Drug Enforcement Administration

Washington, DC

Jesse R. Fong, Special Agent in Charge

February 16, 2005

Contact: SA Heath Anderson

Phone Number: 202-305-8500

New Castle, Virginia Pharmacist Indicted

Daniel Ray Lineberry, 55, of Salem, Virginia, a Pharmacist and Owner of Craig County Medical Center Pharmacy in New Castle, Virginia was indicted on 36 counts including: One Count of mail fraud; twenty-five counts of illegal distribution of a Schedule III controlled substance, and one count of illegal distribution of a schedule IV controlled substance; nine counts of tampering with consumer products and labeling affecting interstate commerce; and one count of Health Care Fraud. 

These charges arose out of a complaint received by the Virginia State Police Drug Diversion Unit in August 2004. A citizen in New Castle, Virginia became concerned when her husband, who suffers from Alzheimer’s disease, became increasingly violent. She contacted the State Police after noting the medication her husband had received from Lineberry did not look right. These pills were sent to the state forensics laboratory and it was determined Lineberry had substituted the medications Seroquel, Aricept, and Zoloft, that were supposed to be dispensed and taken by the patient, with two over-the-counter products—a Vitamin B2 product called riboflavin and Lysine, an amino acid compound. On another occasion, Prozac had been substituted for Zoloft. Additional substitutions were discovered, leading to a search warrant which was conducted on August 20, 2004. Lineberry’s license to dispense medications was summarily suspended on this date. As a result of the search warrant and media coverage, many additional patients came forward with misbranded medications. These included substituting acetaminophen for Norvasc and Tylenol for Hydrocodone. Lineberry has been on active probation with the Virginia Department of Health Professions since 1999 for two other product substitutions he had committed.

Another part of the scheme involved Lineberry filling, and continually re-filling medication for patients---that he did not have authorization from a qualified health care provider to do. These refills included a large number of hydrocodone prescriptions. Hydrocodone is a painkiller and a schedule III controlled substance. Lineberry engaged in the same scheme with drugs like Xanax, Valium, and Darvocet, all schedule IV controlled substances.
Additionally, Lineberry submitted fraudulent health care claims to the Virginia Medicaid Program and to Anthem Blue Cross/Blue Shield for payment. Some of these were “phantom” billings for patients of a group home. The home was decertified in 2001 and the patients were moved to a Roanoke facility. Lineberry knowingly continued to bill the Virginia Medicaid program for over $90,000 in medication not authorized and not received by the group home patients through August 2004. 
If convicted of all the charges, Lineberry faces a maximum prison term of 133 years and a fine of $9,000,000. 

The investigation was conducted by the Virginia State Police Drug Diversion Unit, U.S. Department of Health and Human Services - Office of Investigations, Virginia Department of Health Professions, Food and Drug Administration-Office of Criminal Investigation, Richmond Office of Drug Enforcement Administration - Diversion Unit, Anthem Blue Cross Blue Shield Financial Investigation Unit, Virginia Attorney General - Medicaid Fraud Control, United States Postal Inspection Service and the Health Care Fraud Investigator for the U.S. Attorney’s Office. Assistant United States Attorney C. Patrick Hogeboom III is prosecuting the case. For further information, please contact the United States Attorney Office.

A Grand Jury indictment is only a charge and not evidence of guilt and the defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.


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