DENVER, CO. – Two Western Colorado doctors, Sam Jahani, M.D., 49, of Cleveland, Texas, and Eric Peper, D.O., 53, of Summerland Key, Florida, were indicted by a federal grand jury on August 3, 2011 on charges related to health care fraud, money laundering and dispensing controlled substances in which four cases resulted in death. Jahani was arrested by federal agents without incident in Texas. Peper has yet to be arrested. Jahani will make an appearance in U.S. District Court in Beaumont, Texas this afternoon. No court appearance has yet been set for Peper. At a later date, after they appear in their home districts, they will be ordered to appear in U.S. District Court in Colorado.
According to the indictment, which was unsealed at the time the defendants were arrested, between January 1, 2006, and April 30, 2010, in Colorado, Jahani and Peper did knowingly and willfully execute and attempt to execute a scheme to defraud health care benefit programs, namely Medicaid, Medicare, and commercial health care plans, and to obtain, by means of material false and fraudulent pretenses, money and property owned by and under the custody and control of these health care benefit programs, in connection with the delivery of and payment for health care benefits, items and services.
Specifically, Jahani operated a medical business called Urgent Care, Inc. which was formed on November 1, 2005. He conducted business using the Urgent Care name at three locations: 1) 164 West 3 rd Street in Delta, Colorado; 2) 2305 South Townsend Avenue, Unit B in Montrose, Colorado; and 3) 517 North 1 st Street in Grand Junction, Colorado. Peper was an employee of Jahani, and worked at the Delta and Grand Junction offices.
Jahani and Peper allegedly prescribed controlled substances to patients without determining a sufficient medical necessity for the prescription to patients in a manner which was inconsistent with the usual course of professional practice and for other than legitimate medical purposes. Further, they caused patients to fill prescriptions for controlled substances at various pharmacies, allowing the pharmacies to file claims and obtain reimbursement for those prescriptions from health care benefit programs used by the patients submitting the prescriptions. As part of the scheme, Jahani and Peper prescribed controlled substances in quantities and dosages that would cause patients to abuse, misuse, and become addicted to the controlled substances. They also allegedly prescribed controlled substances to patients knowing that their patients were addicted to the controlled substances, misusing the controlled substances, or “doctor-shopping”. They also prescribed controlled substances knowing that their prescribing endangered their patients’ lives, and if taken as directed, their prescriptions would be expected to result in accidental fatal overdoses. The controlled substances prescribed to patients were of such strength that their prescribing became a contributing factor in the patients’ overdose deaths. The prescriptions written by both doctors included Schedule II pain killers, including Oxycodone (such as Percocet and OxyContin), Morphine, Methadone and Fentanyl; Schedule III pain killers, (such as Vicodin); and Schedule IV anti-anxiety medications, such as Xanax, Valium, Ativan Ambien and Klonopin. As a result of the doctor’s prescription practices, the indictment alleges that four people died.
Also, the two doctors knowingly falsified, and caused to be falsified, medical records. They engaged in “upcoding” to be paid more money from health care benefit programs, and Jahani billed patients and caused patients to be billed for services not rendered, including serviced claimed to have been provided to patients after the patients’ death. Lastly, Jahani and Peper and others performed acts and made statements to hide, conceal, and cause to be hidden and concealed, the fraudulent scheme and the acts committed in furtherance thereof.
“We count on medical doctors to use their training, skill and judgment to provide the best possible care for their patients,” said U.S. Attorney John Walsh. “Our medical system requires doctors to properly bill health care benefit programs, and when they don’t, they can face criminal consequences. Also, when, as in this case, doctors neglect their responsibilities and abuse the authority they are given to prescribe medications in order to make money while risking the health of their patients, we will act to protect the public with aggressive prosecution efforts.”
“Illegal distribution and abuse of prescription drugs remains a serious issue facing our state and nation,” said DEA Acting Special Agent in Charge Kevin Merrill. “Doctors Jahani and Peper were in a position of trust, and they failed the community they serve. DEA will continue to use our resources to investigate this type of drug trafficking offense to help prevent prescription drugs from being diverted into the wrong hands and endangering the health and public.”
If convicted, Jahani faces life in federal prison, and up to a $250,000 fine for each of the three counts of health care fraud resulting in death. He faces not more than 10 years in prison and up to a $250,000 fine for two counts of health care fraud. He faces not more than 20 years in prison, and up to a $500,000 fine for one count of money laundering conspiracy. He faces not more than 20 years, and up to a $500,000 fine, or twice the value of the property involved, whichever is greater, for ten counts of money laundering. He faces not less than 20 years in prison and up to life, and a fine of not more than $1,000,000 for each of the three counts of dispensing a controlled substance resulting in death. He faces not more than 20 years in prison, and up to a $1,000,000 fine, for each of the twenty counts of illegally dispensing a controlled substance. He lastly faces not more than 10 years in prison, and up to a $500,000 fine for one count of illegally dispensing a controlled substance.
If convicted, Peper faces life imprisonment, and not more than a $250,000 fine for one count of health care fraud resulting in death. He faces not more than 10 years, and up to a $250,000 fine, for each of five counts of health care fraud. He faces not more than 20 years imprisonment, and up to a $500,000 fine, or twice the value of the property involved, whichever is greater, if convicted on one count of money laundering conspiracy. He faces not more than 20 years in prison, and up to a $500,000 fine, or twice the value of the property involved, whichever is greater, for each of the three counts of money laundering. He faces not less than 20 years, and up to life imprisonment, and up to a $1,000,000 fine for two counts of dispensing a controlled substance resulting in death. He faces not more than 20 years, and up to a $1,000,000 fine, for each of twenty-four counts of illegally dispensing a controlled substance. Lastly he faces not more than 10 years in prison, and up to a $500,000 fine for each of two counts of illegally dispensing a controlled substance.
This case was investigated by the Drug Enforcement Administration (DEA), Health and Human Services Office of the Inspector General (HHS OIG), Western Colorado Drug Task Force/Grand Junction Police Department, State of Colorado Attorney General’s Medicaid Fraud Control Unit and IRS-Criminal Investigation.
The case is being prosecuted by Assistant U.S. Attorney Michelle Heldmyer.
The charges contained in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.