Posted on June 18 2019
Superseding Indictments are...
While not directly related to yesterday’s write up - it does draw a targeted picture and why this issue is persistent and pervasive. At a certain point the Federal Government can not be expected to shoulder the “whole” of the burden. That at some point the State and State Medical Boards need to lean in to the problem and try to work in concert with federal authorities. After all it does take a village but the Feds can’t do 100% of the work. That States need to start information sharing and their respect Medical Boards should be required to truly regulate medical practitioners...versus hoping an AUSA will come clean up their yard.
Fair warning this is a long entry. As standard practice I took the time to embedded a lot of original documents. I am and will continue to endeavor to always bring you original document/data source. And of course as much Open Source (litigation matters) as possible. As you know I’m an unapologetic advocate of: “showing your homework” and yes I can acknowledge that some of my blog entries (like this one) tend to be sourced to the teeth. That is not an action I am willing to compromise. Period.
On June 13, 2019 a Federal Grand Jury handed down a superseding Indictment. See AUSA Shore’s tweet and link to the official DOJ-OPA release - announcing the unsealed Superseding Indictments of three Drs & Criminal Informations of five “marketers”. In total eight individuals defrauded tax payers out of millions of dollars.
Three physicians & five marketers have been charged for violating federal anti-kickback laws. Sadly, it is the American taxpayer who ends up paying the the price when unscrupulous medical professionals scheme to fraudulently bill federal health insurance.https://t.co/8w736tgzas— US Attorney Shores (@USAttyShores) June 13, 2019
Subsequently thereafter on June 14, 2019 the NDOK AUSA officially unsealed the following superseding Indictment (sorry it’s behind a paywall). Conversely this google drive should work, as should this google shared drive link. For those who have followed my Big Pharma Series, then this should not be a surprise, at all. Given that in nearly all of the recent civil cases, settlements and deferred prosecution agreements each of which included multiple hints that Doctors and Marketing Firms and Pharmaceuticals Reps willingly participated in Big Pharma’s scheme and received impermissible compensation.
However this particular criminal matter (Case 4:18-cr-00251-CVE) is somewhat unique in a multitude of factors. Specifically the somewhat sophisticated network of business entities, recruitment of doctors, bribes and kickbacks - just to name a few. The superseding Indictment names three doctors:
Three physicians & five marketers have been charged for violating federal anti-kickback laws. Sadly, it is the American taxpayer who ends up paying the the priceindictment - since November 2012, Drs Parks and Lee, both engaged (and recruited others) in a years long conspiracy. These Drs unlawfully paid kickbacks and a multitude of bribes to other physicians (some of whom they later recruited) - those unlawful payments expressed goal was to induce other physicians to write expensive compounding prescriptions to pharmacies controlled by Parks and Lee and other co-conspirators.
Compounding Prescriptions are classified by TriCare, VACampus and Medicare as - A combination of two or more drugs. Prepared by a pharmacist. For a patient’s individual needs. They almost always are expensive. See FDA Explanation circa June 2018. See (current) TriCare’s criteria regarding Compounding Prescriptions, process and policy, The Defendant used the following business entities in the furtherance of their conspiracy:
- OK Compounding LLC in Skiatook,
- One Stop RX LLC in Tulsa
- NBJ Pharmacy LLC
- Airport McKay Pharmacy, Houston
- R & A Marketing, Houston
What is somewhat interesting is, in the Indictment Defendant Parks - has zero medical or pharmaceutical licensing - yet the indictment seems to indicate he was largely responsible for “recruiting” other physicians. Since compounding prescriptions are “not authorized by the FDA in to be mixed in bulk” perhaps there needs to be an automatic ticket when providers or pharmacists input the “compounded rx” into the e-scripts system. Because this enterprise was allowed to operate for years, virtually undetected by TriCare, Medicare, FECA and CHAMPVA.
To verify the business entities you can access their public filings via the TexasSOS and OklahomaSCC but the R & A Marketing (See Boyd Criminal Information). The defendants then allegedly submitted large claims for payment to federal health care programs and divided the profits. The defendants are also accused of causing Federal Funds Disbursements for the following Federal Programs, such as:
- TRICARE to pay reimbursement for false claims in the total amount of $3,207,514.97
- MEDICARE in total of $285,776.87
- FECA Program in total of $552,544.55
- CHAMPVA in total of $310,273.64.
As further detailed at the end of this write up - the Texas Medical Board had identified Drs Keepers & Arredondo in violation of their rules surrounding pain medication and prescriptions. Specifically the pre-printed prescription pads. What I do not understand is why didn’t the Oklahoma Medical Board factor in the Texas Board’s previous disciplinary actions and require better controls. Moreover because “compound prescriptions” are customized to a particular patient I am pretty sure some HCI would require a pre-authorization, which means this criminal enterprise could have been shuttered years ago had OK, TX, FDA & DEA had better communication and shared information across agencies. But then again I might be intentionally simplifying this matter...
To help you discern the detailes of the SUPERSEDING INDICTMENT by USA
Christopher R Parks (1) count(s) 1s, 25s,
Gary Robert Lee (2) count(s) 1s, 25s,
Jerry May Keepers (3) count(s) 1s, 2s-24s, 25s
Krishna Balarama Parchuri (4) count(s) 1, 25, 26-32, 33
What is bonkers is Dr Parchuri was clearly recruited into this network - yet he was paid up to $50,000 per month in “kick-backs” “bribes” and “commissions” for writing numerous
The kickback payments were allegedly disguised through fraudulent business arrangement. In the furtherance of this pretty sophisticated scheme - fraudulent contracts were created among the corrupt pharmacies and physicians for services as “medical directors” or “consulting physicians” to the pharmacies. The facts and evidence collected over the course of this investigation proved that the (three) doctors did not provide any of the services itemized in the felonious invoices.
The sham arrangements were meant to conceal the fact doctors were receiving kickback payments for writing prescriptions. R&A Marketing and the pharmacies were each responsible for their prearranged portion of the kickback payments.
Daniel Richard Ferguson, John Richard Frohrip and Kevin Ellis Partin:
...are charged in three separate Informations with offering or paying health care kickbacks. On March 30, 2015, the men allegedly paid a physician a $15,000 check payment from an account controlled by Brookhaven Specialty Pharmacy, LLC, which constituted a kickback in return for the physician referring patients to Brookhaven for compounding prescriptions that would be reimbursed by the federal health care program Tricare.
Simultaneously Jonathon Yates Boyd III, Criminal Information (paywall) - this Google Drive link should also work was also unsealed. From my limited research Boyd’s role appears to have been the go between - a conduit if you will.
charged in an Information for conspiring to pay health care kickbacks. In 2012, Boyd formed R&A Marketing LLC, in Houston, Texas, and began recruiting physicians to write prescriptions for compounded drugs. From November 2012 to September 2014, Boyd conspired to pay kickbacks and bribes to physicians to induce them to write prescriptions for expensive compounded drugs and to submit those prescriptions to pharmacies controlled and operated by Parks and Lee. The conspirators then submitted large claims for payment to various federal health care programs and divided the profits from the federally-paid claims. Boyd was paid a commission based upon the reimbursed prescriptions.
On page 3 of Boyd’s Criminal Information, take note of a previously undisclosed Physician. This is actually an important detail, as Dr Adam Arredondo is not mentioned in the December 2018 Indictment or the June 2019 Superseding Indictment.
Dr Adam Arredondo
This is a bit of inference on my part but it’s not a random theory. This is based on my skill set and connecting this dot that others have missed while simultaneously shoving bon-bons down my calorie hole. Unlike some when I pulled down a file or the Superseding Indictment and the Boyd Criminal Information I noticed on page 3 (as previously mentioned) the first disclosure of Dr Arredondo and tying him in to this multimillion dollar scheme.. I can fully admit that Arredondo was not on my radar, whereas Drs Park & Keeper & Boyd have been on my radar for a while. Their scheme was eluded to in previous DOJ settlements. Naturally it makes sense that the DOJ cracking down on the ugly underbelly of Big Pharma that eventually it would lead to numerous criminal cases against medical practitioners who violated the Hippocratic Oath.
The indictment (August 2018) and superseding Indictment (September 2018, page 3) alleges that Arredondo solicited and subsequently received checks in exchange for referring compounding prescriptions to OK Compounding, paid for by federal programs. The indictment enumerated two checks in the amount of $10,000 were drawn from OK Compounding’s ICB Bank and made payable to Arredondo. They were dated Aug. 14, 2013, and Sept. 13, 2013 — well after Arredondo claims he resigned from the role.
Compounding prescriptions are the result of combining or altering ingredients to create a medication tailored to the needs of an individual patient that are not FDA approved. The indictment further alleges that Arredondo began recruiting other physicians to enter into contracts with OK Compounding through a company he controlled, Taffinder Marketing.
That said you may or may not know this, but nearly all State Medical Boards publish a regular periodicals. Such is the case of the Texas Board of Medicine (TBM). In September 2017 TBM “notified the public” by disclosing (See Pages 16 and 17) - Arredondo got the Kris Kobach treatment - figuratively speaking.
Agreed Order publicly reprimanding of Dr. Arredondo and requiring him to within one year complete the prescribing course offered by the University of California San Diego Physician Assessment and Clinical Education (PACE) program;
-have his practice monitored by another physician for eight consecutive monitoring cycles; and
- within 60 days pay an administrative penalty of $5,000.
The Board found Dr. Arredondo failed to meet the standard of care for one patient who he did not appropriately monitor or counsel while prescribing controlled substances against Board rules for the treatment of chronic pain..
Yes Doctors are human, therefore are prone to making mistakes, although I’m certain you could construct a solid argument, where the foundations should be rooted in the ubiquitous “Hippocratic oath”. That Arrendondo knew. See his June 2006 Texas Medical Board Action - he was ordered to pay a $20,000.00 find and was placed on five years probation with an actual medical board monitor. Meaning <14 months after his probation expired (June 2011) - see pages 2 and 3 of the June 2006 Texas Medical Board Report
You can view Arredondo’s complete Texas Medical Board status here for his medical license number: K7648 because I’m a firm believer in original document source and showing you where to find aforementioned documents. This way you have access to the same body of facts I’m working with.
Dr Adam Arredondo was Indicted in August of 2018 (remember the majority of the other defendants were indicted in December 2018) and in September 2018 prosecutors unsealed a superseding Indictment - I’m spitballing here but I’m 99% confident that Arredondo “flipped” on this sophisticated scheme. Given that a plea deal had not been entered on the docket - my guess is perhaps he was cooperating but then decided to cease cooperation - hence why Arredondo’s Criminal Trial is set for July 2019.
If you pull up Arredondo’s full docket for his Case: 4:18-cr-00167-GKF - you’ll notice in mid-October 2018 the Government did not file a Motion of Opposition to the return of Arredondo passport or his subsequent Motion to travel. If you’re asking me to speculate - my educated guess is Arredondo is a cooperating witness that brought this network down.
Meaning Arredondo may have provided the Government with substantial assistance. But here’s what’s kind of odd, based on last months hearing minutes - Arredondo Trial is scheduled to commence in July 2019. - although it is really important to remember that this and the aforementioned eight other defendants are a result of a four+-year investigation of a compounding pharmacy previously located in the same Federal District in Oklahoma.
Furthermore on September 18, 2018 the Government informed the Court that they had Arredondo and his counsel hard drive containing 51,285 files, an enumeration of 226,379 pages of discovery. In the same Motion the Government in a very nuanced way almost defended the defendant. Specifically stating that Arredondo and one of his attorneys lives in Texas
Case No - 4:18-cr-00251-CVE
The December 2018 (original) Indictment only named three individuals -
Dr Gary Robert Lee of Tulsa, Oklahoma - See his OK Medical Board file.
Dr Jerry May Keepers of Kingwood, Texas - See his OK Medical Board file.
It is stunning to me that zero disciplinary action has been adjudicated. Call me old fashioned but if you’re looking down the double barrel of an Indictment and superseding Indictment maybe you shouldn’t have your medical license. Just a thought, not a sermon (yet).
Dr Jerry May Keepers of Kingwood, Texas - Texas Medical Board Administrative Actions - three in total:
Dr Keepers License No G1453 August 30, 20213 Texas Medical Board Report - which concluded the following - keep in mind this occurred as Dr Keepers made some $800K in kickbacks and bribes:
A NON-DISCIPLINARY REMEDIAL PLAN THAT REQUIRES DR. KEEPERS TO, WITHIN ONE YEAR, COMPLETE AT LEAST FOUR HOURS OF CME IN THE TOPIC OF RISK MANAGEMENT, AT LEAST FOUR HOURS IN THE TOPIC OF ETHICS, AND, WITHIN 60 DAYS, PAY AN ADMINISTRATIVE FEE OF $500. THE BOARD FOUND DR. KEEPERS DID NOT ENSURE THAT HIS EMPLOYEES OBTAINED ALL OF THE REQUIRED CME. DR. KEEPERS DOES NOT ADMIT OR DENY THE FINDINGS BUT AGREED TO THE REMEDIAL PLAN TO AVOID THE COST AND UNCERTAINTY OF LITIGATION.
But it’s the Malpractice Disclosures that - well just read it and draw your own conclusions - although if you are doing a cervical procedure how on earth do you “accidentally” puncture the spine? (That’s a genuine question - because I’m a neophyte as it relates to medical matters)
May 2, 2014 Texas Medical Board Report/File yet another action against Dr Keepers (remember the compounding Rx Bribery & Kickback criminal enterprise occurred from 2012 to 2015) - notice the red box? Yes that’s part of the original and superseding Indictment, respectively.
On August 29, 2014 the President of the Texas Medical Board issued the following amended Order ( specifically a Nunc pro tunc) concerning Dr Keeper’s prescription writing authority - to wit the Texas Medical Board:
“RESPONDENT SHALL BE PERMITTED TO SUPERVISE AND DELEGATE PRESCRIPTIVE AUTHORITY TO PHYSICIAN ASSISTANTS AND ADVANCED PRACTICE NURSES AND TO SUPERVISE SURGICAL ASSISTANTS.”
Dr. Krishna Balarma Parchuri - Florida License Number: OS11254 - expired on 3/31/2016. His Texas Board of Medicine #M6328 Full Medical License, shows zero disciplinary actions. If you want to see something rather odd - this is the link to his Tulsa Practice - clock on the embedded links - it’s wired.
The point of this entry is - there were multiple points of intersection(s) that could have prevented this years long fleecing of tax-payers. Between bulk writing of compound prescriptions. Given some of the drugs needed in the formulas would have required Class I and/or II. Which means these Rxs would require a DEA number based on federal guidelines . Specifically the various state medical boards - it just seems like the breakdown in accountability happened on a State level but for not for the millions of dollars in Federal Payments that’s how this enterprise was taken down.
Again I’m not castigating the State of Oklahoma. The fact is opioid abuse is an epidemic - with respect to statistical data secular to Oklahoma & Opiods - according to the March 2019 data from the National Institute of Health - there’s been a downward trajectory. Conversely if you look at 2012 to 2015 which is when this sophisticated “network” was set up there’s a precipitous drop in deaths related to opioids in Q1 of 2014.
Opioid-Involved Overdose Deaths
In 2017, there were 388 overdose deaths involving opioids in Oklahoma—a rate of 10.2. deaths per 100,000 persons, compared to the national rate of 14.6 deaths per 100,000 persons. The most significant decline occurred among deaths involving prescription opioids, from 444 deaths in 2012 to 251 deaths in 2017. Deaths involving synthetic opioids (mainly fentanyl) have remained steady since 2010 with 102 deaths reported in 2017. Those involving heroin have increased threefold since 2011 from 17 deaths to 61 deaths in 2017 (Figure 1).
Opioid Pain Reliever Prescriptions
In 2017, Oklahoma providers wrote 88.1 opioid prescriptions for every 100 persons (Figure 2)–a 30 percent decline since 2012, when the rate was 127 opioid prescriptions per 100 persons (CDC). The rate of overdose deaths involving opioid prescriptions has also declined from 11.8 deaths per 100,000 persons in 2012, to 6.7 deaths per 100,000 persons in 2017 (Figure 2).
Although it’s not lost on me that the current Oklahoma Attorney General is certainly making a name for himself wracking up hundreds of millions of dollars in cash settlements with Big Pharma and addressing the opioid epidemic within his State - perhaps he will considering investigating and investing in the Oklahoma Medical Board - given the three doctors indicted are still listed as “in good standing” and there are minimal administrative or disciplinary actions coming from the Oklahoma State Medical Board. - SpicyFiles Out
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