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GetSmart About Drugs - A DEA Resource for Parents

News Release
April 6, 2005

Doctor Pleads Guilty to Defrauding Medicare and
Illegally Distributing Controlled Substances

APR 6 -- (HOUSTON, TX) United States Attorney Michael Shelby announced that Callie Hall Herpin, M.D., 34, a Houston doctor, pleaded guilty today to one count of conspiracy to defraud Medicare and one count of illegally distributing controlled substances, specifically hydrocodone products and codeine cough syrup. Herpin admitted she participated in a conspiracy that resulted in fraudulent billings to Medicare of $30 million. She also admitted to being the central figure in a conspiracy to illegally distribute more than 1.7 million hydrocodone tablets and 2500 gallons of codeine cough syrup.

At a hearing held this morning before United States District Judge David Hittner, Herpin admitted that she and her co-defendant, Etta Mae Williams, engaged in both conspiracies. Williams pleaded guilty yesterday to both conspiracies, as well as a money laundering count, before Judge Hittner. Herpin admitted that she and Williams “sold” certificates of medical necessity (CMN) and prescriptions for motorized wheelchairs and other durable medical equipment (DME) to certain marketers and DME suppliers for approximately $200 cash. Dr. Herpin and Williams wrote no less than 920 fraudulent motorized wheelchair CMNs and prescriptions and received no less than $184,000 in cash proceeds in return. Herpin admitted she did not examine all of the patients to determine their eligibility for a motorized wheelchair and most, if not all of her “patients,” were not eligible. In many instances, the marketers brought copies of the Medicare beneficiaries' driver's license and Medicare card to Williams and Herpin, who used the information to produce the fraudulent CMNs. Various DME suppliers used the fraudulent CMNs generated by Williams and Herpin to bill Medicare in excess of $30 million.

At the same time, Herpin admitted that she and Etta Mae Williams “sold” prescriptions for controlled substances to individuals for cash. The prescriptions were not written in the normal course of Dr. Herpin's medical practice and they were not medically necessary. Prescriptions for controlled substances, including hydrocodone and promethazine with codeine (known as “syrup” on the street), were written by the hundreds and sold to certain individuals. Dr. Herpin pre-signed large numbers of controlled substance scrips in blank that Etta Williams sold when Herpin was out of the office. Dr. Herpin's routine prescription was for 100 tabs of hydrocodone and one pint of syrup. Most prescriptions also allowed multiple refills. Herpin's price for a prescription was determined by the number of drugs and number of refills requested. Several individuals, including Etta Williams, purchased multiple scrips in fabricated names. Williams and Herpin would sell as many as 50 scrips to one individual at one time. Williams and others, including co-defendant Karen Williams, would compile a list of fictitious patient information, such as addresses, telephone numbers, and dates of birth, to mirror the illegal scrips. The purchasers would take the fraudulent scrips and the list to willing pharmacists, including the co-defendants in this case, who would fill them for cash. Herpin admitted there was no legitimate medical reason for the prescriptions During the course of the charged conspiracy, the co-defendant pharmacists dispensed in excess of 1.7 million tabs of hydrocodone and 2500 gallons of promethazine with codeine based on prescriptions written by Dr. Herpin and/or under her DEA number. Herpin admitted that she and Etta Williams together wrote no less than 17,086 prescriptions for controlled substances and received no less than $1,700,860 in cash proceeds. Dr. Herpin and Etta Williams both have agreed to cooperate with the government against their co-defendants and in other investigations. Each has also agreed to an order of forfeiture of approximately $1.88 million.

Herpin and Williams face a maximum sentence of five (5) years imprisonment, three years supervised release, and a fine of $250,000 on each of the two conspiracy counts. Williams also faces a maximum sentence of twenty (20) years imprisonment, three years supervised release, and a fine of $500,000 on the money laundering count.

The criminal charges were a result of a joint investigation being conducted by agents of the U.S. Department of Health and Human Services, Office of Inspector General (HHS/OIG), the Drug Enforcement Administration (DEA), the Federal Bureau of Investigation (FBI), and the Internal Revenue Service Criminal Investigation (IRS/CI). This case was prosecuted by Assistant United States Attorneys Al Balboni and Shannon Voll.


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