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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of Pennsylvania

FOR IMMEDIATE RELEASE
Wednesday, June 29, 2016

Jury Finds Philadelphia Doctor Guilty of Running Pill Mill And Causing A Death Through Illegal Distribution

PHILADELPHIA – A federal jury, late yesterday, found William J. O’Brien III, a doctor of osteopathic medicine, guilty of causing a death through the illegal distribution of a controlled substance and a number of other charges related to the operation of a “pill mill,” announced United States Attorney Zane David Memeger.

“The illegal prescribing of opioid pain medications has led to an epidemic of overdose deaths and heroin addiction throughout the country,” said Memeger.  We are pleased that the jury saw through Dr. O'Brien's clown act at trial and concluded that for the sake of profit he distributed opioid pain killers for no legitimate medical purpose, and that he caused the death of a patient through his illegal prescribing practices.”

"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," said Special Agent-in-Charge Nick DiGiulio, with HHS-OIG. "We look forward to the day he receives a long prison term.  The Department of Health and Human Services Office of Inspector General will continue to work with our partners to protect HHS programs and the beneficiaries from harm."

"The defendant’s behavior and the resulting harm inflicted on our communities is nothing short of disgraceful," said FBI Special Agent-in-Charge William Sweeney. "Our communities are facing a crisis involving prescription and opioid abuse which is only made worse by insiders, like the defendant, who used his degree and position of trust to benefit himself by victimizing vulnerable individuals. He was an integral player in this drug distribution conspiracy. Amid an unprecedented opioid epidemic, the defendant deliberately breached his solemn oath to ‘do no harm,’ and instead dispensed oxycodone and methadone like candy – which he knew would end up on the street – even contributing to a death. I am grateful for the hard work and professionalism demonstrated by the agents and prosecutors who conducted this investigation, and I encourage the public to report any concerns regarding prescription abuse to law enforcement.”

Specifically, the jury returned guilty verdicts on two counts of conspiracy to distribute controlled substances; one count of distribution of controlled substances resulting in death; 117 counts of distribution of controlled substances, that is, oxycodone, methadone, and amphetamines; money laundering conspiracy; conspiracy to commit bankruptcy fraud; and making false statements under oath in a bankruptcy proceeding.  The defendant was acquitted of four counts of distribution of controlled substances. A sentencing hearing is scheduled for October 5, 2016.  Defendant O’Brien faces a mandatory minimum sentence of 20 years in prison with a maximum sentence of life.  The co-conspirators, all of whom pleaded guilty, face substantial prison terms and fines, and are subject to criminal forfeiture proceedings.

Charged in the conspiracy with O’Brien were members of the Pagans Motorcycle Club.  The trial evidence showed that between March 2012 and January 2015, O’Brien dispensed, and his coconspirators unlawfully obtained for resale, approximately 378,914 pills which contained 10 mg, 15 mg or 30 mg of oxycodone; and approximately 160,492 methadone pills. The estimated street value of the controlled substances sold by the conspiracy was estimated at approximately $5 million. O’Brien generated for himself an estimated $2 million in cash proceeds from the drug trafficking conspiracy.

As proven at trial, O’Brien conspired with members or associates of the Pagans to distribute large quantities of dangerous and addictive controlled substances for profit.  O’Brien and his co-conspirators developed a scheme whereby so-called “patients” were recruited, would pay O’Brien $200 cash, and would receive medically unnecessary prescriptions for controlled substances for resale. With cash-paying “patients,” O’Brien could conceal money from creditors and the United States Bankruptcy Court where he had filed for Chapter 11 protection for his company WJO, Inc., a group of medical practices which he owned. After filling the prescriptions they got from O’Brien, the “patients” would turn the pills over to the co-conspirators who would sell the pills to drug dealers. Certain controlled substances, such as oxycodone (30 mg), were in high demand. One oxycodone 30 mg pill could sell for $25 on the street.

Distribution of Controlled Substances Resulting in Death

The jury found O’Brien guilty of intentionally distributing, outside the usual course of professional practice and for no legitimate medical purpose, controlled substances to a particular individual that resulted in that individual’s death.  Defendant O’Brien wrote prescriptions for oxycodone, methadone, and cyclobenzaprine, a muscle relaxer, to Joseph Ennis, 36, of Bucks County, after Mr. Ennis had initially sought treatment from the defendant following a car accident.  On December 17, 2013, O’Brien prescribed oxycodone and methadone without a legitimate medical purpose, which combined with the cyclobenzaprine, led to Mr. Ennis’ death.  Mr. Ennis died five days later on December 22, 2013 from the combination of these substances.

Conspiracy to Engage in Money Laundering and Bankruptcy Fraud

The trial evidence showed that O’Brien generated at least approximately $20,000 per week in illegal cash proceeds from his drug dealing activities.  He did not record the cash receipts in his bank account or in the books of his company “Bill O’Brien LLC.”  O’Brien directed employees to shred the “cash slips” at the end of each business day.  On a daily basis, O’Brien transported thousands of dollars in cash in his briefcase from his office to the residence that he shared with codefendant Elizabeth Hibbs, who was his former wife. O’Brien and Hibbs, who were married in January 2010, officially divorced on October 15, 2012.  The decree and order of divorce filed in the Court of Common Pleas for Philadelphia County cited “irretrievable breakdown” as the cause for the dissolution of the marriage.  Notwithstanding an “irretrievable breakdown” in their relationship, defendants O’Brien and Hibbs lived together, worked together, and by all outward appearances, appeared to continue to act as husband and wife.

Hibbs, who pleaded guilty, deposited the illicit cash proceeds into various bank accounts, at different banks, and into safety deposit boxes titled in her name or held jointly with one of her daughters.  This elaborate mechanism concealed the fact that the source of the cash was O’Brien’s illegal drug distribution operation.

As the trial evidence showed, O’Brien filed for bankruptcy protection for WJO, Inc. in November 2010.  Hibbs, who was married to O’Brien when the bankruptcy petition was filed, was, at various times, the Chief Operating Officer and the Chief Executive Officer for WJO, Inc. In July of 2012, O’Brien and Hibbs were fired from WJO, Inc., by the Trustee appointed by the United States Bankruptcy Court. O’Brien and Hibbs diverted assets from WJO, Inc. to their personal accounts and to accounts controlled by them. In addition, O’Brien and Hibbs concealed other assets from the Trustee and from creditors of WJO, Inc. Both also knowingly made a false statement under oath during the bankruptcy proceedings.

The case was investigated by the Federal Bureau of Investigation, the Food and Drug Administration 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 Attorneys Mary Beth Leahy and David E. Troyer.

 

Topic: 
Healthcare Fraud
Updated June 29, 2016