The U.S. Attorney’s Office places a high priority on criminal and civil enforcement in cases involving health care fraud and unauthorized health care benefits payments, as well as related activities such as fraud against the elderly and prescription drug fraud. The office works on these matters with the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG), the Federal Bureau of Investigation, the Internal Revenue Service, the Drug Enforcement Administration, the Food and Drug Administration (FDA), the Office of the Pennsylvania Attorney General, District Attorney’s Offices within the Middle District, the Pennsylvania Department of State and the NEPA Insurance Fraud Task Force.
Anyone with information concerning suspected health care fraud or irregularities should contact the HHS-OIG at 1-800-HHS-TIPS (1-800-447-8477) and/or the U.S. Attorney’s Office at 717-221-4482, attention Assistant U.S. Attorneys Kim Douglas Daniel (Criminal) or D. Brian Simpson (Civil), Health Care Fraud Coordinators.
Criminal Cases - Health Care Fraud
Dr. Kurt Moran
A 66-year-old Scranton doctor was indicted on September 15, 2020, on allegations that beginning in December 2014 and continuing into 2017, Moran conspired with others to pay and receive bribes in exchange for prescribing the drug Subsys (sublingual fentanyl) to his patients. Subsys is a transmucosal immediate release fentanyl (TIRF) drug. It is approved by the Food and Drug Administration (FDA) only for use in cancer patients suffering from breakthrough cancer pain. It is alleged that Moran was paid approximately $140,000 over a two year period to prescribe Subsys to his patients for pain not associated with cancer. In order to conceal and disguise that kickbacks and bribes were being paid to Moran to prescribe Subsys, Insys falsely designated the payments to Moran as “honoraria” for purportedly providing educational presentations regarding Subsys. Moran is also charged with multiple counts of unlawfully distributing Subsys to 13 patients and two counts of unlawfully prescribing Schedule II controlled substances, including oxycodone and fentanyl, which resulted in the death of a 35 year old man and a 32 year old woman. Moran contracted with Insys Therapeutics, Inc. in 2014 to participate in the Insys Speaker Program (ISP), which was used as a vehicle to pay doctors and other clinicians to prescribe Subsys off-label. In fact, the ISP was used as a way to funnel money to doctors like Moran under the guise of an “honorarium” appearing to be legitimate. In reality, many of the speaker programs were merely social gatherings at high-end restaurants with no educational presentation whatsoever. Most also lacked an appropriate audience of peer-level doctors with a professional reason to be educated about Subsys. Moran allegedly was selected by Insys to participate in the sham speaker program because he consistently ranked as one of the top prescribers of opioid medications in Pennsylvania, including fentanyl. Moran allegedly was paid as an Insys speaker as long as he continued to prescribe Subsys and the more prescriptions written by Moran for Subsys – and the higher the dose – the more speaking opportunities were awarded to him and the more money he made. It is further alleged that Moran prescribed millions of micrograms of the sublingual fentanyl spray to patients with no cancer diagnosis and not suffering from breakthrough cancer pain.
Michael Timothy Buchanan
Michael Timothy Buchanan, age 68, of Indiana, was sentenced to 37 months's imprisonment on February 26, 2020 and ordered to pay $1,493,629 in restutition. Buchanan pleaded guilty on May 14, 2019, to defrauding a trust fund established by the Association of Pennsylvania State College and University Faculties (APSCUF) out of $1,493,629. Buchanan executed a scheme to defraud the Pennsylvania Faculty Health and Welfare Fund (The Fund) between 2007 and 2017 by his submission of false, inflated invoices for the services his company, Actuaries, Consultants and Administrators, Inc. (ACA), provided The Fund in connection with the processing of dental and vision claims submitted by members of the APSCUF Union.
Belinda Dietrich, a 63-year-old Marysville, Cumberland County woman was sentenced on October 28, 2019, to one year and a day of imprisonment for forging the signature of a dentist on 164 prescriptions for opioid drugs. Dietrich, a former receptionist for a solo dental practitioner forged the signature of her employer on a blank prescription form for oxycodone pills for her mother, a Medicare beneficiary, who was not a patient of the dentist. Dietrich then had the prescription filled at a Harrisburg area pharmacy and received 24 oxycodone pills, who then converted the drugs to her own use. The pharmacy billed the cost of the oxycodone pills to Medicare, which paid the claim.
On June 5, 2018, Dr. Fuhai Li, a 53-year-old physician licensed by the Commonwealth of Pennsylvania and authorized to prescribe Schedule II controlled substances, was found guilty by a federal jury of unlawfully prescribing oxycodone and other opioids to 23 former patients, including a Honesdale woman who died as a result of using the pills and a pregnant woman who gave birth to an opioid-dependent baby.
Li owned and operated the Neurology and Pain Management Center in Milford, Pike County, Pennsylvania. Between August 2011 and January 2015, Dr. Li wrote 26,985 prescriptions for Schedule II controlled substances, 99.37% of which were written for opioids. This included 18,115 prescriptions for oxycodone, of which 12,129 were written for oxycodone 30 milligrams, the highest dosage available in short acting oxycodone. Other opioids frequently prescribed by Dr. Li included methadone, OxyContin, hydrocodone and hydromorphone. Li repeatedly falsified patient medical records and made material omissions in those records in an effort to legitimize the unlawful prescriptions.
Former patients testified that they became addicted to opioids as a result of Li’s prescriptions. One patient testified she had sex with Li on almost every visit to his office during a four-year period and several former patients testified that they earned money by selling drugs prescribed to them by Li and used part of that money to buy heroin to support their addiction.
The jury also convicted Li of using two medical offices for the purpose of unlawfully prescribing opioids. Li was also convicted of tax evasion for the tax years 2011, 2012, and 2013 for underreporting his taxable income for those years by more than $800,000.
The jury’s verdict also included the forfeiture to the United States of $1,030,960 in cash that was seized from Li’s two residences; $1,036,079.36 seized from various bank accounts; real property located at 200 3rd Street, Milford (Li’s medical office); and real property located at 4005 Milford Landing Drive, Milford.
On April 3, 2019, Li was sentenced to 330 months' imprisonment.
Dr. Raymond Kraynak, age 60, of Mt. Carmel, Pennsylvania, was indicted by a federal grand jury on December 20, 2017. The 19-count indictment alleges that Kraynak, who operated two offices in Mt. Carmel and Shamokin, Pennsylvania, known as Keystone Family Medicine Associates, prescribed approximately 2.7 million units of oxycodone, hydrocodone, oxycontin and fentanyl to approximately 2,838 patients between January 2016 through July 31, 2017. During that time period, he was the top prescriber of those drugs in the Commonwealth of Pennsylvania. It’s also alleged that Dr. Kraynak caused the death of five of his patients between 2013 and 2015 by unlawfully distributing and dispensing controlled substances to them that ultimately led to their death. Trial is tentatively scheduled for September 7, 2021.
Dr. Robert L. Stremmel, age 74, of York, Pennsylvania, was indicted on June 27, 2018, by a federal grand jury with dispensing opiates and amphetamines outside the course of a professional practice and not for a legitimate medical purpose. The indictment alleges that Stremmel was licensed to practice medicine in the Commonwealth of Pennsylvania and had a medical office in York. It is alleged that between July 2013 and January 2018, Stremmel distributed to one person more than 21,000 tablets of oxycodone and dextroamphetamine-amphetamine, both Schedule II controlled substances. The indictment also charges Stremmel with prescribing Xanax, codeine, and Tramadol, Schedule IV and V controlled substances. It is alleged that Stremmel intentionally prescribed these controlled substances outside the usual course of professional practice and not for a legitimate medical purpose. The indictment further charged Stremmel with making a false statement related to a health care matter for allegedly falsifying medical records in conjunction with a Medicare claim. Stremmel pleaded guilty on October 1, 2018, and was sentenced on October 9, 2019 to two years probation.
Physician's Mobile X-Ray Company
In August 2020, Physician’s Mobile X-Ray agreed to pay the United States $49,759 to resolve potential liability under the False Claims Act. Physician’s Mobile X-Ray is based in Harrisburg, Pennsylvania and provides mobile imaging services, including x-rays, ultrasounds and cardiac services. Physician Mobile X-Ray improperly billed Medicare for the transportation component of X-Ray equipment when x-ray services were provided to more than one Medicare beneficiary at the same location during the same trip. While Medicare will reimburse providers for a transportation component associated with mobile imaging services, that transportation component should be apportioned when more than one patient at the same location receives an x-ray during the same visit. The United States alleged that Physician’s Mobile X-Ray failed to apportion its charges between 2014 and 2019, leading to overcharges to Medicare.
Savage Family Pharmacy
In June 2020, Savage Family Pharmacy located in Waynesboro, PA, agreed to pay the United States $180,480 in civil penalties for allegedly failing to comply with recordkeeping and other requirements of the Controlled Substances Act. Between 2015 and 2019, Savage Family Pharmacy did not adequately monitor the conduct of its employees, and failed to keep complete and accurate inventories and records regarding the receipt and dispensing of Schedule II controlled substances, including but not limited to oxycodone and hydrocodone. These alleged violations enabled the altering of incoming inventory counts, as well as the altering of dispensed counts of the controlled substances over an extended period of time. Inventories, when conducted, were not reconciled with the perpetual log. Additionally, pages of the perpetual log were removed, allegedly, by an employee diverting the controlled substances. As a result of Savage Family Pharmacy’s alleged actions, tens of thousands of doses of controlled substances went unaccounted for and were potentially diverted for illicit purposes.
Dr. Charles Gartland
While conducting an internal audit, WellSpan Health determined that its employee, Dr. Charles Gartland was writing Schedule II prescriptions in the name of his wife and daughter. WellSpan disclosed its findings to the DEA. The investigation determined that Gartland was writing the prescriptions for his personal use and neither his wife nor daughter were aware of his scheme. While there was no identifiable loss to a federal insurance program, Gartland’s conduct violated the Controlled Substance Act. Following an ability to pay analysis, the USAO settled with Gartland for $15,000 in April 2019.
Dr. Robert Ettlinger
On December 7, 2018, Dr. Robert Ettlinger, a primary care doctor formerly practicing in Millersburg, Pennsylvania, agreed to pay $45,000 to settle allegations that he violated the federal Controlled Substances Act by prescribing schedule II opioid controlled substance medications, which were issued for no legitimate medical purpose. Dr. Ettlinger wrote 185 opioid prescriptions to six of his patients between 2013 and 2015, which were issued with no legitimate medical purpose and outside the usual course of his professional practice, resulting in civil violations of the Controlled Substances Act. Dr. Ettlinger cooperated with the DEA’s investigation. As part of the settlement, Dr. Ettlinger entered into a Memorandum of Agreement with the DEA under which he agreed to comply with heightened compliance requirements for prescribing controlled substances.