).
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Case Summary 91: An Opioid-Addicted Mother, Medicaid, and a Dead Infant Son

• Defendant(s): Tisheena Louise Brown

• Case Year: 2014

• State: Washington, D.C.

• Case Status: Brown pleaded guilty in May 2014 in D.C. Superior Court to insurance fraud 

and voluntary manslaughter. A judge sentenced her to four years in prison.

• Description of Scheme: Brown essentially “hospital-shopped,” fraudulently obtaining 

opioids from multiple hospitals and using Medicaid to pay for the drugs. Her infant son 

would end up dying from a prescription medication she gave him. 

• Key Facts:

o Brown, who had a history of prescription drug abuse, frequented Washington, D.C.-

area hospitals to unlawfully obtain oxycodone, dilaudid, and other drugs.

o At the hospitals, Brown filled prescriptions in her own name, without telling doctors 

she had obtained the same medications from other doctors and hospitals. 

o In a four-month period in 2013, various doctors prescribed Brown more than 1,700 

pills. Medicaid paid for the medications.

o In September 2013, Brown’s seven-week-old son stopped breathing and died after she 

gave him Promethazine, a prescription medication that a doctor had prescribed for 

her. Authorities ruled the death a homicide, caused by a lethal dose of Promethazine.

Sources: 

1. Press Release, U.S. Att’y Off., D.C., District Woman Sentenced to Four Years in Prison 

(Oct. 24, 2014), https://www.justice.gov/usao-dc/pr/district-woman-sentenced-fouryears-prison.

2. District Woman Pleads Guilty to Manslaughter in Death of Her Infant Son Defendant 

Admits Drug Use, Also Pleads Guilty to Insurance Fraud, State News Service, May 7, 

2014.
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153

Case Summary 92: “I Can Do That. I Will Give You Vicodin and Other Meds.”

• Defendant(s): Dr. Basil Azim-Abdulmuti Qandil

• Case Year: 2014

• State: Michigan

• Case Status: A federal judge in U.S. District Court in Detroit convicted Dr. Qandil in April 

2014 of illegal drug distribution, health care fraud, and money laundering. He failed to 

appear for his sentencing, and authorities issued an arrest warrant.

• Description of Scheme: Dr. Qandil ran a medical practice that doubled as a pill mill, 

prescribing millions of opioids and improperly billing Medicaid along with Medicare.

• Key Facts:

o Prosecutors presented evidence at trial showing that Dr. Qandil prescribed 3.7 million 

dosage units of controlled substances—including oxycodone and Vicodin—between 

2011 and 2013. He barely examined some patients, and did not examine others at all. 

o The drugs that Dr. Qandil prescribed were re-sold on the street or used by addicted 

patients. Lines would form at his clinic at 8 a.m. and block entry to a bank next door.

o Court documents show that agents sent fake patients undercover into the medical 

clinic, some of whom paid with law enforcement-provided Medicaid cards. One such 

patient sought opioids for so-called back pain. “I can do that. I will give you Vicodin 

and other meds,” Dr. Qandil responded, and he then prescribed the drugs with no 

medical examination.

o Dr. Qandil transferred more than $1.5 million in illicit proceeds to a bank account in 

Amman, Jordan.

Sources: 

1. Metro Detroit Doctor Convicted of 34 Crimes in Drug, Fraud Probe, CBS Detroit, Apr. 

19, 2014, http://detroit.cbslocal.com/2014/04/19/metro-detroit-doctor-convicted-in-drugfraud-probe/.

2. Hamtramck Clinic Doctor Convicted in Drug, Fraud Investigation, Crain’s Detroit 

Business, Apr. 18, 2014, 

http://www.crainsdetroit.com/article/20140418/NEWS01/140419855/hamtramck-clinicdoctor-convicted-in-drug-fraud-investigation.

3. Press Release, U.S. Att’y Gen. Off., E.D. Mich., Dearborn Heights Doctor Convicted of 

Health Care Fraud (Apr. 17, 2014), https://www.justice.gov/usao-edmi/pr/dearbornheights-doctor-convicted-health-care-fraud.
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4. Compl., United States v. Qandil, No. 2:13-mj-30029 (E.D. Mich. Jan. 15, 2013).
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155

Case Summary 93: “Frankly, You're Lucky to Be Alive.” 

• Defendant(s): Dr. Robert Wayne Locklear

• Case Year: 2014

• State: Tennessee

• Case Status: Dr. Locklear pleaded guilty in June 2014 in U.S. District Court in Greeneville 

to conspiracy to distribute cocaine and conspiracy to commit health care fraud. A judge 

sentenced him to two years in prison and ordered him to pay $121,958 in restitution to 

Medicaid and Medicare.

• Description of Scheme: Dr. Locklear was a crack cocaine addict who ran a suboxone clinic, 

prescribing suboxone and other medications without examining patients and defrauding 

Medicaid and Medicare. 

• Key Facts:

o Dr. Locklear admitted in court that he had a $2,500-a-day crack cocaine habit. 

Evidence showed it impaired his ability to run his medical practice and his substance 

abuse clinic, which was designed to treat people with opioid addictions.

o Dr. Locklear went back to his office at night to run the suboxone clinic and admitted 

that he saw patients while experiencing “a buzz.” In time, he saw patients 

infrequently and had unlicensed staff members prescribe suboxone to those he had 

not examined.

o A federal judge noted at sentencing that Dr. Locklear’s defrauding of Medicaid and 

Medicare was “in some ways . . . a more serious offense.” Citing Dr. Locklear’s 

addiction, the judge told him: “Frankly, you’re lucky to be alive.”

Sources: 

1. Press Release, FBI, Dr. Robert Wayne Locklear Sentenced to Serve 24 Months in Federal 

Prison on Crack Cocaine Conspiracy and Health Care Fraud Conspiracy Charges (Sept. 

24, 2014), https://www.fbi.gov/contact-us/field-offices/knoxville/news/press-releases/dr.-

robert-wayne-locklear-sentenced-to-serve-24-months-in-federal-prison-on-crack-cocaineconspiracy-and-health-care-fraud-conspiracy-charges.

2. Ken Little, Former Physician Sentenced in Federal Court, The Greeneville Sun, Sept. 

23, 2014, https://www.greenevillesun.com/news/local_news/former-physician-sentencedin-federal-court/article_7fbc9a42-acd7-5edb-83fb-1b7565531874.html.
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Case Summary 94: Toilet Paper and Paper Towels in Exchange for Opioids

• Defendant(s): Dr. Matthew Bennett

• Case Year: 2015

• State: New York

• Case Status: Dr. Bennett pleaded guilty in April 2015 in U.S. District Court in Buffalo to 

unlawfully distributing and dispensing oxycodone. A judge sentenced him to three years in 

prison.

• Description of Scheme: Dr. Bennett wrote illegal prescriptions for opioids and other drugs 

to undercover law enforcement officers. Some of those prescriptions were billed to Medicaid.

• Key Facts:

o Investigators said Dr. Bennett’s clinic often overflowed with patients who used 

Medicaid and private insurance to purchase painkillers from him. 

o Former patients and employees of Dr. Bennett told authorities he was issuing 

illegitimate prescriptions for controlled substances, triggering the investigation.

o Dr. Bennett issued multiple prescriptions on seven occasions for oxymorphone, 

Roxicodone, and other drugs to undercover officers and informants.

o Dr. Bennett often handed over the prescriptions in exchange for items such as paper 

products and a gas grill. In one instance, Dr. Bennett wrote a prescription for 

oxymorphone in the driveway of his home in exchange for toilet paper and paper 

towels delivered by an undercover officer.

Sources: 

1. Press Release, U.S. Att’y Off., W.D.N.Y., Clarence Physician Pleads Guilty to 

Distributing Controlled Substances (Apr. 20, 2015), https://www.justice.gov/usaowdny/pr/clarence-physician-pleads-guilty-distributing-controlled-substances.

2. Press Release, U.S. Att’y Off., W.D.N.Y., North Tonawanda Doctor Arrested; Charged 

with Illegally Dispensing Prescription Drugs (Aug. 10, 2012), 

https://www.justice.gov/sites/default/files/usao-wdny/legacy/2013/02/27/Bennett.pdf.

3. Compl., United States v. Bennett, No. 1:12-cr-00279-RJA-HBS (W.D.N.Y. Aug. 9, 

2012).
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Case Summary 95: Opioids in a Medical Clinic Parking Lot

• Defendant(s): Dr. Nolan Denny Crisp

• Case Year: 2013

• State: Missouri

• Case Status: Dr. Crisp pleaded guilty in April 2013 in U.S. District Court in Springfield to 

illegal distribution and dispensing of controlled substances. A judge sentenced him to two 

years in prison.

• Description of Scheme: Dr. Crisp handed out excessive opioid prescriptions, including to a 

patient with whom he was having a sexual relationship. Prosecutors said Medicaid paid for 

some of the illegal prescriptions.

• Key Facts:

o Employees at the medical clinic where Dr. Crisp worked expressed concern to 

authorities about his prescription-writing practices, noting that he met people in the 

parking lot he had not examined and gave them prescriptions.

o Once word got out that Dr. Crisp was generous with prescriptions, some patients 

waited for him across the street in a church parking lot.

o Dr. Crisp gave a woman with whom he was having a sexual relationship prescriptions 

for OxyContin and other opioids, even though she had no medical need for the drugs.

o Prosecutors alleged that Dr. Crisp wrote illegal prescriptions for Medicaid 

beneficiaries, who filled them at pharmacies that billed Medicaid. Medicaid paid 

more than $16,000 in claims for these illegal prescriptions and medically unnecessary 

office visits, according to court records.

Sources: 

1. Press Release, FBI, Former Bolivar Clinic Physician Sentenced for Illegally Dispensing 

Narcotics (Oct. 29, 2013), https://archives.fbi.gov/archives/kansascity/pressreleases/2013/former-bolivar-clinic-physician-sentenced-for-illegally-dispensingnarcotics.

2. Washington: Former Boliver Clinic Physician Indicted for Illegally Dispensing 

Narcotics, Health Care Fraud, US Official News, July 25, 2012.
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Case Summary 96: “Money Before Medicine.” 

• Defendant(s): Dr. Stephen J. Schneider, Linda K. Schneider

• Case Year: 2010

• State: Kansas

• Case Status: A federal jury in U.S. District Court in Wichita convicted both defendants in 

June 2010 of conspiracy, unlawful distribution of controlled substances, health care fraud, 

and money laundering. A judge sentenced Dr. Schneider to 30 years in prison and Linda 

Schneider, his wife, to 33 years in prison.

• Description of Scheme: The Schneiders ran an illegal prescription drug distribution ring, 

defrauding Medicaid and other health insurers out of more than $4 million.

• Key Facts:

o Dr. Schneider saw patients and Linda Schneider, a Licensed Practical Nurse 

managed the business at the Schneider Medical Clinic.

o The clinic illegally dispensed prescription opioids, including oxycodone, morphine 

and hydrocodone. Prosecutors focused their case at trial on 21 of 68 patients who 

died of drug overdoses connected to the Schneider’s medical care.

o As part of their Medicaid fraud scheme, the couple falsified insurance claims.

o Barry Grissom, then the U.S. attorney, said the couple “put money before medicine.”

Sources: 

1. Haysville Doctor and Wife Sentenced in Deadly Prescription Overdoses, Targeted News 

Service, Oct. 25, 2012.
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Case Summary 97: Massive Amounts of Opioids and a Massive Medicaid Fraud 

• Defendant(s): Antoine Johnson and Lawanda Johnson

• Case Year: 2011

• State: Washington

• Case Status: A federal jury in U.S. District Court in Tacoma convicted both defendants in 

November 2011 of health care fraud and filing false income tax returns. Jurors also 

convicted Antoine Johnson of illegal drug distribution. A judge sentenced Antoine Johnson 

to 12 years and seven months in prison and his mother, Lawanda Johnson, to seven years and 

three months in prison.

• Description of Scheme: The Johnsons ran four medical clinics in western Washington, 

giving patients massive amounts of illegitimate opioids and engaging in a systematic scheme 

to defraud Medicaid.

• Key Facts:

o With Dr. Johnson as the only medical doctor, the Johnson clinics had thousands of 

patients. The clinics dispensed excessive prescriptions for opioids, including 

oxycodone and methadone, to patients who Dr. Johnson did not examine. 

o Patients got their opioid prescriptions renewed for months and years at a time and 

often picked up prescriptions that Dr. Johnson had pre-signed.

o An audit of the clinic’s Medicaid billing practices triggered the criminal investigation. 

Prosecutors showed that the Johnsons consistently billed Medicaid for higher levels 

of service than actually provided, including for patients who were only in the clinic 

for drug refills.

Sources: 

1. Press Release, FBI, South Sound Doctor Sentenced to More Than 12 Years in Prison for 

Health Care Fraud, Tax Crimes, and Drug Distribution (Mar. 29, 2012), 

https://archives.fbi.gov/archives/seattle/press-releases/2012/south-sound-doctorsentenced-to-more-than-12-years-in-prison-for-health-care-fraud-tax-crimes-and-drugdistribution.
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Case Summary 98: Strippers, Bartenders, and Bouncers

• Defendant(s): Dr. Bruce Layne Baker

• Case Year: 2011

• State Missouri

• Case Status: Dr. Baker pleaded guilty in January 2011 in U.S. District Court in Kansas City 

to conspiracy to distribute a controlled substance and health care fraud. A judge sentenced 

him to six years and three months in prison. Authorities charged eight other defendants in 

related cases.

• Description of Scheme: Dr. Baker participated in a conspiracy to illegally distribute 

oxycodone and OxyContin, defrauding Medicaid, Medicare, and private insurers out of more 

than $214,000.

• Key Facts:

o Dr. Baker operated a medical business that made house calls to hotels and businesses, 

where he provided prescriptions for strippers, bartenders, and bouncers with no 

medical need for the medication.

o Dr. Baker issued prescriptions to co-conspirators for oxycodone and OxyContin that 

had no legitimate medical purpose. The co-conspirators then illegally sold the 

medications. In total, the conspiracy was responsible for distributing more than $1 

million worth of illicit opioids.

o Dr. Baker submitted fraudulent claims to Medicaid and other insurers for nearly 

83,000 pills, with the health care benefit programs paying him more than $214,000.

Sources: 

1. Press Release, U.S. Att’y Off., W.D. Mo., Independence Physician Sentenced for $1 

Million Drug-Trafficking Conspiracy (June 26, 2012), 

https://www.justice.gov/archive/usao/mow/news2012/baker.sen.html.
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Case Summary 99: Using Opioids Meant for Nursing Home Patients, While Bilking 

Medicaid 

• Defendant(s): Diana Van Etten

• Case Year: 2012

• State: Illinois

• Case Status: Van Etten pleaded guilty in June 2012 in U.S. District Court in East St. Louis 

to health care fraud. A judge sentenced her to two years of probation

• Description of Scheme: Van Etten diverted for her own use an opioid painkiller intended for 

residents of a nursing home, defrauding Medicaid.

• Key Facts:

o Van Etten worked as a nurse at the Caseyville Nursing home in Caseyville, Illinois.

o From 2010 to 2012, she signed out hydrocodone and claimed she was giving it to 

residents. Instead, she used the drug herself.

o Prosecutors said Van Etten caused 11 false claims to be submitted to the Illinois 

Medicaid program.

Sources: 

1. Former Nurse Gets Probation in Fraud, Telegraph Herald, Oct. 9, 2012.
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Case Summary 100: Medicaid, a Swiss Bank Account and “The Candy Shop”

• Defendant(s): Dr. Bharat Patel, Dr. Ramil Mansourov

• Case Year: 2017

• State: Connecticut

• Case Status: A federal grand jury in Bridgeport indicted both defendants in July 2017 on 

charges of conspiracy to distribute controlled substances, health care fraud, and money 

laundering. Both have pleaded not guilty.

• Description of Scheme: Prosecutors allege that Dr. Patel and Dr. Mansourov provided 

unlawful prescriptions for opioid painkillers to known drug dealers and addicts in exchange 

for cash. Some of the people paying Dr. Patel, prosecutors say, filled his prescriptions with 

Medicaid cards and then distributed the drugs.

• Key Facts:

o The doctors are family physicians who ran an urgent care facility in Norwalk, 

Connecticut. Prosecutors say some drug addicts referred to the practice as “The 

Candy Shop.”

o Prosecutors allege that Dr. Mansourov also defrauded Medicaid out of more than $4 

million through deceptive billing practices, including billing the program for at least 

500 non-existent visits to a single patient.

o Canadian authorities caught Dr. Mansourov trying to flee the United States after his 

indictment, and after he reportedly moved some of the stolen funds to a Swiss bank 

account.

Sources: 

1. Press Release, U.S. Att’y Off., Conn., Indictment Charges Doctors with Drug 

Distribution, Health Care Fraud and Money Laundering Offenses (July 26, 2017), 

https://www.justice.gov/usao-ct/pr/indictment-charges-doctors-drug-distribution-healthcare-fraud-and-money-laundering.

2. Jim Shay, Feds: ‘Candy Shop’ Doctor From Milford Allegedly Prescribed Opioids to 

Addicts, Dealers, New Haven Register, July 13, 2017, 

http://www.nhregister.com/connecticut/article/Feds-Candy-Shop-doctor-from-Milford11308504.php.

3. Rich Scinto, ‘Candy Shop’ Norwalk Doctors Indicted: Feds, Norwalk Patch, July 26, 

2017, https://patch.com/connecticut/norwalk/video-shows-candy-shop-doc-writingscripts-cash-feds.
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CONCLUSION

As the abuse of prescription opioids increasingly escalates into a national emergency, it is 

clear that the problem does not spring from any one cause. Millions who are not on Medicaid 

have been affected by the epidemic, which reaches into all levels of class, race and income. 

People get hooked on opioids for a variety of reasons—it can be something as innocuous as a 

routine surgery, a fall or a car crash.280 Medicaid is surely not the opioid epidemic’s sole cause, 

and this report is not intended to cast blame, especially on the millions of hard-working Medicaid 

recipients who are trying to forge a better life. Nor does this report question the good intentions 

of those who argue that expanding Medicaid is essential to stopping the opioid epidemic and 

treating its victims. Clearly, those who are truly suffering deserve treatment, and our nation must 

fight the scourge of illicit drugs.

But good intentions do not always lead to good policy. As this staff report highlights, 

overwhelming evidence shows that Medicaid has inadvertently contributed to the national 

tragedy that is the opioid epidemic, and has taken a toll that is playing out in courtrooms across 

the nation. Although this staff report examines only Medicaid in detail, other well-intended 

government programs, such as Medicare, may provide similar incentives for rational actors to 

engage in bad behavior with highly addictive opioids. These issues hold major ramifications for 

public policy, along with the nation’s health. They deserve serious consideration and a sober 

national debate, one we hope this staff report will help to initiate. The victims of this terrible 

epidemic deserve no less. 

 280 See Ctrs. for Medicare & Medicaid Srvs., Opioid Misuse Strategy 2016 (Jan. 5, 2017), available at

https://www.cms.gov/Outreach-and-Education/Outreach/Partnerships/Downloads/CMS-Opioid-Misuse-Strategy2016.pdf.