Lauderdale County Doctor Pleads Guilty to Health Care and Wire Fraud

FLORENCE—A Lauderdale County physician pleaded guilty today in federal court to fraud totaling about $1 million in connection with billing a health insurer and Medicare for non-reimbursable cosmetic skin treatments, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein.

Diana K. McCutcheon, 55, of Killen, entered her guilty pleas to four counts of health care fraud and two counts of wire fraud before U.S. District Judge Inge P. Johnson. McCutcheon also agreed to forfeit $990,389 to the government as proceeds of illegal activity. Her sentencing is scheduled March 11.

Each of the health care fraud counts carries a maximum sentence of 10 years in prison and a $250,000 fine. Each of the wire fraud counts carries a maximum penalty of 20 years in prison and a $250,000 fine.

McCutcheon conducted the fraud through her medical clinics in Elgin and Lexington in North Alabama. According to the indictment and McCutcheon’s plea agreement, she operated a scheme to defraud Blue Cross Blue Shield of Alabama and Medicare between 2007 and 2011 by fraudulently billing for the removal of multiple skin lesions on patients who had received cosmetic laser and other treatments for various skin conditions. The conditions included sun spots, age spots, and wrinkles and were not covered by insurance.

The FBI, with assistance from the U.S. Department of Health and Human Services, investigated the case. Blue Cross Blue Shield of Alabama also assisted in the investigation. Assistant U.S. Attorneys Russell E. Penfield and Ramona Albin are prosecuting the case.