16 doctors, clinic owners sentenced in $250M opioid fraud scheme

Sixteen people, including 12 doctors, will face prison time and hefty fines for their roles in a $250 million fraud scheme that exploited patients addicted to opioid painkillers, the Department of Justice (DOJ) announced Wednesday.

The Michigan- and Ohio-area defendants collectively distributed more than 6.6 million doses of medically unnecessary opioids to patients from 2007 to 2018 in exchange for unnecessary facet joint injections, a painful but highly reimbursed procedure that in some cases left the patients with lasting adverse conditions, according to court documents and evidence referenced by the DOJ.

“Health care professionals who exploit opioid addiction for financial gain do so at the risk of endangering their patients and undermining critical public health efforts to address the opioid epidemic,” Special Agent in Charge Mario Pinto of the U.S. Department of Health and Human Services' Office of Inspector General (HHS OIG) said in a statement. “We will continue working with our law enforcement partners to ensure that bad actors are held accountable for such egregious disregard for patient safety and well-being.”

The DOJ said defendants were running a multistate network of pain clinics that served as “pill mills” for patients with addiction and those looking to resell the prescription drugs. Although the physicians tried to avoid the Drug Enforcement Administration’s notice by limiting their working hours, the DOJ said they were the highest prescribers of oxycodone in the state of Michigan and that their clinics were paid more for facet joint injections than any others in the country.

Per evidence referenced by the DOJ, defendants went on to spend their fraudulent gains on lavish purchases such as jewelry, luxury cars, gold bars, real estate and, in one case, payments to mixed martial arts fighters and the Ultimate Fighting Championship organization to promote a specialized diet business. The department said more than $16 million in fraud proceeds were forfeited by the U.S. from the defendants.

The convicted defendants each face restitution payments ranging from six to eight figures as well as days to years in prison, the DOJ said. The harshest punishments were handed out to Spilios Pappas, M.D., who was sentenced to nine years and more than $32 million in restitution, and Mashiyat Rashid, another part owner who pleaded guilty and was sentenced to 15 years in prison and more than $51 million in restitution.

“It is unconscionable that doctors and health care professionals would violate their oath to do no harm and exploit vulnerable patients struggling with addiction,” Assistant Attorney General Kenneth A. Polite Jr. of the DOJ’s Criminal Division said in a statement. “These are not just crimes of greed, these are crimes that make this country’s opioid crisis even worse—and that is why the department will continue to relentlessly pursue these cases.”

Seven more defendants are awaiting sentencing for their roles in the scheme, including part owner Francisco Patino, M.D., the DOJ said. Five physicians were convicted following trials, while 18 other defendants have pled guilty.

The case was jointly investigated by the Federal Bureau of Investigation, the HHS OIG and the Internal Revenue Service Criminal Investigation enforcement agency. Members of the DOJ’s Fraud Section and the National Rapid Response Strike Force prosecuted the case.