Pike County Physician Indicted For Unlawful Distribution Of Controlled Substances, Money Laundering, And Tax Evasion

SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today the indictment of a Pike County physician, Fuhai Li, age 51, on charges of unlawfully distributing controlled substances without a legitimate medical purpose, money laundering, and tax evasion.  Li was taken into custody today and will appear later today before United States Magistrate Judge Joseph F. Saporito, Jr. in Wilkes-Barre for his initial appearance.

According to U.S. Attorney Peter Smith, the 24 count indictment by a Federal Grand Jury in Scranton on July 19, unsealed today, alleges that, beginning in 2011 and continuing into 2015, Li unlawfully provided prescriptions for excessive quantities of oxycodone and other narcotics to individuals who he knew were not seeking the drugs for a legitimate medical purpose.  One charge specifically alleges that Li unlawfully distributed a controlled substance and caused the death of one of his patients. 

Li is also charged with 15 counts of alleged unlawful distribution of controlled substance to different persons repeatedly over extended periods between 2011 and 2015.  He is also charged with unlawfully distributing and dispensing a controlled substance to a pregnant individual and with opening and maintaining premises at two locations in Milford, Pennsylvania, for the purpose of distributing controlled substances outside the usual course of professional practice and without legitimate medical purpose.

Li allegedly sought and received payments in cash from recipients of the unlawfully distributed controlled substance.  Many of the recipients were from outside of Pennsylvania.  Some of the recipients, in turn, distributed the unlawfully obtained controlled substance to others in exchange for money.

Li’s activities were allegedly not in the usual course of medical practice in one or multiple ways, as stated in the indictment, including:

• inadequate verification of the patient’s medical complaint;

• cursory or no medical examinations by LI;

• inadequate patient medical history and no follow-up verification;

• incomplete or inadequate mental or physical examinations;

• treating patients with highly addictive controlled substances while failing to consider other treatment options;

• lack of, or inadequate, diagnostic testing;

• increasing the patients’ dosages over time unnecessarily; and

• prescribing inappropriate combinations of drugs to patients.

Li is charged with three counts of tax evasion for the years 2011 through 2013.  The indictment alleges that during the execution of federal search warrants by Drug Enforcement Administration (DEA) agents at his office and residences in January 2015, more than $1,000,000 in cash was seized.  The indictment alleges that for the years 2011 through 2013, Li evaded federal taxes in an amount in excess of $300,000. 

Li is also charged with money laundering in connection with a $385,572 wire transfer mortgage payment on an East Stroudsburg residence and a $158,699 certified check for the purchase of a property in Milford, both allegedly involving properly derived from Li’s unlawful distribution of controlled substances.

According to the Indictment, Li is subject to forfeiture to the United States government, of any and all proceeds derived from unlawful activity as a result of the offenses alleged in the indictment, including U.S. currency and properties located in both Pike and Monroe counties.

Currently, Li continues to maintain a Pennsylvania medical license.  He surrendered his DEA registration at the time the search warrants were executed.

“The allegations against Li are serious.  He allegedly distributed a controlled substance that resulted in the death of one of his patients, which is troubling as physicians have an ethical obligation to uphold standards of medical practice,” said Gary Tuggle, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division.  “In 2015, 3,383 people died across Pennsylvania from drug overdoses; 53% of those overdose deaths were the result of opioids such as oxycodone.  The DEA will remain vigilant in pursuing investigations against physicians that violate their positions of trust in our communities.” 

Akeia Conner, Internal Revenue Service, Special Agent in Charge, said “Today’s indictment was achieved through the tireless efforts of all the agencies involved.  When a physician knowingly abandons his oath and distributes controlled substances for financial gain instead of legitimate medical purpose, the Internal Revenue Service, Criminal Investigation will provide the financial expertise in tracking and accounting for the proceeds of this unlawful activity.

The charges stem from a coordinated investigation initiated by Drug Diversion Agents located in Scranton, DEA, Scranton, and the Internal Revenue Service – Criminal Division, Scranton.  Prosecution is assigned to Assistant United States Attorney Michelle Olshefski.

Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.

A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.

In this case, the maximum penalty under the federal statute for the unlawful distribution of controlled substances is life imprisonment. The money laundering charges carry a maximum term of 20 years’ imprisonment, per count. The maximum penalty for tax evasion is 5 years’ imprisonment, per count.  Each charge also carries a fine and a term of supervised release following any period of incarceration.  Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.

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