Georgia

June 23, 2010

U.S.Files Suit Against Augusta Medical Supply Company for Medicare Fraud (U.S. Attorney for the Southern District of Georgia)

Georgia - The United States has filed a civil False Claims Act complaint against Augusta Medical Systems (“Augusta Medical”) and its former owner, Julian Osbon, for allegedly submitting fraudulent claims to Medicare and receiving over $690,000 in improper payments.

United States Attorney Edward J. Tarver said on June 23, 2010, “We will ensure that those who do business with Medicare abide by all rules and regulations and those who receive Medicare reimbursement are, in fact, entitled to do so.  These particularly challenging economic times and Medicare dollars are scarce.  The U.S. Attorney’s Office will stand vigilant to protect federal health care programs from fraudulent practices.  As part of this commitment, we will ensure that those who do business with Medicare abide by all rules and regulations and those who receive Medicare reimbursement are, in fact, entitled to do so.”

The complaint alleges that for a period of more than one year, Augusta Medical billed Medicare for vacuum erection devices during a time in which it was not an authorized Medicare supplier.  Accordingly, it was not entitled to receive Medicare reimbursement during this period.  Osbon had quickly closed his former company, opened Augusta Medical and had hoped to obtain the necessary authorizations from Medicare.  However, Osbon allegedly disregarded the law and the advice of his own executive team and proceeded to bill Medicare for thousands of erection devices without having a valid billing number.  Vacuum erection devices are covered by Medicare.

The complaint was filed under the civil False Claims Act which provides for liability for triple damages and a penalty between $5,500 and $11,000 per claim for anyone who submits or causes the submission of a false or fraudulent claim to the United States.

The U.S. Attorney’s Office initially became aware of these allegations through a whistleblower.  The investigation is being handled by Special Agent David Graupner, Office of Inspector General of the Department of Health and Human Services and Kimberly Reinken, Investigator, with the U.S. Attorney’s Office. 

The United States is being represented by Assistant United States Attorneys’ Shannon Heath Statkus and Edgar D. Bueno.  For additional information, please contact First Assistant United States Attorney, James D. Durham at (912) 201-2547.

April 16, 2010

Rome Couple Charged with $30 Million Medicare & Medicaid Fraud Through Failure of Care at Three Nursing Homes (U.S. Attorney for the Northern District of Georgia)

Defendants Allegedly Bought Real Estate and Luxury Cars & While Residents Lacked Basic Necessities

ROME, GA - George D. Houser, 62, and his wife, Rhonda Washington Houser, 46, both of Rome, Georgia, were arraigned today on charges of conspiring to defraud the Medicare and Georgia Medicaid programs of more than $30 million. George Houser is also charged with failing to pay over his employees’ payroll taxes to the IRS and failing to file personal income tax returns.

 “These defendants are charged with spending Medicare and Medicaid money to buy cars and real estate while their nursing home residents went without basic necessities, such as food and medicines,” said United States Attorney Sally Quillian Yates.  “This case demonstrates this office’s continuing commitment to fight health care fraud, especially as it affects our most vulnerable citizens, the sick and the elderly. The services that were provided to the nursing home residents in this case were so far below Medicare and Medicaid standards that they were worthless and harmful.”  

Acting Special Agent in Charge Jeffrey C. Mazanec, FBI Atlanta, said, “For these two individuals to divert Medicare and Medicaid-derived healthcare funds away from vulnerable senior citizens in order to line their own bank account appears to show a level of greed that is very hard to understand.  The FBI will continue to do its part to ensure that the federal funds provided through Medicare and Medicaid are utilized in the manner in which they were intended and by those needing its services.”

IRS-Criminal Investigation Special Agent in Charge Reginael McDaniel said, “Our system of health care is founded on the trust of the public in its health care providers, especially those who provide care to our senior citizens.  The system was not designed for a few rogue individuals who violate that trust by using their health care business as a personal piggy bank.”

“Pure greed being placed above the well-being of our most vulnerable citizens will not be tolerated,” said Derrick L. Jackson, Atlanta Region Special Agent in Charge of the Federal Department of Health and Human Services-Office of Inspector General. “We will work closely with our law enforcement partners to bring justice to those who may have failed to provide high quality care to nursing home patients.”

According to United States Attorney Yates, the charges and other information presented in court: George and Rhonda Houser managed two nursing homes in Rome and a third one in Brunswick, Georgia, between 2004 and 2007.  The federal Medicare and Georgia Medicaid programs paid the Housers for nearly all of the expenses relating to the care of approximately 300 residents in their three nursing homes.  The indictment charges that beginning at least in 2004, and continuing until the State of Georgia closed the nursing homes in 2007, the Housers conspired to defraud the Medicare and Medicaid programs by submitting claims for payments when the care they provided to the nursing home residents were so inadequate that they were worthless, thereby defrauding the programs of the $30 million that the Housers received from those programs.  

The indictment charges several examples of the Housers’ fraudulent claims for payment, including:

• Inadequate staffing: The indictment charges that the Houser failed to maintain a nursing staff that was sufficient to take proper care of the residents, primarily because they started writing bad paychecks to their employees, which resulted in numerous staff resignations. The indictment alleges that the Houser hired a check-cashing service to cash their employees’ paychecks, and in December 2006, George Houser allegedly wrote that service a bad check for $120,000.   
• Failure to pay vendors: The Medicare and Medicaid programs require nursing homes to provide sufficient dietary, pharmaceutical, and environmental service to care for their residents’ needs.  The indictment alleges that the Houser failed to provide these services, in part by failing to pay Georgia Power and vendors of pharmacy and clinical laboratory services, medical waste disposal, trash disposal, and nursing supplies. They allegedly failed to repair washing machines and dryers, water heaters, air conditioners, and a leaking roof. The indictment alleges that the nursing homes suffered continual food shortages, and employees – whose own paychecks were bouncing – spent their own money to buy milk, b! read, and other groceries, so that residents would have something to eat.
• The diversion of funds: The indictment alleges that instead of providing sufficient care for the nursing home residents, the Houser diverted Medicare and Medicaid funds to their personal use.  The indictment alleges that the Housers used the nursing homes’ corporate bank account for personal expenses, such as Mercedes-Benz automobiles for their personal use.  The indictment alleges that from October 2004 until about October 2005, George Houser’s former wife was paid more than $71,000 by the nursing home, even though she was never an employee, and Rhonda Houser allegedly received at least $100,000 in checks or transfers from the nursing homes’ accounts for her personal use.
• Real estate purchases: The indictment alleges that the Housers used Medicare and Medicaid funds to purchase real estate in the Rome area, and a $1.3 million house in Atlanta for George Houser’s former wife.  Additionally, Rhonda Houser was a licensed real estate agent, and she allegedly received substantial commissions from these purchases.

According to the indictment, the Georgia Department of Human Resources (DHR) Office of Regulatory Services (ORS) received numerous complaints about the Houser’s nursing home from families, staff, and vendor companies. After giving the nursing homes many opportunities to correct deficiencies, the ORS closed the two nursing homes in Rome in June 2007, and it closed the Brunswick home in September 2007.

The indictment alleges that George Houser deducted federal income taxes from his employees’ paychecks, but he failed to pay over at least $806,305 to the IRS.  It also charges that George Houser failed to file personal income tax returns for 2004 and 2005.

The healthcare fraud conspiracy charged against both George and Rhonda Houser in Count One carries a maximum sentence of up to 20 years in prison and a fine of up to $250,000.  The charges that George Houser failed to pay over payroll taxes to the IRS each carry a maximum sentence of up to 5 years in prison and a fine of up to $10,000 per count.  The charges that George Houser failed to file tax returns carries a maximum sentence of one year in prison and a fine of $25,000.  In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

Members of the public are reminded that the indictment only contains charges.  The defendants are presumed innocent of the charges and it will be the United States' burden to prove their guilt beyond a reasonable doubt at trial.

This case is being investigated by Special Agents of the Federal Bureau of Investigation, the Internal Revenue Service, and the Department of Health and Human Services, and investigators with the United States Department of Justice.

Assistant United States Attorneys Glenn D. Baker, William G. Traynor and Michael J. Brown are prosecuting the case.

For further information please contact Sally Q. Yates, United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney's Office, at (404) 581-6016.  The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is www.justice.gov/usao/gan.

April 5, 2010

U.S. Joins Lawsuit Against Waycross, Georgia, Medical Center & Physician For Alleged False Claims Billings to Medicare and Medicaid (Civil Division)

Washington - The United States has intervened in a False Claims Act lawsuit alleging that Satilla Health Services Inc., dba Satilla Regional Medical Center, and Dr. Najam Azmat submitted claims for medically substandard and unnecessary services to Medicare and Medicaid, the Justice Department announced today.  Specifically, the complaint alleges, among other things, that the defendants submitted claims for medical procedures performed by Dr. Azmat in Satilla’s Heart Center that the physician was neither qualified nor properly credentialed to perform.  As a result, at least one patient died and others were seriously injured.

The complaint states that Satilla placed Dr. Azmat on staff even after learning that the hospital where he previously worked had restricted his privileges as a result of a high complication rate on his surgical procedures.  The complaint also states that after Dr. Azmat joined the Satilla staff, the hospital management allowed him to perform endovascular procedures in the hospital’s Heart Center even though he lacked experience in performing such procedures and did not have privileges to perform them.  Endovascular procedures are complex medical procedures that are performed within arteries and veins accessed by a puncture site in the skin and require specialized training.

According to the complaint, at least one of Dr. Azmat's endovascular patients died as a result of his lack of training and competence.  The complaint alleges that Dr. Azmat perforated the patient's renal artery, causing her to bleed to death.  Dr. Azmat allegedly did not even recognize that he had perforated the patient’s artery and failed to take appropriate action to address the complication.

The complaint further states that the nurses in Satilla’s Heart Center recognized that Dr. Azmat was incompetent to perform endovascular procedures and repeatedly raised concerns with hospital management. Despite the nurse’s complaints and Dr. Azmat’s high complication rate, Satilla’s management continued to allow him to perform endovascular procedures and to bill federal health care programs for these services.

“In this case, the defendants allegedly not only provided substandard and unnecessary medical services - they caused harm to patients,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice.  “We are committed to bringing to justice those who put profits ahead of patient health and safety.”

This lawsuit was originally filed by Lana Rogers, a nurse who formerly worked in Satilla’s Heart Center. Under the qui tam, or whistleblower, provisions of the False Claims Act, a private citizen can file an action on behalf of the United States and receive a portion of any recovery.  The act permits the United States to recover three times the amount of its losses, plus civil penalties.

“The fraud alleged in this case not only caused financial loss to the government, but sadly also endangered the lives of federal health care program beneficiaries,” said U.S. Attorney Edward Tarver.

The investigation in this case is being conducted by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Southern District of Georgia, and the Office of Inspector General of the Department of Health and Human Services.

The United States’ intervention is part of the government’s emphasis on combating health care fraud.  One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $2.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $3 billion.

March 12, 2010

Miami Couple Sentenced to Imprisonment in $1 Million Health Care Fraud Conspiracy (U.S. Attorney for the Southern District of Georgia)

Savannah, GA. - Edward J. Tarver, United States Attorney for the Southern District of Georgia, announced on March 12, 2010, that Fernando Alfonso and Rita Mateu, both residents of Miami, Florida, were recently sentenced by Chief United States District Judge William T. Moore, Jr. based on their convictions for Conspiracy to Commit Health Care Fraud in violation of Title 18, United States Code, Section 371. Alfonso was sentenced to 30 months imprisonment, while Mateu was sentenced to 46 months imprisonment.  Alfonso and Mateu will be required to serve a three-year period of supervised release following completion of their prison sentence.

The case against Alfonso and Mateu resulted from a joint investigation by the Federal Bureau of Investigation (“FBI”) in conjunction with the Health and Human Service Office of Inspector General (“HHS-OIG”). The evidence at the guilty plea hearing for both defendants showed that from December 2007 through April 2008, Alfonso and Mateu conspired to bill approximately $1 million in fraudulent infusion claims to Medicare for Towne Lake Rehab and Medical Center, LLC, a clinic located in Woodstock, Georgia, which provided infusion therapy services to Medicare beneficiaries.  The evidence showed that Mateu and Alfonso, with the assistance of others, conspired to defraud Medicare by: recruiting Medicare beneficiaries from local homeless shelters by offering these homeless people food or money in exchange for their

Medicare information; stealing the identities of local medical doctors in order to bill Medicare; and, using the stolen identities and Medicare beneficiary information to submit over $1 million dollars of phony infusion therapy bills to Medicare for medical services that were never actually provided. 

United States Attorney Tarver stated, “This Office will continue to work closely with our federal partners to ensure that those who target our Medicare program are themselves targets of criminal prosecution.”  Mr. Tarver praised the cooperative efforts of Special Agents Mark A. Alig and Joshua Hayes of the FBI, along with Special Agent David Graupner of HHS-OIG, who led the investigation of this matter.  Mr. Tarver noted that the indictment against Alfonso and Mateu arose out of Operation Redex Infuscam, a major investigation by the FBI and HHS-OIG into fraudulent infusion billings to Medicare in and around the Southern District of Georgia. 

The Government was represented by Brian T. Rafferty, Chief of the Criminal Division for the United States Attorney’s Office for the Southern District of Georgia. 

December 14, 2009

Miami Man Sentenced to More Than a Decade in Federal Prison for Million Dollar Medicaid Fraud (U.S. Attorney for the Northern District of Georgia)

Atlanta, GA - VARIAN V. SCOTT, 36, of Miami, Florida, was sentenced today by United States District Judge Charles A. Pannell, Jr. to federal prison on charges of health care fraud and conspiracy to commit health care fraud. The charges arose out of scheme to present forged doctors’ prescriptions for high-dollar cancer and HIV medications to dozens of Atlanta-area pharmacies using the identities of Georgia Medicaid recipients, causing the cost of the medications to be billed to the Georgia Medicaid program, and resulting in an approximately $1.1 million loss to state and federal taxpayers.

Georgia Attorney General Thurbert Baker said, “The defendant and his cronies not only defrauded Georgia’s taxpayers, but they endangered the patients who were on the receiving end of these re-sold prescriptions.  These medications must be handled and stored with extreme care to preserve their effectiveness, and street sellers aren't known for running hygienic operations.  Prison is the appropriate place for Scott, and today's prison sentence sends a clear message that law enforcement will protect taxpayer resources and preserve the integrity of these critical treatment programs.”

FBI Atlanta Special Agent in Charge Gregory Jones said, “Mr. Scott will now sit in prison for many years hopefully thinking about the crimes he committed and their full impact on the people that could have used the help that was, instead, diverted to his bank account through greed.  Medicaid fraud and healthcare fraud in general cannot and will not be tolerated and the FBI recognizes these crimes for what they are, acts of greed and indifference to others.”

Dr. Rhonda Medows, Commissioner of the Georgia Department of Community Health, which administers Georgia Medicaid, said,  “This case is a perfect example of what government agencies can accomplish when they share information and partner on key initiatives. With an increasing number of people in need of health care, it is important that we continue to work with our partners to ensure that we safeguard taxpayer dollars.”

SCOTT was sentenced to 12 years in federal prison, to be followed by 3 years of supervised release.  There is no parole in the federal justice system.  SCOTT was also ordered to pay $1,142,720.67 in restitution to Georgia Medicaid.  SCOTT was convicted of these charges on October 5, 2009, after a four-day jury trial.

According to Acting United States Attorney Sally Q. Yates, the charges, and other information presented in court: SCOTT directed and funded a health care fraud conspiracy between September 2005 and April 2006. SCOTT and his cousin, HEZRON D. COLLIE, 29, of Atlanta, Georgia, bought blank doctors’ prescription pads from insiders at Emory University’s Winship Cancer Institute and two other doctor’s offices, one in Atlanta and one in Florida.  SCOTT and COLLIE then bought names, dates of birth, and Medicaid numbers of dozens of Georgia Medicaid recipients, and forged approximately 164 doctors’ prescriptions for Neupogen, a chemotherapy drug, and multiple medications used to treat HIV, using the patient Medicaid information.  A one-month supply of Neupogen costs approximately $10,000. 

SCOTT and COLLIE then presented the forged prescriptions along with the patient information to CVS, Publix, Walgreens, Kroger, and Eckerd pharmacies throughout the Atlanta area.  SCOTT and COLLIE also recruited a pharmacist at one of the Publix pharmacies, and a pharmacy technician at one of the Kroger pharmacies, to help facilitate the scheme.  The pharmacies billed approximately $1.1 million to Georgia Medicaid for the cost of the medications that SCOTT and COLLIE fraudulently acquired. The evidence at trial also showed that after obtaining the medications, SCOTT and COLLIE transported them to South Florida for sale on the so-called “gray market,” in which there is significant demand for such medications.

SCOTT and COLLIE were indicted on December 16, 2008.  On June 4, 2009, COLLIE pleaded guilty to one count of conspiracy and one count of health care fraud charged in the indictment, and to a criminal information charging him with one count of health care fraud for a related scheme in which he participated between May and June of 2008, and cooperated with authorities.  COLLIE’s sentencing is scheduled to take place before Judge Pannell tomorrow, Tuesday, December 15, 2009, at 10:00 a.m.  The Publix pharmacist also cooperated with authorities and pleaded guilty to related charges in Gwinnett County Superior Court on January 13, 2009.  The pharmacy technician was not charged in the scheme but cooperated with law enforcement.  The pharmacies and the doctors also cooperated in the investigation.

The case was the culmination of a joint investigation conducted by the Federal Bureau of Investigation, Georgia Bureau of Investigation, Georgia Drugs & Narcotics Agency, Georgia Department of Community Health, and the Georgia Medicaid Fraud Control Unit. Valuable assistance was also provided by the Georgia State Patrol, Twiggs County Sheriff’s Office, Clayton County Sheriff’s Office, Gwinnett County Police Department, and the Florida Department of Law Enforcement.

The case was prosecuted by Assistant United States Attorneys Bernita B. Malloy and David M. Chaiken, and Senior Assistant Attorney General Nancy B. Allstrom of the Georgia Attorney General’s Office, who was designated a Special Assistant United States Attorney for the case.

For further information please contact Sally Q. Yates, Acting United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney’s Office, at (404) 581-6016

The Internet address for the Home Page for the U.S. Attorney’s Office for the Northern District of Georgia is www.usdoj.gov/usao/gan.

November 5, 2009

Atlanta Radiologist Indicted for Fraudulent Medical Practices (U.S. Attorney for the Northern District of Georgia)

Atlanta, GA -  DR. RAJASHAKHER P. REDDY, 39, of Atlanta, Georgia, the President of the Atlanta-based company “Reddy Solutions, Inc.” (“RSI”), was arraigned on Nov. 5, 2009, on federal charges of wire fraud, mail fraud, health care fraud, and obstruction of justice.  REDDY was arraigned before United States Magistrate Judge C. Christopher Hagy and was released on bond. 

 “This case shows a clear violation of the public's trust.  Any time false claims are submitted for payment, our nation's health insurance programs and beneficiaries suffer. Ensuring the integrity of health care programs remains a top priority for the Inspector General and our law enforcement partners,” said HHS/Office of Inspector General Acting Special Agent in Charge Carl D. Bocchicchio.

According to Acting United States Attorney Sally Quillian Yates, the charges and other information presented in court: REDDY was indicted by a federal grand jury on November 3, 2009.  The indictment alleges that his company, RSI, provided radiologist coverage – interpreting x-rays and other films – to various hospitals in the Southeast that otherwise typically lacked full-time radiology coverage. Hospital staff took the film, which REDDY and other RSI radiologists would access remotely via computer.  The RSI radiologist was supposed to review the film, prepare and sign a report expressing his or her medical conclusions, and transmit it electronically back to the hospital.  REDDY was both the President of the company as well as one of the principal radiologists supposedly interpreting film and preparing reports.

However, the indictment alleges that from May 2007 through January 2008, REDDY signed and submitted thousands of reports in his name without even reviewing the films that were the subjects of the reports.  Rather, he had non-physician technicians known as Radiology Practice Assistants review the film and prepare the reports.  In some cases, REDDY directed the RSI staff to simply sign for him, and transmit the report as it he had prepared it. In other cases, REDDY accessed the system for the purpose of signing and submitting the reports. The indictment alleges that the majority of the time he never looked at and analyzed the underlying films, and that the reports signed by him therefore did not bear his medical conclusions or those of any other doctor.  The indictment does not allege fraud in connection with the reports signed by any other RSI doctor.

The charges carry a maximum sentence of up to 20 years in prison and a fine of up to $250,000 for each count.  In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

Members of the public are reminded that the indictment only contains charges.  The defendant is presumed innocent of the charges and it will be the government's burden to prove the defendant's guilt beyond a reasonable doubt at trial.

This case is being investigated by Special Agents of the Federal Bureau of Investigation and the U.S. Department of Health and Human Services, Office of Inspector General.

Assistant United States Attorneys Justin S. Anand and Kurt R. Erskine are prosecuting the case.

For further information please contact Sally Q. Yates, Acting United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney's Office, at (404) 581-6016. 

More information on the U.S. Attorney's Office for the Northern District of Georgia --www.usdoj.gov/usao/gan.

October 4, 2009

Miami Man Convicted in Million Dollar Medicaid Fraud (U.S. Attorney for the Middle District of Georgia)

ATLANTA, GA - A federal jury on Oct. 5, 2009 returned a guilty verdict against VARIAN V. SCOTT, 36, of Miami, Florida, in a health care fraud scheme that used forged doctors’ prescriptions for high-dollar cancer and HIV medications and caused the cost of those medications to be billed to the Georgia Medicaid program, resulting in an approximately $1.1 million loss to state and federal taxpayers.

Acting United States Attorney Sally Quillian Yates said of the verdict, “The Georgia Medicaid Fraud Control Unit confirms that the conviction of this defendant and his co-conspirator are the first convictions in the State of Georgia for a fraud scheme in which Medicaid was defrauded through stolen and forged prescriptions and stolen patient information. Identity theft, wherever it occurs, must be stopped. State and federal agencies in Georgia are geared up to pursue and stop identity thieves from defrauding our health care programs, and from victimizing others, including innocent patients and doctors, who are hurt by such schemes.”

Georgia Attorney General Thurbert Baker said of the case, “The defendant and his cronies harmed not only the taxpayers by defrauding the state Medicaid program, but they caused potential harm to the individuals who were on the receiving end of these re-sold prescriptions. These cancer-fighting medications must be handled and stored with extreme care to preserve their effectiveness, and street sellers aren't known for running hygienic operations or for making sure they properly handle these sensitive medications. At the end of the day, this verdict sends a clear message that this type of fraud will result in significant punishment in order to protect taxpayer resources and to preserve the integrity and efficacy of these cancer treatment programs.”

FBI Atlanta Special Agent in Charge Gregory Jones said, “Now, more than ever, it is imperative that federal funds within the health care arena be directed towards those that need it. Those that choose to exploit and defraud these government programs also are depriving many people in need of the medical care that these programs provide. The FBI will continue to work with its law enforcement partners and industry experts in pursuing these types of criminal activities and exposing those individuals responsible who, by their actions, demonstrate little or no compassion for their fellow man but instead are driven by greed.”

According to Acting United States Attorney Yates, the charges, and other information presented in court: On Oct. 5, 2009 the jury found SCOTT guilty of running a health care fraud conspiracy between September 2005 and April 2006. SCOTT and his cousin, HEZRON COLLIE, 29, of Atlanta, Georgia, bought blank doctors’ prescription pads from insiders at Emory University’s Winship Cancer Institute and two other doctor’s offices, one in Atlanta and one in Florida. SCOTT and COLLIE then bought names, birthdates, and Medicaid numbers of dozens of Georgia Medicaid patients, and forged approximately 164 doctors’ prescriptions for “Neupogen,” a chemotherapy drug, and multiple medications used to treat HIV, using the patient Medicaid information. A one-month supply of Neupogen costs approximately $10,000. SCOTT and COLLIE then presented the forged prescriptions along with the patient information to CVS, Publix, Walgreens, Kroger, and Eckerd pharmacies throughout the Atlanta area. SCOTT and COLLIE also recruited a pharmacist at one of the Publix pharmacies, and a pharmacy technician at one of the Kroger pharmacies, to help facilitate the scheme.

According to the evidence, SCOTT and COLLIE picked up the drugs from the pharmacies, removed the pharmacy adhesive labels using lighter fluid, and then transported the drugs to south Florida, where SCOTT had a connection who bought them at 30% of their wholesale cost. Expert testimony at trial established that there is significant demand for the medications that SCOTT and COLLIE fraudulently acquired. Testimony established that there is currently a multi-billion dollar gray market for stolen, illegally obtained, or counterfeit pharmaceuticals, and that such medications often end up traveling through the stream of commerce back to shelves of legitimate pharmacies.

SCOTT and COLLIE were indicted on December 16, 2008. On June 4, 2009, COLLIE pleaded guilty to one count of conspiracy and one count of health care fraud charged in the indictment, and to a criminal information charging him with one count of health care fraud for a related scheme in which he participated between May and June of 2008. The Publix pharmacist cooperated with authorities, pleaded guilty to related charges in Gwinnett County Superior Court on January 13, 2009, and awaits sentencing. The pharmacy technician was not charged in the scheme but cooperated with law enforcement. The pharmacies and the doctors also cooperated in the investigation.

The pharmacies billed approximately $1.1 million to Georgia Medicaid for the cost of the medications that SCOTT and COLLIE fraudulently acquired.

SCOTT could receive a maximum sentence of 10 years in prison and a fine of up to $250,000 on each of the 21 counts. Sentencing is scheduled for Monday, December 14, 2009 at 10:00 a.m., before United States District Judge Charles A. Pannell, Jr. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders. A sentencing date for COLLIE has not yet been set.

The case is the culmination of a joint investigation conducted by the Federal Bureau of Investigation, Georgia Bureau of Investigation, Georgia Drugs & Narcotics Agency, Georgia Department of Community Health, and the Georgia Medicaid Fraud Control Unit. Valuable assistance in this case has also been provided by the Georgia State Patrol, the Twiggs County Sheriff’s Office, the Clayton County Sheriff's Office, and the Gwinnett County Police Department.

The case is being prosecuted by Assistant United States Attorneys Bernita Malloy and David M. Chaiken, and Senior Assistant Attorney General Nancy B. Allstrom of the Georgia Attorney General’s Office, who has been designated a Special Assistant United States Attorney for the case.

For further information please contact Sally Q. Yates, Acting United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney’s Office, at (404) 581-6016. The Internet address for the Home Page for the U.S. Attorney's Office for the Northern District of Georgia is www.usdoj.gov/usao/gan.

August 5, 2009

Doctor Sentenced to Federal Prison for Illegally Prescribing Drugs (U.S. Attorney for the Middle District of Georgia)

MACONG.F. — “Pete” Peterman, III, Acting United States Attorney, announced that Dr. Spurgeon Green was sentenced today before the Honorable C. Ashley Royal, United States District Judge for the Middle District of Georgia. Green was sentenced to 360 months (30 years) without the possibility of parole followed by five years of supervised release.

Dr. Spurgeon Green, Jr., was convicted on November 6, 2008, after a seven week trial on forty-six (46) counts of illegally distributing and dispensing schedule II controlled substances which prescriptions were not for legitimate medical purposes and were outside the usual course of professional practice. One count included the additional element of causing serious bodily injury resulting in the death of a patient. Green and physician’s assistant Dorothy Mack were convicted of operating a “pill mill.” Evidence showed they dispensed what was described as a “cocktail” of narcotics to include Oxycodone and other scheduled (prescription only) drugs upon patient requests in Perry, Georgia from the year 2000 to July, 2003. Jack Kelly Joseph, a pharmacist, aided Green in the distribution of these Schedule II narcotics, filling Green’s prescriptions at a rate which was ten (10) times higher than the United States average.

Peterman stated that: “This case represents the hard work of many law enforcement officers to protect the public against a doctor who abused the trust of the community. Through his actions, Dr. Green preyed on the addictions of patients and ruined not only their lives but, in several instances, the lives of their families and loved ones who had to deal with the complications of the addictions.”

The case as investigated by the Houston County Sheriff’s Office and Drug Enforcement Administration (DEA), Diversion Division. The case was prosecuted by Assistant United States Attorneys Jennifer Kolman, Verda Colvin and Stewart Brown.

Questions concerning this matter should be directed to Sue McKinney, Public Affairs Specialist, United States Attorney’s Office, at (478) 621-2602.