News and Press Releases

Las Vegas Physician Charged with Unlawful Prescription Drug Distribution and Structuring Cash Deposits to Avoid Tax Laws

November 3, 2011

Las Vegas, Nev. – A local physician has been charged with selling prescriptions for large quantities of highly addictive prescription drugs without medical necessity and depositing the cash proceeds in a manner designed to avoid tax laws, announced Daniel G. Bogden, United States Attorney for the District of Nevada.

Sebastian M. Paulin, Jr., M.D., 65, of Las Vegas, is charged in a criminal indictment dated October 26, 2011, with six counts of distribution of controlled substances, four counts of money laundering, and one count of structuring transactions to evade reporting requirements. Paulin was arrested in Las Vegas on Wednesday, November 2, 2011, and appeared before U.S. Magistrate Judge Cam Ferenbach and was released on a personal recognizance bond pending trial.

"Our office will continue working aggressively with our federal, state and local law enforcement partners to attack the growing problem of prescription drug abuse," said U.S. Attorney Bogden. "A major part of our effort has included the targeting and investigation of local physicians and pharmacists who are writing and selling prescriptions that are not being issued for a legitimate medical purpose or in the usual course of professional practice. Since January 2010, our office has filed federal criminal charges against over 70 individuals, including three doctors and a pharmacist, for unlawfully distributing highly addictive prescription painkillers. Our federal and local law enforcement partners will continue to prioritize these unlawful prescription drug distribution cases and continue working to shut down dangerous unlawful "pill mill" operations."

According to the indictment, between March 25, 2010, and August 2011, Dr. Paulin, who maintained a medical practice at 620 E. Twain in Las Vegas, allegedly sold large numbers of prescriptions for oxycodone, hydrocodone and alprazolam (Xanax), to customers who did not medically need them. With the assistance of others, Dr. Paulin deposited the cash earned from his medical practice into two separate personal bank accounts in a manner designed to avoid federal currency transaction reporting laws. Despite writing large numbers of prescriptions for controlled substances, Dr. Paulin had no specialized training or certifications in pain management or anesthesiology. The indictment alleges that Dr. Paulin made or assisted in making 69 cash deposits totaling $689,291 into two bank accounts for the purpose of evading federal tax laws.

If convicted, Dr. Paulin faces up to 20 years in prison and a fine of up to $1,000,000. The government is also seeking forfeiture of $1.2 million.

The abuse of prescription drugs is a major, growing drug problem in Nevada and the United States. In the past month, more than six million Americans have used prescription drugs for non-medical reasons. In the past year, one in seven teenagers abused prescription drugs to get high. In Clark County there are more pharmaceutical related deaths than methamphetamine, heroin and cocaine related deaths combined.

This case is being investigated by the Nevada High Intensity Drug Trafficking Area (Nevada HIDTA) Pharm-Net Task Force, including the DEA, IRS Criminal Investigation, Las Vegas Metropolitan Police Department, Henderson Police Department, and Nevada Highway Patrol, and prosecuted by Assistant U.S. Attorneys Crane M. Pomerantz and Cristina Silva.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

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