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Justice News

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

Thursday, May 26, 2016

Tioga County Physician And Drug Dealer Sentenced For Health Care Fraud

WILLIAMSPORT – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Dr. John Terry, age 65, and Thomas Ray, age 53, both of Wellsboro, were sentenced yesterday by Chief United States District Court Judge Christopher C. Conner in Williamsport.  Terry was sentenced to 20 months’ in federal prison and ordered to pay $4,762 in restitution to the state Department of Human Services for fraudulent prescriptions he wrote for Oxycodone, a Schedule II controlled substance. 

Ray was sentenced to 71 months’ in federal prison for possession with intent to distribute a controlled substance, which will run consecutively to 30 months of a Tioga County term consisting of 51 months to 15 years.  Ray is serving the state sentence on unrelated charges.

According to U.S. Attorney Peter Smith, in April 2013, Terry allegedly caused Medicare to be billed for fraudulent prescriptions of Oxycodone intended for David Hatch, age 28, of Addison, New York, but written in the name of Stephen Heffner, Jr., age 46, of Elkland.  Terry  knowingly wrote the prescription in the name of Heffner, knowing Heffner was not his patient,  and that the Oxycodone was intended for Hatch.   Medicare paid for the prescription received by Heffner but actually delivered to Hatch.

Terry also wrote prescriptions for Oxycodone and other narcotics for Ray, in reckless disregard of the fact that the drugs were not being used by Ray for legitimate medical purposes, but being diverted and sold on the street.  Medicaid paid for the medically unnecessary prescriptions written for Ray.

Heffner and Hatch were both previously sentenced to six months’ probation for theft from the Medicare Program. 

The investigation was initiated in June 2013 by the Drug Enforcement Administration (DEA) drug diversion agents and the Department of Health and Human Services Office of Inspector General.  During the execution of a federal search warrant at his office on July 8, 2013, Dr. Terry voluntarily agreed to surrender his medical license and his DEA registration.

The Pennsylvania State Police assisted in the investigation. Assistant United States Attorney Michelle Olshefski prosecuted the case.


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Health Care Fraud
Updated May 26, 2016