Baltimore, Maryland – Chief U.S. District Judge Catherine C. Blake sentenced Michael Resnick, a/k/a Michael Reznikov, age 54, today to three years in federal prison followed by three years of supervised release for conspiring to distribute oxycodone and alprazolam, and for structuring currency deposits. Chief Judge Blake sentenced Resnick’s wife, Alina Margulis age 49, both from Brooklyn, New York, to a year and a day in prison followed by three years of supervised release for the drug conspiracy and for money laundering. Chief Judge Blake also entered an order that Resnick and Margulis forfeit $280,000, the amount of illicit profits they received from the scheme.
The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Don A. Hibbert of the Drug Enforcement Administration, Baltimore District Office; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Chief James W. Johnson of the Baltimore County Police Department; and Baltimore County State’s Attorney Scott Shellenberger.
“State and federal authorities are working to shut down ‘pain clinics’ that are really just fronts for criminals who divert pharmaceutical drugs,” said U.S. Attorney Rod J. Rosenstein. “Michael Resnick and his wife Alina Margulis operated a clinic in which they hired physicians to prescribe opioid drugs to people who had no medical need for the drugs. Pharmaceutical pills can be just as harmful as illegal drugs when they are used without proper oversight.”
“Those who facilitate the illegal use of controlled substances negatively impact our entire community,” said Thomas Jankowski, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office. “Today they are being held accountable and will not financially benefit from their illegal activity.”
According to their plea agreements and court documents, in late 2010 and early 2011, Resnick and Margulis traveled to Florida to learn how to operate a pain clinic under the direction of co-defendant Gerald Wiseberg, who owned and operated Total Care Medical Center in Deerfield Beach, Florida. Wiseberg told Resnick that operating a pain clinic would be a lucrative business and that no medical experience was required.
By early 2011, Resnick, Margulis and Wiseberg agreed to open a similar pain management clinic in Maryland. In March 2011, the defendants opened Healthy Life in
Owings Mills. Healthy Life later moved to larger space in Timonium, Maryland, until it was closed on May 15, 2012. Both Healthy Life locations attracted large and unruly crowds. Customers caused disturbances outside the locations, using narcotics and engaging in narcotics transactions. Over 80% of the customers who received a prescription from Healthy Life were from out of state, and approximately 97% of the customers received at least one prescription for oxycodone.
Wiseberg hired physician William Crittenden to serve as one of the first medical directors at Healthy Life because Wiseberg believed that Crittenden would write prescriptions for narcotics to customers without a legitimate medical need. Crittenden resigned as the medical director in August 2011 when the Maryland Board of Physicians—the agency authorized to issue licenses to practice medicine in Maryland and to discipline licensees—initiated an investigation into Crittenden’s prescribing practices. This investigation ultimately led to revocation of Crittenden’s medical license.
In September 2011, Resnick, Margulis and Wiseberg hired another medical director, Daniel Alexander, because they believed that Alexander would likewise write drug prescriptions to customers without a legitimate medical need. Margulis told Alexander that Healthy Life only prescribed pills and did not offer any alternative therapies.
To increase profits, Alexander spent a limited amount of time with each patient in order to see a very large number of patients each day. From September 2011 to March 2012, Alexander issued prescriptions to 627 patients on 946 separate office visits. Of those 946 visits, the customer received a prescription for oxycodone 97% of the time, and a prescription for alprazolam 23% of the time, despite Alexander’s knowledge that many of the customers did not have a legitimate medical need for the drugs.
Following the business model of Total Care, Resnick, Margulis and Wiseberg, who were not doctors, established the standard operating procedures for Healthy Life, including which drugs the prescribing physician could prescribe and the maximum dosage amounts of these drugs. Healthy Life also accepted cash payments in exchange for providing prescriptions for large amounts of oxycodone, alprazolam and other drugs, to customers without a legitimate medical need for the drugs.
Also to maximize profits, they also encouraged the prescribing physicians to prescribe the maximum amount of oxycodone to each customer. Margulis and Resnick handled complaints by Healthy Life customers who were unhappy with the prescriptions they received, particularly when a medical provider might prescribe less oxycodone than the customer wanted. In those instances, Margulis and Resnick would ask the prescribing medical provider to reconsider, knowing it would lead the provider to give the customer what the customer wanted.
Margulis and Resnick received 28% of the net profits from Healthy Life, obtaining a total of $280,000. Wiseberg received 30% of the net profits. Margulis kept the accounting books for the business. From June 2011 to April 2012, Margulis wrote monthly checks of $12,000 to an entity Wiseberg controlled. Additionally, Resnick and Margulis paid Wiseberg $165,000 in cash in 2011 for Wiseberg’s 30% share.
In order to evade currency transaction reporting requirements, Resnick and others at his direction deposited cash accumulated from customers in amounts less than $10,000 into several bank accounts for Healthy Life. Resnick admitted that he engaged in a pattern of illegal structuring involving more than $100,000 in a 12-month period.
Gerald Wiseberg, a/k/a Gerry Wiseberg and Jerry Wiseberg, age 82, of Boca Raton, Florida pleaded guilty on October 15, 2015 to his participation in the conspiracy and was sentenced on June 7, 2016 to three years in prison. Chief Judge Blake also entered an order that Wiseberg forfeit $273,000.
A federal jury convicted William Crittenden III, age 52, of Kensington, Maryland on February 19, 2016 of conspiring to distribute oxycodone and alprazolam, and eight separate counts of unlawfully distributing oxycodone. Crittenden was acquitted on 15 of the drug distribution counts. Crittenden awaits sentencing.
Daniel Alexander, age 53, of Pikesville, Maryland, pleaded guilty on October 27, 2015 to his participation in the conspiracy. On July 6, 2016, Alexander filed a motion to vacate his guilty plea. The motion is pending.
United States Attorney Rod J. Rosenstein commended DEA, IRS-CI, Baltimore County Police Department and Baltimore County State’s Attorneys’ Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Jason D. Medinger and Peter J. Martinez, who prosecuted this Organized Crime Drug Enforcement Task Force case.