Doctor indicted for health care fraud and conspiracy to distribute steroids, HGH and painkillers
A 185-count indictment was unsealed today charging a Pittsburgh physician with conspiracy to distribute anabolic steroids, human growth hormone and controlled substances including oxycodone and oxycontin, as well as health care fraud, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office.
Dr. Richard A. Rydze, age 62, was named in all 185 counts. Also indicted for related conduct are William Zipf, age 56, James Hatzimbes, age 42, of Pittsburgh.
“Doctors have a tremendous power in prescribing medication, and the vast majority use that power to dispense medicine to help sick people,” Dettelbach said. “This doctor is accused of using his prescription pad like a personal ATM, doling out steroids, painkillers and other medicine for his own gain.”
“Greed and power often drives criminal activity as evidenced by this indictment, where a physician decided to abuse his medical privileges in order to line his pockets,” Anthony said. “The FBI will continue to aggressively pursue doctors who illegally divert prescription medications.”
Various conduct charged in the indictment spans from 2005 through 2012.
Rydze is the sole owner of Optimal Health Center LLC (OHC), located at 425 First Avenue, Pittsburgh, and opened in September 2007. Prior to OHC, Rydze was involved with other physicians in a joint medical practice known as Diagnostic Medical Associates, according to the indictment.
Hatzimbes owned and operated HSE Salon and Wellness Center, aka HSE Anti-Aging & Wellness Center (HSE), formerly located in a strip mall at 2851 Saw Mill Run, Pittsburgh. It was located in the same strip mall where Hatzimbes owned and operated Hatz’s Solar Eclipse Tanning, according to the indictment.
ANEWrx was a pharmacy operated by William Sadowski and located in Pittsburgh.
In count one, Rydze and Hatzimbes are charged with conspiracy to distribute controlled substances – anabolic steroids, from between September 2007 through March 2011.
The steroids included Stanozolol, Nandrolone Decanoate, Testosterone Enanthate, Testosterone Cypionate, Oxandrolone and Testosterone. The defendants conspired to unjustly enrich themselves to causing the distribution of the steroids for unauthorized uses such as bodybuilding and athletic performance enhancement, according to the indictment.
Rydze and Hatzimbes scheduled “steroid clinics” at HSE nearly every other Saturday. Rydze would frequently and falsely diagnose clients as having hormone imbalance, pituitary deficiency or adrenal insufficiency and then prescribe steroids and human growth hormone, according to the indictment.
Rydze and Hatzimbes had a financial relationship in which Rydze charged clients $75 for each visit at HSE, which Rydze and Hatzimbes split equally. Additionally, Hatzimbes received prescriptions for anabolic steroids and human growth hormone from Rydze on numerous occasions, which were filled at ANEWrx, despite no corresponding office appointments, notations or diagnosis to justify the prescriptions, according to the indictment.
In early 2007, Rydze met with Sadowski, the co-owner of ANEWrx, and they agreed Rydze would be paid a commission on every prescription for human growth hormone, anabolic steroids and others specific medications filled at ANEWrx. Sadowski then provided Rydze with a list of ANEWrx’s price for each prescription. They agreed to mark up the price for Rydze’s patients, with Sadowski then kicking back additional money to Rydze, according to the indictment.
Commission reports prepared by ANEWrx show that between August 2007 and January 2011, Rydze received $301,407 in commission payments. For commissions paid on mark-ups for Rydze’s patients, ANEWrx wrote one check to Rydze for $6,845 and three to OHC for $25,395. Additionally, ANEWrx made 14 deposits into OHC’s account totaling $146,465, according to the indictment.
In counts two and three, Rydze and Hatzimbes are charged with distributing controlled substances – anabolic steroids.
In count four, Rydze and Hatzimbes are charged with conspiracy to unlawfully distribute human growth hormone.
In counts five and six, Rydze is charged with unlawfully distributing human growth hormone.
In counts seven and eight, Rydze and Hatzimbes are charged with unlawfully distributing human growth hormone.
In count nine, Rydze is charged with health care fraud.
It was part of the scheme that Rydze submitted medical claims to Highmark Insurance wherein he diagnosed more than 90 adult patients with pituitary dwarfism. Pituitary dwarfism is the result of an isolated deficiency of (human) growth hormone. It is a pediatric diagnosis, and children with pituitary dwarfism fail to grow, have dwarfed limbs and do not reach five feet tall by adulthood, according to the indictment.
However, according to Pennsylvania Department of Motor Vehicle records, all of the individuals diagnosed by Rydze with pituitary dwarfism are above five feet tall, and at least 40 of the 90 patients are taller than five feet nine inches, according to the indictment.
For example, Rydze submitted medical claims to Highmark Insurance under the wrong insurance code, 253.3, pituitary dwarfism, for Hatzimbes, who at age 40 was six feet tall, according to the indictment.
In another example, he diagnosed a patient identified at AJB with pituitary dwarfism, despite the fact that AJB was five feet eleven inches tall at age 61, a former karate competitor and bodybuilder who had no physical characteristics consistent with pituitary dwarfism, according to the indictment.
In count 10, Rydze and Zipf are charged with conspiracy to distribute controlled substances.
From March 28, 2007 through January 2012, Rydze and Zipf conspired to distribute Schedule II controlled substances, including Oxycodone, Oxymorphone, Oxycontin and Opana, according to the indictment.
Beginning in 2007, Rydze prescribed the painkillers to Zipf. Later in the year, Zipf requested Rydze put the prescriptions in the names of other people, including Zipf’s relatives. At times, Zipf requested Rydze write two prescriptions for him at the same time and leave the date blank on one so Zipf could fill it in later. Zipf took the prescriptions to numerous different pharmacies in order to avoid detection, according to the indictment.
In counts 11-138, Rydze is charged with acquiring and obtaining possession of a controlled substance by misrepresentation, fraud, forgery, deception and subterfuge.
From on or about February 4, 2005 through October 2011, Rydze obtained more than 21,000 pills of Hydrocodone-Acetaminophen, commonly referred to as “Vicodin ES,” by calling in more than 200 prescriptions to Pittsburgh-area pharmacies. He did so by fraudulently and without lawful authority using a DEA registration number that was issued to another physician, and did so without the consent or knowledge of that physician, according to the indictment.
In counts 139-169, Rydze and Zipf are charged with health care fraud. Rydze wrote prescriptions for Oxycodone, Oxycontin, Oxymorphone and Opana in the names of Zipf’s relatives who had health insurance, according to the indictment.
In counts 170-184, Rydze is charged with health care fraud.
From January 2010 through January 2012, Rydze called in prescriptions to Pittsburgh-area pharmacies at the request of a woman identified as KK. Rydze put some of the prescriptions in the name of a relative of KK who had medical insurance, despite knowing the prescriptions were not intended for use by that relative. He called in approximately 9,600 Vicodin ES pills in the name of KK or her family members over two years, according to the indictment.
In count 185, Rydze is charged with obstruction of justice.
Rydze has been suspended from prescribing medication by the DEA.
Because of doctor-patient relationships Rydze had in the Western District of Pennsylvania, this investigation is supervised by the FBI’s Cleveland Office and is being prosecuted by the United States Attorney’s Office for the Northern District of Ohio.
The case is being prosecuted by Assistant United States Attorneys Carol M. Skutnik and Matthew B. Kall following investigation by the Federal Bureau of Investigation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.