San Joaquin County Doctor Convicted of Prescribing Opioids Without Medical Necessity to Patients in Federal Court

The problem with physicians prescribing opioid drugs to patients where there is not a proper medical and prescription history taken, lack of a proper medical examination to confirm the legitimacy of patients' pain complaints, and failure to assess the risk of addiction issues continues. 

On November 19, 2021, Dr. Edmund Kemprud, age 78, was convicted in Sacramento  federal court of 14 counts of illegally prescribing opioids and other controlled substances to patients. As is common in these cases, undercover officers went to his office in order to obtain evidence that would substantiate the charges. Usually pain medication patients do not want to testify against their physicians so undercover operations are common. 

According to evidence presented at trial, Dr. Kemprud was a physician licensed to practice medicine in California and worked in several locations around the East Bay and Central Valley. One of the more inflamatory allegations was that one of the offices was in the back room of a nail salon and medi-spa in Tracy, California. 

Dr. Kemprud prescribed commonly abused prescription drugs, including Hydrocodone, Alprazolam, and Oxycodone. The government introduced evidence that certain prescriptions were outside the usual course of professional practice and not for legitimate medical purpose. 

The government introduced evidence at trial showing that Dr. Kemprud ignored "red flags" which are indications that his patients were addicts or that they were diverting the drugs during the undercover patient visits. Dr. Kemprud charged $79 a visit and the evidence was that he often spent less than five minutes with a patient and would see 30 patients in less than a day. In family practice, those numbers are not unusual for follow up visits but when prescriptions for serious pain medications are being written -- a more extensive visit is expected.

Case Study: Federal Embezzlement Charges Against California Controller. Top 5 Things to Learn From This Indictment

As attorneys specializing in white collar crime, we have represented businesses who wanted help in presenting a fraud case to the local police or FBI as well as representing those who have been charged with such offenses. 

Recently, a controller for two Southern California companies was charged in  a federal grand jury Indictment with embezzling $3 million. After providing you with a summary of the allegations, we will delve into what can we learn from this recent Indictment. 

With respect to this particular case, remember that an Indictment does not mean that the accused is guilty, nor is it proof of guilt since our Constitution provides that the accused is presumed innocent until proven guilty beyond a reasonable doubt.

On November 18, 2021, a federal grand jury in Santa Ana, California in the Central District returned a 15-count Indictment accusing the former controller, Rosalba Meza, for two Anaheim-based companies, Trilogy Plumbing, Inc. and Matrix Management, LLC, of embezzling more than $3 million by directing the transfer of company funds to bank accounts that she controlled. She is scheduled to be arraigned on the indictment today (November 29) in United States District Court in Santa Ana.

It is alleged that in February 2019, Ms. Meza told executives in these two companies that they did not have funds to meet payroll obligations but failed to inform the executives that she had been embezzling from the companies. Several months later, while the companies were the subject of an IRS enforcement action because of unpaid payroll taxes, Ms. Meza allegedly told the executives that she did not pay the quarterly payroll taxes because she instead had used those funds to pay employees. 

The Indictment alleges that, once the funds were transferred to her accounts, Ms. Meza used the stolen money to make approximately $292,137 in cash withdrawals at bank branches and more than $1 million in withdrawals at ATMs in the United States and Mexico. Ms. Meza also allegedly wired approximately $870,209 to bank accounts in Mexico owned by a family member and another $250,000 in transfers to other family members and friends. The Indictment also alleges that Ms. Meza filed tax returns for the years 2017 through 2019 that failed to report as income the embezzled funds.

What can we learn from this Indictment? First, like most other people accused of embezzlement, Ms. Meza does not have any criminal history. Past studies have shown that less than 10 percent of people charged with embezzlement have any prior criminal history. This means that background checks alone will not protect you. 

California Rehabilitation Therapy Company With 11 Skilled Nursing Facilities Settles Medicare False Claim Allegations for Alleged Unnecessary or Unreasonable Services

Qui Tam Case Involving SNFs

Skilled nursing facilities (SNFs) which offer rehabilitation therapy services have a large number of billing specific rules and regulations. The charting for the SNFs is also demanding on the staff. Issues with charting and following billing rules and regulations can create risks of audits and qui tam or false claim lawsuits for SNFs. A recent case shows how such issues play out. This case was initiated by a "whistleblower" who was a former director of rehab and will get a $360,000 payout as part of the settlement. The qui tam case is captioned United States ex rel. Pennetti v. Interface Rehab, et al., No. CV-14-4133 (C.D. Cal.).

On or about July 23, 2021, Interface Rehab (Interface), headquartered and operating in Orange County, California agreed to pay $2 million to resolve allegations that it violated the False Claims Act by causing the submission of claims to Medicare for rehabilitation therapy services that were allegedly not reasonable or necessary. The claims resolved by the settlement are allegations only and there has been no determination of liability. 
It is very common for these cases to settle since the legal and expert fees alone can cost hundreds of thousands of dollars. Worse, if the case goes to trial and the health care facility loses, the provider can be barred from Medicare. A settlement offers a certain result. However, these cases need to be fought aggressively in order to keep the settlement payments down or to get the cases dismissed if possible.