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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of Illinois

Friday, March 11, 2016

Chicago Psychiatrist Who Took Kickbacks to Prescribe Mental Health Medication Sentenced to Nine Months in Federal Prison

CHICAGO — A Chicago psychiatrist was sentenced today to nine months in federal prison for accepting nearly $600,000 in fees and benefits from pharmaceutical companies in exchange for prescribing a medication to his patients. 

DR. MICHAEL J. REINSTEIN prescribed the drug Clozapine to thousands of elderly and indigent patients in Chicago-area nursing homes and hospitals.  In exchange for his efforts, the pharmaceutical companies provided Dr. Reinstein with consulting fees and entertainment expenses, including meals, tickets to sporting events, and all-expense-paid vacations.  At one point in the early 2000s, Dr. Reinstein was the largest prescriber of the drug to Medicaid recipients in the United States.

Dr. Reinstein, 72, of Skokie, pleaded guilty last year to one count of violating the federal Medicare and Medicaid Anti-Kickback Statute.  In addition to the nine-month sentence, U.S. District Judge Sharon Johnson Coleman also imposed forfeiture of $592,000, and ordered Dr. Reinstein to perform 120 hours of community service.

“Reinstein abused his position of public trust as a physician and took advantage of the faith and trust of his mentally ill patients in order to enrich himself,” Assistant U.S. Attorney Eric S. Pruitt argued in the government’s sentencing memorandum.

Clozapine is an anti-psychotic medication with potentially serious side effects, particularly for elderly patients.  While Clozapine has been shown to be effective for treatment-resistant forms of schizophrenia, it is also known to cause a potentially deadly decrease in white blood cells, as well as seizures and inflammation of the heart muscle.

Dr. Reinstein has been a psychiatrist in the Chicago area since 1973, with an office in Chicago’s Uptown neighborhood.  According to his plea agreement, he prescribed Clozaril, the brand-name version of Clozapine, long after less expensive, generic versions were available, because the manufacturer of Clozaril paid him thousands of dollars to promote the drug at speaking engagements. 

After the deal with the brand-name manufacturer ended in 2003, Dr. Reinstein agreed to switch his patients to the generic version, but only after its manufacturers, Teva Pharmaceuticals USA Inc. and IVAX Pharmaceuticals LLC, agreed to pay him a consulting fee and finance a Clozapine research study performed by a Reinstein-affiliated entity.  At Dr. Reinstein’s request, Teva also agreed to hire an individual whom Dr. Reinstein described as an important source of patient referrals.  Between July 2006 and July 2011, Teva paid the individual approximately $112,000 to enter white blood cell data into a national Clozapine registry.

Reinstein previously agreed to pay the United States and the State of Illinois $3.79 million to settle a civil lawsuit.  Teva and IVAX also paid the United States and the State of Illinois $27.6 million to settle civil allegations that they violated state and federal False Claims Acts.

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Lamont Pugh III, Special Agent-in- Charge of the Chicago Regional Office of the U.S. Department of Health and Human Services Office of Inspector General.

The government is represented by Mr. Pruitt.

Healthcare Fraud
Updated March 11, 2016