SAN FRANCISCO – Paul D. Woodward was arraigned yesterday for allegedly operating a scheme to defraud Medicare and allegedly distributing controlled substances, announced United States Attorney Melinda Haag, Office of Inspector General – Health and Human Services Special Agent in Charge Ivan Negroni, and Drug Enforcement Administration Special Agent in Charge Jeffrey J. Fitzpatrick.
A federal grand jury in San Francisco indicted Paul D. Woodward and Karen Kramer on December 4, 2014. The indictment remained under seal until December 11, 2014, when Kramer was arraigned on the charges. According to the Indictment, Woodward, 71, and Kramer, 54, both of Napa, Calif., were charged with conspiring to defraud Medicare by having Woodward write prescriptions to Kramer, at her request, for controlled substances, including fentanyl; Woodward falsely representing that the prescriptions were prescribed in the usual course of professional medical practice and for a legitimate medical purpose; and both Woodward and Kramer causing claims for those prescriptions to be submitted to Medicare for payment. Between January 2006 and June 2010, Medicare allegedly paid over $1.3 million for false and fraudulent prescriptions prescribed by Woodward to Kramer. Woodward is also charged with prescribing controlled substances, including oxycodone, hydromorphone, and hydrocodone, outside the usual course of professional medical practice and not for a legitimate medical purpose, to other patients.
Kramer was arrested on December 10, 2014, in Napa, and made her initial appearance in federal court in San Francisco on December 11, 2014. Kramer was ordered detained and is currently being held in the custody of the United States Marshal’s Service. Kramer will next appear before the Honorable Laurel Beeler, United States Magistrate Judge, on January 8, 2015, at 10:30 a.m. Woodward voluntarily appeared and made his initial appearance yesterday before the Honorable Bernard Zimmerman, United States Magistrate Judge. Woodward was released on a $100,000 secured bond. Both defendants are scheduled to appear on January 29, 2015, at 1:30 p.m., for an initial appearance before the Honorable William H. Orrick, U.S. District Court Judge.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted of the conspiracy to commit health care fraud or health care fraud charges, Woodward and Kramer face a maximum sentence of 10 years imprisonment and a fine of twice the gross gain or loss for each violation of 18 U.S.C. § 1347 and 1349, plus restitution if ordered. If convicted of the distribution of a controlled substance charges, Woodward faces a maximum sentence of 20 years imprisonment and a fine of $1 million. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Denise Marie Barton is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Maryam Beros, Trina Khadoo, and Bridget Kilkenny. The prosecution is the result of an investigation by Office of Inspector General – Health and Human and the Drug Enforcement Administration, with the assistance of the California Department of Insurance, the Napa County Sheriff’s Office, and the Napa Police Department.