Fultondale Doctor Pleads Guilty to Prescribing Controlled Substances and Health Care Fraud; Demopolis Pharmacist Pleads Guilty to Health Care Fraud

A Fultondale doctor today pleaded guilty to prescribing controlled substances without a legitimate medical purpose and engaging in health care fraud announced U.S. Attorney Jay E. Town, DEA Assistant Special Agent in Charge Clay Morris, and FBI Special Agent in Charge Johnnie Sharp, Jr.

PAUL ROBERTS, M.D., 48, of Fultondale, Ala, a physician and former co-owner of Southeast Urgent Care (“SEUC”) in Fultondale, pled guilty before U.S. District Court Judge Annemarie Axon to 16 counts stemming from a June 2019 Second Superseding Indictment.  According to the plea agreement, Roberts stipulated to a 72-month sentence and agreed to surrender his Alabama and other State medical licenses.  He also agreed to pay a fine of $100,000 and restitution of $2.2 million.

“We have recently heard many stories about the sacrifices made by physicians and pharmacists to care for patients during this difficult time. Unfortunately, there are also those who have chosen to sacrifice patient care for pure greed,” First Assistant United States Attorney Lloyd Peeples said. “Those who engage in such unlawful practices unnecessarily drive up healthcare costs and destroy lives in our communities.”

“The only cure for the pain caused by pill mill doctors, like Roberts, is public awareness, victims who come forward, and a determined fleet of FBI agents coupled with our great partners who will arrest and prosecute these unscrupulous practitioners when they choose to sell their ethics, betray their oath, and break the law,” Sharp said.

“This guilty plea is yet another example of DEA’s efforts to rid Alabama of doctors who place greed and personal wealth over the well-being of Alabamians,” Morris said.  “The DEA, FBI and the United States Attorney’s Office stand steadfast in our fight against the opioid epidemic in Alabama.  We will continue to investigate, arrest and prosecute drug dealers who prey on those struggling with addiction and hide behind their veil of a professional practice.”

Roberts pleaded guilty to 12 counts of prescribing controlled substances without a legitimate medical purpose.  According to the plea agreement, on days Roberts was out of the office, he allowed unqualified staff, including an x-ray technician, to prescribe controlled substances to patients using prescriptions that Roberts pre-signed.  The plea agreement also states that Roberts illegally prescribed controlled substances, including oxycodone, to two women.  He issued them to one in exchange for sexual favors and to the other even though he knew that she was abusing controlled substances. 

Roberts also pleaded guilty to two health care fraud conspiracies and two counts of participating in a health care fraud scheme.  The first focused on fraudulently billing for office visits.  According to the plea agreement, on dates he was absent from the office, Roberts caused unqualified staff to see patients, and then caused SEUC to bill Blue Cross Blue Shield of Alabama as though Roberts had provided those services.

The second conspiracy and scheme focused on fraudulently billing health insurance plans through their third-party administrators for compounded drugs.  According to the plea agreement, beginning in 2012, Roberts entered into an unlawful agreement with his co-defendants, Stanley Reeves, a pharmacist and owner of F&F Drugs, a Demopolis-based pharmacy, and Brett Taft, a Tuscaloosa-based sales representative, to fraudulently bill these health insurance plans for medically unnecessary compounded drugs.  To induce Roberts to issue these medically unnecessary drugs, Taft paid Roberts kickbacks.  Roberts then issued the prescriptions, sometimes without patients’ knowledge, and sent them to F&F Drugs, which then filled and billed the prescriptions to insurance plans.  Reeves would then pay Taft a portion of the billing proceeds, with Taft using some of those proceeds to pay Roberts kickbacks.  In addition, to induce patients to accept these medically unnecessary drugs, Roberts and his co-defendants agreed that F&F Drugs would waive patient co-pays, and did so in violation of the health insurance plan rules.  And, to maximize profit from each prescription, Roberts and his co-defendants also agreed that F&F Drugs would automatically refill the compounded drugs that Roberts referred regardless of whether patients needed those drugs.  Between April 2012 and February 2014, F&F Drugs billed health insurance plans approximately $2.2 million for medically unnecessary compounded drugs issued by Roberts.

Town, Morris and Sharp also announced that last week, one of Roberts’s co-defendants, STANLEY REEVES, 62, of Demopolis, Ala, pharmacist and owner of F&F Drugs in Demopolis, pleaded guilty to one count of conspiring to commit the above-described compounded drug health care fraud conspiracy and scheme.  Reeves did so via a simultaneously filed information.  According to the plea agreement, between April 2012 and February 2014, F&F Drugs billed health insurance plans approximately $10.5 million for medically unnecessary compounded drugs issued by various doctors, including Roberts.  Under the terms of the plea agreement, Reeves stipulated to a 38-month sentence and agreed to surrender his pharmacist license to the Alabama Board of Pharmacy.  He also agreed to pay a fine of $100,000, restitution of $10.5 million, and forfeiture of $900,000 with $300,000 due on the date he is sentenced.

The maximum punishment for the dispensing controlled substances charges is 20 years in prison and a $1,000,000 fine. The maximum penalty for the health care fraud and conspiracy charges is 10 years in prison and a $250,000 fine. 

FBI and DEA investigated the cases, which Assistant U.S. Attorneys Chinelo Dike-Minor, Austin Shutt, Kristen Osborne, and Lloyd C. Peeples are prosecuting.

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