Detroit-Area Doctors Charged with Illegal Distribution of Prescription Drugs and Health Care Fraud

An indictment was unsealed today charging Dr. Hussein “Sam” Awada, 43, and Dr. Luis Collazo, 53, with the illegal distribution of prescription drugs and health care fraud, United States Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Special Agent in Charge Robert L. Corso, U.S. Drug Enforcement Administration (DEA), Detroit Field Division; Special Agent in Charge Lamont Pugh, Health and Human Services, Office of Inspector General; and Special Agent in Charge,Robert D. Foley, III, Federal Bureau of Investigation.
The 68-count superseding indictment charges that from December 2010 through 2012, Dr. Awada and Dr. Collazo distributed controlled substances, including the highly addictive drugs Oxycodone, Roxicodone, and Opana ER, outside the course of usual medical practice and for no legitimate purpose. Both defendants were also charged with billing Medicare and other health insurance programs for medically unnecessary testing and procedures.
The superseding indictment alleges that Dr. Awada used recruiters, including co- defendant James Lyons, 39, to bring patients to his Midwest Family Practice at two locations in Warren. After ordering unnecessary medical procedures, Dr. Awada gave controlled substance prescriptions to the recruiter in exchange for cash payments. The recruiter then sold the pills for profit on the illegal street market.
The superseding indictment also charges that Dr. Awada and Dr. Collazo committed health care fraud by billing for unnecessary office visits, submitting patients brought by recruiters to medically unnecessary testing and procedures (including X-rays, nuclear cardiac stress tests, electrocardiograms, blood work, and injections), and by causing Medicare and other insurance programs to pay for unnecessary controlled substances.
According to the superseding indictment, Dr. Collazo participated in the drug diversion and health care fraud scheme while he worked for Dr. Awada at the Midwest Family Practice on 12 Mile Road in Warren.
More than $600,000 in funds and three automobiles were seized during the course of the underlying investigation. The United States will pursue forfeiture of all proceeds and property traceable to the offenses charged.
U.S. Attorney McQuade said, “Health care fraud diverts taxpayer dollars from needy patients to greedy criminals. We hope that our enforcement efforts will deter other doctors from engaging in fraud.”
Robert L. Corso, DEA Special Agent in Charge said, “This indictment is another example of DEA’s determination to combat the troubling prescription drug abuse problem in this country. These two doctors abused their positions of trust and jeopardized the lives of many individuals by illegally distributing highly addictive opiate painkillers. The DEA and our partners in law enforcement will continue to investigate and bring to justice those individuals that are responsible for the illegal distribution of prescription medicines.”
“The improper distribution of controlled substances poses a significant threat not only to the financial health of the Medicare and Medicaid programs but to the well-being and safety of the patients that these programs serve,” said Lamont Pugh, III, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General-Chicago Region. “The OIG, along with our law enforcement partners, will aggressively investigate allegations of this nature in order to protect taxpayer dollars and ensure patient safety.”
Robert D. Foley, III, FBI Special Agent in Charge said, “These charges represent a serious abuse of the health care system. Those motivated by greed who unlawfully take from a system designed to care for patients will be tirelessly pursued by the FBI and prosecuted for their crimes.”
Dr. Collazo will be arraigned on the superseding indictment on Friday, June 21. Dr. Awada will be arraigned on Monday, June 24.
An indictment is only a charge and is not evidence of guilt. Each defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case was investigated by special agents of the DEA, HHS-OIG, and FBI. The case is being prosecuted by Assistant U.S. Attorneys Wayne Pratt, Sarah Resnick Cohen, and Gjon Juncaj and Special Assistant U.S. Attorney Justin Bidwell.

Former Director of Cleveland VA Medical Center Indicted on Conspiracy, Fraud, Money Laundering, and Other Charges

The former director of the Cleveland VA Medical Center was indicted on 36 counts, accused of accepting bribes in return for influencing development projects and decisions involving the U.S. Department of Veterans Affairs, law enforcement officials said.
William D. Montague, 61, of Brecksville, was charged with conspiracy to commit honest services mail fraud, bribery, money laundering, multiple counts of wire fraud, mail fraud, disclosing public contract information, and other charges.
The indictment is part of the Cuyahoga County corruption investigation.
“As a Veterans Affairs Medical Center Director, William Montague misled staff and misused his position to enrich himself and businesses pursuing contracts with the Veterans Administration,” said Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland Office. “The arrest of Montague reflects law enforcement’s continued dedication to root out corruption at any level.”
“Violating the public trust for personal gain cannot be tolerated, particularly at the expense of our nation’s heroes,” said Gavin McClaren, United States Department of Veterans Affairs-Office of Inspector General, Resident Agent in Charge, Cleveland.
The Louis Stokes Cleveland VA Medical Center was approximately the fifth largest in the country, annually serving about 95,000 veterans who lived in 24 counties in Northeast Ohio. Montague began working for the VA in 1975 and served as director of the Cleveland VA Medical Center from 1995 until his retirement in 2010, according to the indictment.
The VA had been operating medical facilities in both Brecksville and the Wade Park neighborhood in Cleveland. In the early 2000s, the VA began exploring the feasibility of consolidating the facilities into one location, known as the VA Development Project. The combined facility would include a domiciliary, office space, and parking, according to the indictment.
The VA selected Business 42 to develop and managed the VA Development Project. Michael Forlani was the sole member of Business 42, and he had multiple other business interests, including as president and part-owner of Doan Pyramid LLC, according to the indictment.
Forlani is currently serving eight years in prison after pleading guilty to racketeering, bribery, and other charges.
On or about January 1, 2010, Business 66 began operations, having purchased Doan’s assets. Business 66 operated out of Doan’s former office space and retained many Doan employees, according to the indictment.
Montague solicited and accepted gifts, payments, and other things of value from Forlani and Business 66, including a consulting contract between Business 66 and House of Montague, a financial services company Montague started in 2008, according to the indictment.
The indictment details numerous instances between 2007 and 2010 in which Montague took actions on behalf of Forlani or others. Those activities include helping expedite getting a bond rating from Standard & Poors and desired ratings, help getting desired legal opinions from the VA, help getting desired parking rates, and other activities.
Montague retired from the VA on February 3, 2010, about a month after Business 66 began operations. On February 15, 2010, Business 66 issued a check to House of Montague for $2,750, the first of many approximately monthly checks. On December 29, 2010, Montague became a member of the Business 66 Board of Advisers, according to the indictment.
From about February 15, 2010 through May 2012, Business 66 paid House of Montague $156,750, according to the indictment.
In a different scheme, Montague entered into a consulting agreement with a company identified as Business 73, headquartered in Virginia. The company agreed to pay Montague $2,500 a day for a minimum of 24 days, between July 1, 2008 and July 1, 2009, while Montague was still employed by the VA, according to the indictment.
Montague emphasized his ability to access key decision makers in the VA quickly and effectively as one of the reasons he could help Business 73 develop joint ventures and/or expand services provided by the VA. Montague told an official at Business 73 that he had consulted with a VA ethics panel and that he had authorization to do the consulting work as long as he took vacation time to perform the work. In fact, Montague had no such authorization, according to the indictment.
The case was prosecuted by Assistant United States Attorneys Antoinette T. Bacon and Nancy L. Kelley following an investigation by the FBI and United States Department of Veterans Affairs-Office of Inspector General.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record (if any), the defendant’s role in the offenses, and the characteristics of the violations. In all cases, the sentences will not exceed the statutory maximum and in most cases they will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

Michigan Doctor Pleads Guilty to Health Care Fraud

BUFFALO, NY—U.S. Attorney William J. Hochul, Jr. announced today that Fitzgerald Anthony Hudson, 53, of Dearborn Heights, Michigan, pleaded guilty before Chief U.S. District Chief Judge William M. Skretny to health care fraud. The fraud related to the defendant lying about his qualifications to practice medicine. The charge carries a maximum penalty of 10 years in prison, a fine of $250,000, or both.
Assistant U.S. Attorney Aaron J. Mango, who is handling the case, stated that in August 2008, the defendant submitted an application to Jones Memorial Hospital in Wellsville, New York, for appointment to the medical staff. Prior to that, Hudson was an undergraduate student at York University in Ontario, Canada, from September 1987 to August 1990; however, the defendant did not obtain enough credits to graduate and did not earn a bachelor’s degree. The defendant then attended medical school at Ross University, after which he worked in the Warren Hospital Family Practice Residency Program in Phillipsburg, New Jersey, from July 2002 until July 2003. At that time, Hudson was suspended from his duties as a resident and dismissed from the residency program due to academic incompetence. This means, in essence, that the defendant never received his medical degree or license and was not legally qualified to practice medicine.
During the course of this prosecution, the government presented evidence that while employed at Jones Memorial Hospital, Hudson treated a 5-year-old child who subsequently died shortly after being treated by the defendant. That case is now the subject of an ongoing wrongful death civil suit in state court.
In addition, from February 2008 to June 2008, the defendant was employed at the Emergency Department at the Claxton-Hepburn Medical Center in Ogdensburg, New York. Hudson resigned in June 2008 due to an unfavorable incident.
“Each and every day, millions of Americans entrust their health to the care of trained medical professionals,” said U.S. Attorney Hochul. “By misrepresenting his background and education, this defendant put in danger the lives of those who came to him seeking emergency care. This office will continue to vigorously prosecute all fraud, particularly where such crime affects that which is most precious to us all—our health.”
In the application the defendant submitted to Jones Memorial Hospital, he (a) indicated that he disassociated with the Claxton-Hepburn Medical Center because it was “too far away”; (b) indicated that he had never been denied or had suspended or restricted completion of training or certification of completion of training by any healthcare facility; and (c) stated that he earned a bachelor’s degree from York University. Hudson was aware of the false statements and representations at the time he made them and acted knowingly and willfully in submitting the false application to Jones Memorial Hospital.
As a result of the defendant’s false application for medical staff appointment, Hudson was granted privileges at Jones Memorial Hospital in Emergency Medicine. Between August 2008 and November 2009, the defendant worked as a physician at the Emergency Department at Jones Memorial Hospital and, based on that work, payments totaling approximately $227,548.35 were received from Medicare, BlueCross BlueShield of Western New York, Univera Healthcare, and Independent Health for services rendered by the defendant.
The plea is the culmination of an investigation on the part of special agents of the Federal Bureau of Investigation, under the direction of Richard M. Frankel, Acting Special Agent in Charge; special agents of the U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations, under the direction of Thomas O’Donnell, Special Agent in Charge; and investigators with the Medicaid Fraud Control Unit of the New York State Attorney General’s Office.
Sentencing is scheduled for September 9, 2013, at 9 a.m. before Judge Skretny.