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Press Release

Grand Rapids Physician Pays Over $135,000 For Allegedly Using Foreign, Unapproved Botox to Treat Medicare Beneficiaries

For Immediate Release
U.S. Attorney's Office, Western District of Michigan

          GRAND RAPIDS – U.S. Attorney for the Western District of Michigan Mark Totten today announced that Derek Lado, D.O., and his Grand Rapids practice, Elite Medical Spine & Musculoskeletal Center PLLC (Elite), have agreed to pay $135,871.84 to resolve allegations that they violated the False Claims Act by using foreign, unapproved Botox to treat Medicare beneficiaries and then billing Medicare for those services.

          “Patients deserve the confidence that their medical practitioners are following the rules to keep them safe,” said U.S. Attorney Mark Totten.  “If you cut corners by using foreign drugs that have not been approved by the FDA as safe and effective to treat our Medicare population, there will be consequences.”

          The United States alleged that Dr. Lado and Elite treated patients with Botox (onabotulinumtoxinA), a drug administered by injection that the U.S. Food and Drug Administration (FDA) has approved for a variety of treatments.  However, beginning in August 2018, Dr. Lado and Elite began to purchase and use foreign, unapproved onabotulinumtoxinA for these treatments in order to cut costs.  Government officials seized numerous packages of the foreign, unapproved drugs en route to Elite, and they warned the practice that it was importing adulterated and misbranded drugs.  Despite these warnings and Medicare rules that the program denies coverage of drugs that have not received approval from the FDA, Dr. Lado knowingly used these foreign, unapproved drugs to treat Medicare beneficiaries and billed Medicare for those services. 

          “Providers can place patients at risk of harm through the importation and use of unapproved drugs,” said Mario M. Pinto, Special Agent in Charge at the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “Protecting the safety of Medicare and Medicaid patients is crucial, and HHS-OIG is committed to ensuring that taxpayer dollars are not used for unapproved, potentially dangerous medical substances, that put patients at risk.”

          “The FDA requirements are designed to ensure the safety, efficacy, and quality of drugs distributed to American consumers,” said Special Agent in Charge Ronne L. Malham, FDA Office of Criminal Investigations (FDA-OCI) Chicago Field Office. “We commend the efforts of the Department of Justice to protect the public health and hold accountable those who place profits over patient safety.”

          “We will continue to work with our partners to prioritize the safety of our Michigan residents,” said Detroit Special Agent in Charge Angie M. Salazar, Homeland Security Investigations (HSI). “Unregulated goods, more importantly those used in medical treatments, present a variety or dangers and risks that no patient should be subject to.”

          The resolution obtained in this matter was the result of a coordinated effort between the U.S. Attorney’s Office for the Western District of Michigan, HHS-OIG, FDA-OCI, and HSI.  Assistant U.S. Attorney Andrew J. Hull prosecuted this matter.

          The claims resolved by the settlement are allegations only, and there has been no determination of liability.


Updated May 23, 2023

Civil Rights
False Claims Act
Health Care Fraud