Criminal Charges Against Six More Individuals

Clay County Pharmacy Investigation Results In Criminal Charges Against Six More Individuals In Opioid Distribution And Health Care Fraud Conspiracy

Civil Enforcement Actions Also Underway

NASHVILLE (STL.News) Charging documents unsealed yesterday charge six more individuals in relation to a massive opioid distribution and health care fraud conspiracy orchestrated from pharmacies in Celina, Tennessee, announced Acting U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee.

A seven-count indictment returned on November 15, 2021, charges Thomas K. Weir, 61, majority owner of Dale Hollow Pharmacy and Xpress Pharmacy in Celina, and William L. Donaldson, 61, former owner and Pharmacist-in-Charge of Dale Hollow Pharmacy (then known as Donaldson Pharmacy), both of Celina, Tenn.; Charles R. Oakley, aka Bobby Oakley, 69, of Cookeville, Tenn., co-owner of Dale Hollow Pharmacy; and Pamela Spivey, 50, of Hilham, Tenn., co-owner of Xpress Pharmacy, with conspiracy to distribute and dispense controlled substances and conspiracy to commit health care fraud.

The indictment also charges Weir, Donaldson, and Oakley with conspiracy to defraud the United States and commit an offense through the payment of illegal kickbacks, and Weir, Oakley and Spivey with health care fraud and aiding and abetting health care fraud.

All were arrested yesterday by federal, and state law enforcement agents and appeared before a U.S. Magistrate Judge in Nashville.

In addition, a superseding information, filed on December 15, 2020, and unsealed yesterday, charges former Pharmacist-in-Charge of Dale Hollow Pharmacy John M. Polston, 60, of Tompkinsville, Kentucky, with conspiracy to distribute and dispense controlled substances, 22 counts of unlawful distribution of controlled substances, and conspiracy to defraud the United States and commit an offense through the payment of illegal kickbacks.  A criminal information filed on May 6, 2021, and unsealed yesterday, charges Michael L. Griffith, 37, of Mount Juliet, Tenn., the former Pharmacist-in-Charge of Xpress Pharmacy, with conspiracy to distribute and dispense controlled substances, health care fraud, and aiding and abetting health care fraud.

Also unsealed yesterday are two plea agreements.  On March 23, 2021, John Polston pleaded guilty to conspiracy to distribute and dispense controlled substances, illegal distribution of controlled substances, and conspiracy to defraud the United States and commit an offense through the payment of illegal kickbacks, in violation of the Anti-Kickback Statute.

He is currently awaiting sentencing.  On August 26, 2021, Michael Griffith pleaded guilty to conspiracy to distribute and dispense controlled substances and to two counts of health care fraud.  Griffith is also awaiting sentencing.

According to the charging documents, the defendants conspired with or otherwise aided and abetted one or more co-defendants in illegally distributing and dispensing controlled substances, including oxycodone, hydrocodone, morphine, buprenorphine, alprazolam, and other Schedule II, III, and IV controlled substances, outside the usual course of professional practice and for no legitimate medical purpose, for the purpose of unlawfully enriching and benefitting themselves.  The conspiracy was carried out by a variety of means, including dispensing prescriptions for controlled substances to patients despite obvious signs of abuse or diversion by the patients and other indications that the prescriptions were not for legitimate medical purposes.

According to the charging documents, Weir, Oakley, Donaldson, and others, conspired to defraud the United States and violate the Anti-Kickback Statute by offering and paying kickbacks and bribes to Donaldson for arranging the referral of patients, including Medicare and Medicaid beneficiaries, to Dale Hollow Pharmacy and paying Donaldson at least $50,000 for the recruitment of patients; paying patient’s insurance co-payments and $100.00 in cash, and developing and providing a cash coupon called “Monkey Bucks” to patients to induce patients to fill expensive prescriptions at Dale Hollow Pharmacy; and submitting false claims to and obtaining reimbursement from Medicare and Medicaid.

For example, during the course of the conspiracy, Medicare paid Dale Hollow Pharmacy $237,558 in reimbursement for a single patient’s prescriptions procured through routine cash incentive payments to the patient.  During the course of the conspiracy, Medicare Part D and TennCare, Tennessee’s Medicaid program, paid a total of $7.4 million in reimbursements to Dale Hollow Pharmacy for patient prescriptions procured through kickbacks and bribes.

The charging documents also allege that in 2015, Weir purchased a controlling interest in Xpress Pharmacy, a pharmacy located approximately 200 yards from Dale Hollow Pharmacy.  In-between Dale Hollow Pharmacy and Xpress Pharmacy was another competing retail pharmacy.

Weir, with co-owner Pam Spivey and Pharmacist-in-Charge Michael Griffith, conspired to distribute and dispense opioids and other controlled substances and developed a plan to increase profits.  Marketing flyers were then developed, advertising that Xpress Pharmacy dispensed buprenorphine (Subutex), a controlled substance that is sought after by those who abuse opioids.

Griffith and Spivey then purchased trays of cookies and delivered the cookies and marketing flyers to medical clinics around the State of Tennessee whose doctors wrote prescriptions for Subutex.  Many of these clinics were hours away from Xpress Pharmacy.

Following the marketing campaign, patients drove hundreds of miles to Xpress Pharmacy to fill prescriptions for Subutex, sometimes arriving together in car loads.  Weir purchased Subutex through Dale Hollow Pharmacy and delivered it through co-conspirators in tote bags to the neighboring Xpress Pharmacy.

In the third quarter of 2015, before Weir was the majority owner of Xpress Pharmacy, Xpress Pharmacy dispensed approximately 420 doses of Subutex.  By the end of the first quarter of 2016, after Weir was majority owner, that number was over 14,000 doses.  By the second quarter of 2017, it was over 34,000 doses.

In May and June of 2016, the Drug Enforcement Administration (DEA) inspected Dale Hollow Pharmacy and in 2017, Weir, Oakley, and Polston signed a Memorandum of Agreement with the DEA related to violations of the regulations governing the dispensing of controlled substances, including Subutex.  Despite the agreement, the dispensing of Subutex continued to increase.

Weir also set mandates on the number of Subutex pills or doses to fill in a month, routinely checked to see how much had been dispensed, and instructed the pharmacy employees, to never run out of Subutex.

Dale Hollow Pharmacy and Xpress Pharmacy also submitted false and fraudulent claims to Medicare Part D plans, and to TennCare, for controlled substances dispensed to Medicare and Medicaid beneficiaries that were medically unnecessary or otherwise ineligible for reimbursement.

In February 2019, the Justice Department filed a civil complaint against Dale Hollow Pharmacy and Xpress Pharmacy, including the owner, Thomas Weir and pharmacists John Polston, Michael Griffith, and others.  The government sought and received a Temporary Restraining Order and a Preliminary Injunction, which remains in place, and which prevented the pharmacies and pharmacists from dispensing controlled substances.

The government is also seeking civil monetary penalties and treble damages for civil violations of the Controlled Substances Act and the False Claims Act.

In the criminal case, the government also seeks the forfeiture of any property used or intended to be used to commit or facilitate the commission of each offense.

The offenses charged carry between 5-20 years in prison for each count, upon conviction, and fines between $250,000-$1 million.

The charges are merely accusations.  All defendants are presumed innocent until proven guilty in a court of law.

This case was investigated by the DEA; the U.S. Department of Health & Human Services-Office of Inspector General; and the Tennessee Bureau of Investigation; with the assistance of the Clay County Sheriff’s Office.

Assistant U.S. Attorneys Sarah K. Bogni and Amanda J. Klopf are prosecuting the criminal cases and Assistant U.S. Attorney Ellen Bowden-McIntyre is handling the civil investigation and litigation.  The criminal investigation was supported by resources provided by the Department of Justice, Fraud Section, Health Care Fraud, Appalachian Regional Prescription Opioid Strike Force.  The civil investigation was assisted by the Department of Justice, Consumer Protection Branch.

SOURCE: USDOJ.Today