Category: US Department of Justice

Source: United States Department of Justice Criminal Division

A New Jersey doctor was arrested yesterday for unlawfully distributing oxycodone and other controlled substances.

According to court documents, Larry Pettis, 76, of Westampton, owned a medical practice that had multiple locations in New Jersey that purported to provide pain management and other services. Pettis allegedly pre-signed prescriptions for controlled substances so that another individual, who was not allowed to issue such prescriptions, could issue them when Pettis was out of the office. Pettis allegedly caused prescriptions for controlled substances, including opioids such as oxycodone, to be issued to patients even though Pettis had failed to assess the patients. Pettis is also alleged to have issued prescriptions for controlled substances when a patient’s drug test results raised red flags for substance abuse and drug diversion and to have caused medical records to be altered and fabricated.

Pettis is charged with four counts of unlawful distribution of controlled substances. If convicted, he faces a maximum penalty of 20 years in prison on each count. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; Assistant Director in Charge Wayne A. Jacobs of the FBI Philadelphia Field Office, South Jersey Resident Agency; Special Agent in Charge Naomi Gruchacz of the Department of Health and Human Services Office of Inspector General (HHS-OIG); and Special Agent in Charge Cheryl Ortiz of the Drug Enforcement Administration (DEA) New Jersey Division, Camden District Office made the announcement.

FBI, HHS-OIG, and DEA are investigating the case. 

Trial Attorneys Nicholas Peone and Hyungjoo Han of the Criminal Division’s Fraud Section are prosecuting the case.

Victims with questions may contact the Fraud Section’s Victim Assistance Unit by calling the Victim Assistance phone line at 1-888-549-3945 or by emailing Victimassistance.fraud@usdoj.gov. To learn more about victims’ rights, please visit: www.justice.gov/criminal-vns/victim-rights-derechos-de-las-v-ctimas.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice 2

A New Jersey doctor was arrested yesterday for unlawfully distributing oxycodone and other controlled substances.

According to court documents, Larry Pettis, 76, of Westampton, owned a medical practice that had multiple locations in New Jersey that purported to provide pain management and other services. Pettis allegedly pre-signed prescriptions for controlled substances so that another individual, who was not allowed to issue such prescriptions, could issue them when Pettis was out of the office. Pettis allegedly caused prescriptions for controlled substances, including opioids such as oxycodone, to be issued to patients even though Pettis had failed to assess the patients. Pettis is also alleged to have issued prescriptions for controlled substances when a patient’s drug test results raised red flags for substance abuse and drug diversion and to have caused medical records to be altered and fabricated.

Pettis is charged with four counts of unlawful distribution of controlled substances. If convicted, he faces a maximum penalty of 20 years in prison on each count. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; Assistant Director in Charge Wayne A. Jacobs of the FBI Philadelphia Field Office, South Jersey Resident Agency; Special Agent in Charge Naomi Gruchacz of the Department of Health and Human Services Office of Inspector General (HHS-OIG); and Special Agent in Charge Cheryl Ortiz of the Drug Enforcement Administration (DEA) New Jersey Division, Camden District Office made the announcement.

FBI, HHS-OIG, and DEA are investigating the case. 

Trial Attorneys Nicholas Peone and Hyungjoo Han of the Criminal Division’s Fraud Section are prosecuting the case.

Victims with questions may contact the Fraud Section’s Victim Assistance Unit by calling the Victim Assistance phone line at 1-888-549-3945 or by emailing Victimassistance.fraud@usdoj.gov. To learn more about victims’ rights, please visit: www.justice.gov/criminal-vns/victim-rights-derechos-de-las-v-ctimas.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice

ASD Specialty Healthcare LLC (ASD), doing business as Besse Medical (Besse), has agreed to pay $1.67 million to resolve allegations that it violated the Anti-Kickback Statute and False Claims Act by providing inventory management systems to retina practices at no cost to induce them to purchase drugs from Besse. ASD, headquartered in Carrollton, Texas, distributes specialty medical and pharmaceutical products nationwide, including ophthalmological injections that treat neovascular age-related macular degeneration (wet AMD).

As part of the settlement agreement, ASD admits that it acquired a commercially available inventory management system, known as PODIS, in May 2017. Through November 2023, ASD offered PODIS at no cost to customers who met certain purchase requirements, including that they purchase branded Wet AMD drugs from ASD and convert to an ASD customer if not a current customer. The government alleges that ASD caused physicians to submit false claims to Medicare, TRICARE and the Department of Veterans Affairs induced by these kickbacks.

The Anti-Kickback Statute prohibits any person, including specialty medical and pharmaceutical suppliers, from offering or paying, directly or indirectly, any remuneration — which includes money or anything of value, such as free inventory management systems — to induce the purchase of a drug that Medicare pays for.

“According to the allegations in today’s settlement, ASD purchased a commercially available product and leveraged it to gain business in violation of the AKS,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will pursue kickbacks at all levels of the distribution chain to preserve the integrity of federal health care programs.”

“Pharmaceutical distributors cannot violate the law to gain a financial advantage,” said U.S. Attorney Joshua S. Levy for the District of Massachusetts. “Offering improper incentives to health care customers can increase health care costs and disadvantage competitors who are playing by the rules. Our office is committed to continue pursuing these investigations with our federal law enforcement partners.”

“Improper financial inducements can compromise medical judgement and threaten the integrity of the Medicare program,” said Special Agent in Charge Roberto Coviello of the U.S. Department of Health and Human Services Office of Inspector General. “We are committed to pursuing allegations of kickbacks and false claims as we work to protect the integrity of the taxpayer-funded Medicare program, and we encourage the public to come forward with information about such conduct.”

“Investigating schemes that undermine the integrity of TRICARE, the healthcare system for military members and their families, is a top priority for the Department of Defense Office of Inspector General’s Defense Criminal Investigative Service (DCIS),” said Special Agent in Charge Patrick J. Hegarty of the DCIS Northeast Field Office. “Today’s announcement demonstrates our commitment to work with our partner agencies and the Justice Department to pursue those individuals and corporations that submit false claims to the TRICARE system.”

“Investigations such as these help safeguard the integrity of the healthcare industry marketplace and protect taxpayer funds,” said Special Agent in Charge Christopher Algieri of the Department of Veterans Affairs Office of Inspector General (VA OIG)’s Northeast Field Office. “The VA OIG thanks the Justice Department and our federal law enforcement partners for their collaboration in this joint investigation.”

The settlement resolves claims brought under the whistleblower or qui tam provisions of the FCA by Julianne Nunnelly and Matthew Shanks. Ms. Nunnelly and Mr. Shanks are former employees of Regeneron Pharmaceuticals Inc., which manufactures and sells a drug to treat wet AMD. Under the FCA, private parties may sue on behalf of the government for false claims for government funds and receive a share of any recovery. Mr. Shanks and Ms. Nunnelly will receive $250,705.20 from the proceeds of the settlement. The lawsuit is captioned United States ex rel. Nunnelly et al. v. Regeneron Pharmaceuticals, Inc. et al., No. 20-cv-11401-PBS (Dist. Mass.). The United States filed a complaint in intervention against Regeneron Pharmaceuticals, Inc., on March 28, that remains pending.

The investigation of this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorneys’ Offices for the District of Massachusetts, with assistance from the Department of Health and Human Services Office of Inspector General, FBI, DCIS, VA-OIG and the Office of Personnel Management Office of Inspector General.

The investigation and resolution of these matters illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the FCA. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

Trial Attorneys Douglas Rosenthal and Samuel Lehman of the Justice Department’s Civil Division and Assistant U.S. Attorneys Diane Seol and Lindsey Ross for the District of Massachusetts handled the matter.

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

Source: United States Department of Justice

An indictment was unsealed today in the Middle District of Tennessee charging a Texas man for child sexual exploitation offenses.

According to court documents, between October 2018 and May 2019, Philip Taylor Sobash, 34, of Austin, then a practicing physician, engaged in an online sexually explicit relationship with Minor Victim 1, who resided in the Middle District of Tennessee. This online relationship allegedly began after they connected on a dating website that facilitates “sugar daddy” relationships. Although Minor Victim 1 represented that she was 18 when she signed up for the website, the site did not verify the age of its users. As alleged, after their communications moved to text message, Minor Victim 1 quickly informed Sobash of her true age and sent him a photo of her driver’s license, which confirmed that she was a minor.

Sobash allegedly requested that Minor Victim 1 produce and send him sexually explicit images of herself and provided her thousands of dollars in cash and gifts to entice her to do so. Over the course of more than seven months, Minor Victim 1 allegedly sent hundreds of sexually explicit photos and videos to Sobash, most of which constituted child sexual abuse material (CSAM). Although Sobash allegedly assured Minor Victim 1 that the images she sent him would remain private between them, he distributed the images online. This led to unknown persons contacting Minor Victim 1 and attempting to blackmail her to produce more CSAM.

Court filings indicate that the FBI discovered in 2024 that Minor Victim 1’s CSAM was available for sale on a publicly accessible website and was labeled with Minor Victim 1’s first and last name. The CSAM was part of a larger collection of sexually explicit images and videos of about 70 young women and girls called the “DiscreetGent” collection.

According to court documents, evidence from various sources that indicates Sobash is “DiscreetGent” and is responsible for the sexually explicit imagery found in the online collection. The court filings further allege that in addition to Minor Victim 1, at least four other victims featured in the “DiscreetGent” collection were minors at the time they created CSAM for Sobash. Sobash allegedly sent electronic payments to Minor Victim 1 and the other minor victims, sometimes with sexual comments attached, and Sobash’s Apple iCloud account contained copies of Minor Victim 1’s CSAM.

Sobash was arrested earlier today in the Western District of Texas. He is charged with one count of sexual exploitation of a minor, one count of coercing a minor to engage in prostitution or unlawful sexual activity, and one count of receipt of child pornography. If convicted, he faces a mandatory minimum penalty of 15 years in prison and a maximum penalty of 30 years in prison on the sexual exploitation of a minor count, a mandatory minimum penalty of 10 years in prison and a maximum penalty of life in prison on the coercing a minor to engage in prostitution or unlawful sexual activity count, and a mandatory minimum penalty of five years in prison and a maximum penalty of 20 years in prison for the receipt of child pornography count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Anyone who believes they or their minor dependent was victimized by Sobash is asked to visit the following FBI website and complete a short online questionnaire: www.fbi.gov/SobashVictims.

Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Criminal Division; Acting U.S. Attorney Thomas J. Jaworski for the Middle District of Tennessee; and Assistant Director Chad Yarbrough of the FBI Criminal Investigative Division made the announcement.

The FBI’s Child Exploitation Operational Unit is investigating the case.

Trial Attorney Adam Braskich of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Monica R. Morrison for the Middle District of Tennessee are prosecuting the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.

An indictment is merely an allegation. The defendant is presumed innocent until proven guilty in a court of law.

Source: United States Department of Justice

Drew Mitchell Schreiber, of Orlando, Florida, pleaded guilty yesterday in the U.S. District Court for the Middle District of Florida to three counts of odometer tampering.

Schreiber, owner of Central Florida Automotive Group (now-named Southeastern Credit Union Solutions), in Winter Garden, Florida, purchased high-mileage used vehicles from wholesale automobile auctions throughout Florida. The vehicles’ odometers were then rolled back as much as 428,000 miles and resold to unsuspecting used-vehicle dealers via auto auctions or by online direct sales. The rolled-back vehicles were then sold to victims throughout the United States enriching Schreiber with fraudulent gains. In all, Schreiber sold 140 rolled-back vehicles. Because many of these vehicles were more than 10 years old, Schreiber obtained so-called “exempt” titles that did not reveal the actual mileage of the vehicles.

“Just because a motor vehicle may be exempt from mileage recording on a title does not give a dealer the right to roll back odometers,” said Principal Deputy Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “With vehicles remaining in use for longer periods of time, many Americans rely on older vehicles as their primary mode of transportation. Used car buyers deserve peace of mind knowing that the odometer reading in their vehicle is correct.”

A sentencing hearing will be scheduled at a later date. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The National Highway Traffic Safety Administration Office of Odometer Fraud Investigation investigated this case.

Trial Attorney David Sullivan of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Kara Wick for the Middle District of Florida prosecuted the case.

Additional information about the Consumer Protection Branch and its enforcement efforts can be found at www.justice.gov/civil/consumer-protection-branch.