Alabama Doctor, Pharmacist Plead Guilty To Health Care Fraud

BIRMINGHAM, AL — A Fultondale doctor pleaded guilty Tuesday to prescribing controlled substances without a legitimate medical purpose and engaging in health care fraud, announced U.S. Attorney Jay Town. Dr. Paul Roberts, a physician and former co-owner of Southeast Urgent Care in Fultondale, pleaded 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."

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, according to court documents.

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 had unqualified staff see patients, and then 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 in Demopolis, 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, court documents state. 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, the plea agreement states that, 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. 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.

Reeves pleaded guilty to one count of conspiring to commit the above-described compounded drug health care fraud conspiracy and scheme. 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.