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Press Release

Federal Jury Convicts Pharmacist, Physician’s Office Manager And Three Drug Dealers In “Pill Mill” Operation

For Immediate Release
U.S. Attorney's Office, Northern District of Texas

DALLAS — A federal jury returned guilty verdicts late this afternoon against five individuals convicted for their roles in a pill mill conspiracy that operated in Dallas since 2010.  The trial began Monday, January 27, 2014, in Dallas federal court before U.S. District Judge Barbara M. G. Lynn.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Specifically, the jury convicted each of the below-listed defendants on one count of conspiracy to unlawfully distribute controlled substances:

Lisa L. Hollier, 44, of Sunnyvale, Texas

Jose L. Martinez, 54, of Flower Mound, Texas

Joesephis Austin, 60, of Dallas

Patricia A. Bryant, 59, of Dallas

Walter R. Hudspeth, 62, of Dallas

According to evidence in the case, Austin, Bryant and Hudspeth operated as “dealers” who would recruit “patients,” often from homeless shelters, and drive them in groups to Padron Wellness Clinic (PWC), located at 1000 Emerald Isle Drive in Dallas.  Co-conspirators physician Nicolas Padron, 54, of Garland, Texas, and Martinez opened PWC in the fall of 2010.  PWC operated not as a legitimate medical facility, but as a place to unlawfully obtain controlled substances, such as hydrocodone.

Dr. Padron and Martinez, the PWC’s business manager, charged cash only for office visits in which Dr. Padron would do little to no physical examination and prescribe a “cocktail” of controlled substances, including hydrocodone, a Schedule II controlled substance and alprazolam, a Schedule IV controlled substance.  Generally, they charged $250 for a new patient office visit and $185 for an established patient visit.

Typically, the dealers set appointments on PWC’s schedule and brought in multiple patients at a time.  The dealers escorted the patients into the clinic, coordinated with Martinez and paid cash for the patients they brought.  Dr. Padron would sometimes see two or more patients at a time in one exam room.  Patient visits were short in duration and patients normally left with a 30-day prescription of 120 pills of hydrocodone and 30-90 units of alprazolam.  Most of the patients were diagnosed by Dr. Padron with lower back pain and anxiety, without regard of their true condition; thus these prescriptions were medically unnecessary and outside the scope of professional practice. 

Dr. Padron, who is awaiting sentencing, testified at trial.  He pleaded guilty in September 2013 to his role in this conspiracy.  He faces a maximum statutory penalty of 10 years in federal prison and a $500,000 fine on this conviction.

Hollier, a licensed pharmacist, owned and operated Urban Independent Pharmacy (UIP), located at 6300 Samuell Blvd., in Dallas.  She and Dr. Padron coordinated a procedure for PWC’s staff to fax prescriptions for the controlled substances to UIP. 

Once Dr. Padron issued the prescriptions, these dealers would drive the patients to UIP to get the prescription filled.  Typically they did this in groups and Hollier had large amounts of hydrocodone and alprazolam in pre-filled bottles ready each day to handle the large groups of dealers and their patients.  These dealers furnished the money to pay for the narcotics.  Sometimes they paid Hollier directly for the prescriptions.  After Hollier filled the prescriptions, the patients would give the dealers the pills which they would sell on the street for a profit.

Dr. Padron has also pleaded guilty, in a separate and unrelated case, to one count of conspiracy to commit health care fraud.  A sentencing date is pending in that case also.

The case was investigated by the Dallas Health Care Fraud Prevention and Enforcement Action Team (HEAT) Strike Force, which includes the U.S. Department of Health and Human Services - Office of Inspector General (HHS-OIG), the FBI and the Texas Attorney General’s Medicaid Fraud Control Unit.  Assistant U.S. Attorneys Kate Pfeifle and J. Nicholas Bunch are prosecuting.  

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the HEAT Strike Force, see:

Updated June 22, 2015