Michigan doc charged in $120 million healthcare fraud, money laundering scheme

A physician who the top prescriber of oxycodone in Michigan from 2016 to 2017 was charged in an indictment this week with a $120 million healthcare fraud and money laundering scheme that involved the alleged medically unnecessary distribution of more than 2.2 million doses of controlled substances, and the administration of medically unnecessary injections. These purportedly resulted in patient harm.

Francisco Patino, 65, of Wayne County, Michigan, was charged in the superseding indictment with one count of conspiracy to commit healthcare fraud and wire fraud, one count of conspiracy to commit money laundering and one count of money laundering.

These charges are in addition to the two counts of healthcare fraud and one count of conspiracy to defraud the United States, and pay and receive healthcare kickbacks, that was charged in the initial indictment. A trial has been scheduled to begin on April 7.

WHAT’S THE IMPACT

The indictment alleges the laundering of the proceeds of the healthcare fraud scheme to falsely portray Patino as a legitimate doctor through the publication of a diet book and plan described as the “next Atkins,” paid-for appearances on a nationally syndicated television show, and the sponsorship of boxers, cage fighters and prominent Ultimate Fighting Championship world champions and hall-of-famers.

Patino owned, controlled and operated numerous pain clinics and laboratories in Michigan — including Global Quality Inc., RenAMI, FDRS and Patino Laboratories — and from 2008 until his arrest in 2018, he allegedly induced patients to come to his clinics by offering unnecessary prescriptions for addictive opioids, of which he ultimately prescribed over 2.2 million doses, including fentanyl, oxycodone and oxymorphone.

Patino prescribed these opioids to Medicare beneficiaries, some of whom were addicted to narcotics. Some of these opioids were allegedly resold on the street. Fentanyl is one of the most potent opioids available for human use.

Patino is charged with forcing patients to submit to unnecessary and sometimes painful back injections and other procedures in exchange for the opioid prescriptions as part of the scheme. He also allegedly persisted with these unlawful practices even after Medicare informed him that the injections violated Medicare’s rules, and after he entered into a consent order with the State of Michigan that his prescription of opioids “constitute[d] a violation of the public health code.”

He also is accused of ordering unnecessary urine drug testing in exchange for illegal kickbacks.  Patino was apparently aware that his ownership structure and kickbacks were a violation of law and authored emails acknowledging that such ownership constituted  a “violation of the Stark and Anti-Kickback laws,” and attempted to conceal and disguise the ownership structure and scheme in order to keep himself “out of Federal Prison and having all our assets seized to pay a 15 million dollar fine.”

Patino is also accused of conspiring to commit money laundering  in connection with the creation and promotion of the “Patino Diet” plan, which Patino described to others as the “next Atkins diet.” In order to conceal and disguise his illegal plot, Patino allegedly paid for the authorship and publication of a book touting the diet plan, entitled “The Age of Globesity,” and paid hundreds of thousands of dollars in order to promote the diet plan and appear as the exclusive medical expert on a nationally syndicated television show.

WHAT ELSE YOU SHOULD KNOW

In addition to concealing the scheme by paying money to falsely portray himself as a media personality and a legitimate physician, the superseding indictment alleges that Patino laundered money by entering into sham contracts or employment relationships to pay others on his behalf to sponsor boxers, mixed martial artists and Ultimate Fighting Championship combatants, including UFC world champions and hall-of-famers. He also allegedly withdrew the proceeds derived from the conspiracy to live an extravagant lifestyle and spend money on luxury clothes, real estate and international travel, including multiple trips to the Cayman Islands.

The charges against Patino are related to a broader investigation into the Tri-County Network of pain clinics in Michigan and Ohio, which involves over $300 million in alleged Medicare fraud and distribution of more than 6.6 million doses of controlled substances. In connection with the investigation, 22 defendants, including 12 physicians, have previously pleaded guilty or been found guilty at trial.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty.

THE LARGER TREND

Of the more than $3 billion in fraud settlements and judgments the government recovered from civil cases involving fraud and false claims in the previous fiscal year, $2.6 billion involved healthcare, according to the Department of Justice.

The cases include drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians.

The amounts included in the $2.6 billion reflect only federal losses, but in many of these cases the department was instrumental in recovering additional millions of dollars for state Medicaid programs.

Of the $3 billion in settlements reported for the fiscal year ending September 30, more than $2.1 billion arose from lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act. The government paid out $265 million to the individuals who exposed fraud and false claims by filing these actions.

Twitter: @JELagasse

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