Thirty-Two Indicted in Florida in Second Coordinated Pill Mill Takedown
Defendants Owned and Worked at Four Area Clinics that Prescribed More Than 20 Million Pills and Profited More than $40 Million; Thirteen Doctors Among Those Charged
|U.S. Attorney’s Office August 23, 2011|
MIAMI—Thirty-two defendants, including 13 doctors, were charged in an indictment unsealed today for their participation in, among other things, the illegal distribution of pain killers and steroids through pill mills operating in Broward and Palm Beach Counties in Florida and through the Internet, respectively.
The charges were announced by Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida; John V. Gillies, Special Agent in Charge, FBI; Mark R. Trouville, Special Agent in Charge, Drug Enforcement Administration (DEA); José A. Gonzalez, Special Agent in Charge, Internal Revenue Service-Criminal Investigation (IRS-CI); Michael McAuliffe, Palm Beach, Fla., County State Attorney; Ric Bradshaw, Sheriff, Palm Beach County Sheriff’s Office; Al Lamberti, Sheriff, Broward, Fla., Sheriff’s Office; Chadwick E. Wagner, Chief, Hollywood, Fla., Police Department; Dan Alexander, Chief, Boca Raton, Fla., Police Department; and Patrick Lynn, Chief, Davie, Fla., Police Department.
Researchers from the Centers for Disease Control and Prevention report that Schedule II prescription painkillers, like oxycodone, today cause more drug overdose deaths than cocaine and heroin combined. Oxycodone and other Schedule II drugs have a high potential for abuse and can be crushed and snorted, or dissolved and injected, to get an immediate high. This abuse can lead to addiction, overdose, and sometimes death.
The five-count indictment, filed Aug. 11, 2011 and unsealed today, charges the defendants with numerous crimes, including racketeering conspiracy (18 defendants in count 1), money laundering conspiracy (19 defendants in count 2), possession with intent to distribute controlled substances (19 defendants in count 3), maintaining drug-involved premises (9 defendants in count 4), and wire and mail fraud conspiracy (16 defendants in count 5). Charged in the indictment are Christopher Paul George, 30, of Wellington, Fla.; Jeffrey George, 30, of Wellington; Derik Nolan,34, of Wellington; Christopher Hutson, 31, of Wellington; Theodore Obermeyer, 30, of West Palm Beach, Fla.; Ethan Baumhoff, 40, of Ft. Lauderdale, Fla.; Andrew Harrington, 31, of Deerfield Beach, Fla.; Daryl Michael Stewart, 44, of West Palm Beach, Steven Goodman, 67, of St. Petersburg, Fla.; Michael Renda, 30, of West Palm Beach, Matthew Siss, 25, of Jupiter, Fla.; Pedro Martinez, 35, of Royal Palm Beach, Fla.; Jason Leve, 33, of Wellington; Jack Martin, 48, of North Palm Beach, Fla.; Marc Anthony Naya, 26, of Boynton Beach, Fla.; Zachary Horsley, 25, of Royal Palm Beach; Gino Marquez, 30, of Wellington; Beau Boshers, M.D., 47, of Palm Beach Gardens, Fla.; Michael Aruta, M.D., 48, of Boca Raton; Cynthia Cadet, M.D., 41, of Parkland, Fla.; Roni Dreszer, M.D., 36, of Sunny Isles Beach, Fla.; Patrick Graham, M.D., 64, of Boca Raton; Daniel Hauser, M.D., 61, of Hollywood; Robert Meek, D.O., 36, of Davie; Vernon Atreidis, M.D., 46, of Ft. Lauderdale; Augusto Lizarazo, M.D., 70, of Jupiter; Christine Chico-Blume, D.O., 59, of Jupiter; Dianna Pavnick George, 27, of Wellington; Denice Haggerty, 58, of Wellington; Joseph Castronuovo, M.D., 72, of Key Largo, Fla.; Irwin Beretsky, M.D., 76, of Boca Raton; and Jacobo Dreszer, M.D., 70, of Sunny Isles Beach.
The indictment alleges that Christopher and Jeffrey George, twin brothers, operated, managed and financed four alleged pain management clinics in Broward and Palm Beach Counties: American Pain, Executive Pain, East Coast Pain and Hallandale Pain. According to the indictment, from 2008 to early 2010, the defendants’ pill mills distributed approximately 20 million oxycodone pills and made more than $40 million from the illegal sales of controlled substances.
U.S. Attorney Ferrer stated, “These defendants showed a callous disregard for the well-being of their patients and the value of human life. For years, they distributed oxycodone and other controlled substances without regard to medical need, without individual treatment plans, and without physical examinations. Like all drug traffickers, they focused solely on making money and staying out of jail. But thanks to the hard work of our federal and local partners, we are shutting down these dangerous pill mills, seizing their money and assets, and sending the owners, operators, and doctors to jail. You cannot deal drugs hiding behind a medical license.”
“The significance of today’s takedown is that we have dismantled the nation’s largest criminal organization involved in the illegal distribution of pain killers,” said Special Agent in Charge for FBI Miami Gillies. “Up until today, efforts focused on the demand by targeting individual users. Today, we attacked the source and choked off the supply.”
DEA Special Agent in Charge Trouville stated, “This indictment reflects our continued multi-prong attack on those who contribute to the illegal diversion of pharmaceutical drugs from the pill mills of Florida, to the streets of communities across the United States. The DEA has the unique ability to use both criminal and administrative tools to put drug traffickers out of business.”
IRS Special Agent in Charge Gonzalez stated, “When any serious criminal activity is identified, IRS will commit resources to work side by side with our law enforcement partners to dismantle major drug trafficking organizations and their money laundering operations. Our special agents effectively traced the flow of monies, identified the individuals who profited from these illegal activities and seized the assets purchased using the ill-gotten gains.”
“Thanks to the efforts of law enforcement and lawmakers, Broward County is losing its dubious distinction as the pill mill capital of the country,” Broward Sheriff Lamberti said. “Unfortunately, deadly prescription drug abuse continues and local, state and federal authorities must keep up the fight to combat it.”
Hollywood Assistant Police Chief Granteed stated, “Since 2003, the Hollywood Police Department and the South Broward Drug Enforcement Unit, in partnership with the Broward Sheriff’s Office, have been aggressively involved in operations like this to fight illegal pain clinics throughout Broward County. This type of joint police action is the only way to prevent trafficking in oxycodone, doctor shopping, and the deaths that result from overdoses. We will continue this fight and not rest until every illegal pain clinic is closed.”
“Oxy is a contemporary plague. We are very happy to have partnered with the agencies involved in this operation and to have played a role in such a significant undertaking. It is our hope that through these efforts and other similar operations we can reduce the illicit use of oxy and save lives,” stated Chief Lynn of the Davie Police Department.
According to the indictment, the defendants operated the clinics as pill mills that offered patients prescriptions for oxycodone and other controlled substances without any legitimate medical purpose and outside the usual course of professional medical practice. Consequently, individuals, including addicts and traffickers, seeking to buy large quantities of oxycodone and other controlled substances would travel from as far as Tennessee, Ohio, Kentucky, West Virginia and elsewhere to obtain prescriptions at the defendants’ clinics. Business was such that the defendants hired security guards to attempt to control the fights and arguments that would often erupt between patients waiting in the clinic lobbies for their physical examinations or prescriptions.
To execute the scheme, the defendants hired complicit doctors who agreed from as early as their job interviews to prescribe oxycodone and other controlled substances to patients without regard to medical necessity, with only a cursory physical examination of the patient, and in violation of numerous federal and state laws and DEA regulations regarding the storage and distribution of controlled substances. The doctors typically prescribed a “cocktail” of controlled substances, including large quantities of oxycodone (30 mg and 15 mg), Xanax (2 mg) and/or Soma, with no individualized treatment plans or showing of medical need. In return, the complicit doctors were paid on a per capita basis depending on the number of patients they examined each day.
According to the indictment, by 2010, the complicit doctors were allegedly examining close to 500 patients each day at just one clinic, American Pain Clinic. In fact, from July 2008 through March 2010, approximately 66,871 prescriptions were allegedly filled from American Pain Clinic. Of the prescriptions filled at American Pain Clinic, approximately 96 percent were for either oxycodone or alprazolam. Moreover, about 80 percent of the prescriptions filled at American Pain Clinic were for individuals who listed an address outside of Florida.
The indictment also charges Steven Goodman, who was the owner of a pharmaceutical wholesaler, Medical Arts Inc., with participation in the racketeering criminal enterprise (count 1). Under federal law, Medical Arts Inc. was required to report to the DEA suspicious orders of controlled substances. Suspicious orders include orders of unusual size and frequency, and orders deviating substantially from normal patterns. DEA notified Medical Arts Inc. that the defendants’ clinics appeared to be operating as illegal pill mills. Notwithstanding such notice, Medical Arts continued to supply the defendants’ clinics with approximately one million dosages of oxycodone and conspired to obstruct a governmental investigation into the clinics.
In addition to the illegal distribution of controlled substances, many of the racketeering defendants in count 1 are alleged to have participated in large scale fraudulent telemarketing activity. The racketeering defendants allegedly operated and managed two large illegal time share resale businesses, in which they made false statements to victims to induce them to pay fees for non-existent marketing and sales activities. These timeshare telemarketing schemes generated millions of dollars in profit for these defendants.
The indictment further alleges that many of the racketeering defendants, under the direction of Jeffrey George, were also involved in the illegal Internet distribution of anabolic steroids through South Beach Rejuvenation and Health Inc., a company that he owned and controlled. According to the charges, South Beach Rejuvenation and Health Inc., allegedly sold steroids to customers without first conducting in-person patient examinations, as required by federal law. Once again, the racketeering enterprise used complicit doctors to issue thousands of prescriptions for steroids. This criminal activity generated millions of dollars for the defendants.
Lastly, the indictment alleges that the racketeering defendants engaged in wide-ranging violence, including kidnapping, extortion, assault, aggravated assault with a firearm, and other crimes of violence against competitors and individuals whom they suspected of stealing or other disloyalty.
To date, the government has seized approximately $4.7 million in cash from the defendants’ residences, various houses, and expensive automobiles worth more than $9 million. The indictment also seeks the forfeiture of approximately $40 million in cash and assets, representing the illegal proceeds of the pill mill operations. Among the assets sought to be forfeited are a 2010 Range Rover, three residential properties in Lake Worth and expensive watches, including a Rolex Submariner, a Chopard and Patek Phillipe watches.
If convicted, the defendants face a statutory maximum penalty of 20 years in prison on count one, 10 years on count two, 20 years on count three, 20 years on count four, and five years on count five.
Today’s case, dubbed Operation Oxy Alley, is the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.
A separate press release is being issued by the Office of the State Attorney, Fifteenth Judicial Circuit in Operation “Prescription for Death,” which addresses state murder and trafficking charges relating to some of these defendants.
U.S. Attorney Ferrer commended the FBI, DEA, IRS-CI, the Palm Beach County Sheriff’s Office, the Broward Sheriff’s Office, the Hollywood Police Department, the Boca Raton Police Department and the Davie Police Department for their work on Operation Oxy Alley. U.S. Attorney Ferrer also noted the cooperation of the Palm Beach State Attorney’s Office. U.S. Attorney Ferrer also thanked the Delray Beach Police Department, Jupiter Police Department, West Palm Beach Police Department, Boynton Beach Police Department, Medley Police Department, Homestead Police Department, North Miami Beach Police Department and Sunny Isles Police Department for their assistance in this operation. This case is being prosecuted by Assistant U.S. Attorneys Paul F. Schwartz, Lawrence D. LaVecchio and Strider Dickson.
An indictment is only an accusation and the defendants are presumed innocent until proven guilty.