Former Doctor Charged With Conspiring To Defraud The FDA And Health Care Fraud

William J. O’Brien III, 50, of Philadelphia, Pennsylvania was charged in a superseding  indictment, unsealed today, with conspiring to defraud the Food and Drug Administration (‘FDA”) and a separate conspiracy to commit health care fraud, announced United States Attorney Zane David Memeger.  O’Brien, a former doctor of osteopathic medicine, was previously charged in July 2015 with operating a “pill mill” from his medical offices.  The defendant awaits trial on those earlier charges.

Today’s indictment alleges that defendant O’Brien and others made misrepresentations to the FDA in order to obtain clearance for a so-called hyperbaric chamber that O’Brien marketed under the name Hyperox 101.  A hyperbaric chamber is a sophisticated medical device in which patients breathe 100% pure oxygen for a prolonged period in a pressurized environment.  To achieve a therapeutic effect, the chamber is pressurized to at least 1.4 atmospheres below sea level.  The pressure creates a biochemical reaction that increases oxygen absorption into the blood.  A hyperbaric chamber for treating patients must be constructed using pedigree steel and certified as a pressure vessel for human occupancy. 

According to the indictment, Hyperox 101 as constructed did not meet these standards; rather, it was built by welding together pieces of a used propane tank.  The indictment charges that defendant O’Brien knew of the deficiencies in Hyperox 101, but passed it off as a medical device by submitting false documentation to the FDA.  The indictment alleges that, due to its substandard construction, Hyperox 101 did not provide patients with the therapeutic benefits associated with hyperbaric oxygen treatment, but instead posed potential risks to patients. 

The indictment charges that defendant O’Brien used the unapproved device to defraud Medicare and other health benefit programs.  From in or around March 2007 through in or around August 2011, O’Brien obtained millions of dollars based on fraudulent claims that he caused to be submitted to Medicare and IBC, among other health care benefit programs.  O’Brien caused fraudulent claims to be submitted of approximately $15 million for medically unnecessary and potentially unsafe treatments.  O’Brien obtained reimbursement from Medicare and other insurers of approximately at least $4.2 million based on the fraudulent claims.

If convicted, defendant O’Brien faces substantial prison terms and fines, and is subject to criminal forfeiture proceedings.

The case was investigated by the Federal Bureau of Investigation, FDA Office of Criminal Investigations, and the Department of Health and Human Services - Office of the Inspector General.  It is being prosecuted by Assistant United States Attorney M. Beth Leahy.