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News Release
April 12, 2005

Federal Authorities Arrest Pain Management Clinic's Owner/Operator And Physicians-Seize $10 Million in Assets

APR 12--NEW ORLEANS, LOUISIANA - William J. Renton, Jr., Special Agent in Charge, Drug Enforcement Administration and Jim Letten, United States Attorney for the Eastern District of Louisiana, announce that on April 12, 2005 , Special Agents of the DEA, working closely with federal, state and local law enforcement including the Federal Bureau of Investigation, and the Internal Revenue Service, assisted by the Louisiana State Police, Louisiana Board of Pharmacy, Louisiana State Medical Board, Sheriff’s Offices from St. Bernard, Jefferson, Plaquemines, Terrebonne and St. Tammany, and Police Departments in New Orleans, Kenner and Slidell, have arrested the following individuals pursuant to issuance of federal arrest warrants:

CHERLYN “COOKIE” ARMSTRONG, age 45, of New Orleans, Louisiana;
DR. SUZETTE L. CULLINS, M.D., age 43, of New Orleans, Louisiana;
DR. JOSEPH F. GUENTHER, M.D., age 71, of Metairie, Louisiana; and
DR. BETTY R. DE LOACH, M.D., age 66, of Kenner, Louisiana,

for violations of Title 21, United States Code, Section 846, conspiracy to illegally distribute controlled substances.

ARMSTRONG and CULLINS are additionally charged with violations of Title 21, United States Code, Section 859, distribution of controlled substances to persons under age twenty-one.

ARMSTRONG is also charged under Title 18, United States Code, Section 1956, with conspiracy to conduct money laundering to promote the illegal distribution of controlled substances, and with Title 18, United States Code, Section 1957, conspiracy to conduct financial transactions in amounts in excess of $10,000 with proceeds known to be derived from the illegal distribution of controlled substances.

According to facts set forth in the criminal complaint filed in United States District Court, ARMSTRONG, CULLINS, GUENTHER and DE LOACH, along with others known and unknown, engaged in a sham operation whereby individuals, including persons under twenty-one years of age, obtained, by paying cash, highly addictive drugs under the guise of “pain management” without regard for medical necessity. According to Title 21, United States Code of Federal Regulations (CFR), Section 1306.04., “a prescription for a controlled substance to be effective must be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice. The responsibility for the proper prescribing and dispensing of controlled substances is upon the prescribing practitioner, but a corresponding responsibility rests with the pharmacist who fills the prescription. An order purporting to be a prescription issued not in the usual course of professional treatment or in legitimate and authorized research is not a prescription within the meaning and intent of Section 309 of the Controlled Substances Act (Title 21, United States Code, Section 829) and the person knowingly filling such a purported prescription, as well as the person issuing it, shall be subject to the penalties provided for violations of the provisions of law relating to controlled substances.”

Additionally, in the affidavit, ARMSTRONG, CULLINS, DELOACH and GUENTHER are alleged to have allowed the same individual patients to receive overlapping prescriptions from each of the three SCHERER’S Clinics. In one documented instance, over a one hundred day period, the same person received from SCHERER’s Clinics twenty prescriptions, each for a twelve to fourteen day supply of the heavily abused drug combination, Hydrocodone, Xanax and Soma. Nineteen of the twenty prescriptions were issued by GUENTHER, CULLINS and DELOACH and were often mere days apart.

According to the affidavit, ARMSTRONG and another individual allegedly established and utilized several corporations to deposit funds from the illegal activities and to launder money. These corporations are identified in the complaint as:


On April 11, 2005, seizure warrants were executed against seventeen (17) bank accounts belonging to ARMSTRONG, SCHERER’S MEDICAL CENTERS, and other listed corporations initiating federal forfeiture proceedings under 21 United States Code, Section 881. The commercial real estate housing SCHERER’S CLINICS, MIA’S PHARMACIES and other commercial and residential properties which were allegedly purchased by ARMSTRONG with drug proceeds were encumbered and are also the subject of federal forfeiture proceedings. The value of all monetary seizures from banks exceeds $4 million.

To further the investigation, this morning, Tuesday, April 12, 2005, federal, state and local law enforcement officers executed eight (8) federal search warrants including:

the residence of ARMSTRONG, New Orleans, Louisiana;

SCHERER’S PAIN MANAGEMENT CLINIC, 72 Westbank Expressway, Gretna, Louisiana;

SCHERER’S PAIN MANAGEMENT CLINIC, 2622 Metairie Lawn Drive, Metairie, Louisiana;

the law office of an attorney, located at the Metairie clinic;

SCHERER’S PAIN MANAGEMENT CLINIC, 560 Oak Harbor Drive, Slidell, Louisiana;

MIA’S PHARMACY, LLC, a/k/a MIA’S PHARMACY #1, 2628 Metairie Lawn Drive, Metairie, Louisiana;

MIA’S PHARMACY SLIDELL, LLC, a/k/a MIA’S PHARMACY #2, 560 Oak Harbor Drive, Slidell, Louisiana; and

THE MEDICINE SHOPPE, 4021 Ponchatrain Drive, Slidell, Louisiana.

Searches executed by Special Agents additionally yielded approximately $1.3 million in cash.
Additionally, Assistant U. S. Attorneys have obtained temporary restraining orders (TROs) restricting the sale of related properties presently totaling an estimated $5 million.

As part of a U. S. Department of Justice and Drug Enforcement Administration initiative to combat the proliferation, diversion and abuse of pharmaceutical drugs, a federal search warrant was executed at MICHAEL’S DISCOUNT PHARMACY, 2401 Veterans Blvd, Suite 19, Kenner, Louisiana. DEA officials also served an administrative notice of immediate suspension of the registration to possess and dispense controlled substances to that pharmacy, because the pharmacy determined by DEA to have committed such acts which would render their registrations inconsistent with the public interest. Immediate suspension of the controlled substance registrations of THE MEDICINE SHOPPE, MIA’S PHARMACY #1 AND MIA’S PHARMACY #2 were also served on the proprietors of those establishments. The DEA registration allowing CULLINS, GUENTHER and DE LOACH to issue prescriptions for controlled substances was likewise immediately suspended.

Jim Letten, United States Attorney for the Eastern District of Louisiana, and William J. Renton, Jr., Special Agent in Charge, Drug Enforcement Administration, speaking to the arrests and searches, made this joint statement:

“ Today’s arrests of physicians and the Scherer Pain Management Clinic owner/operator, as well as the $5 million in monetary seizures, searches and restraint of $5 million worth of real property, is a significant landmark in the culmination of the initial phase of a high impact investigation, led by Special Agents of the DEA, to attack and significantly restrict the wholesale illegal dispensation and distribution of dangerous pharmaceutical drugs under the guise of legitimate ‘pain management.’ The extreme danger and actual harm produced by these clinics, operators, and physicians, as well as associates and others like them, cannot be overstated. As a result of the illegal proliferation of a wide spectrum of highly addictive and dangerous controlled substances, untold numbers of individuals in our communities - including children under 18 years old - are endangered and harmed daily. It is thus critical to the U. S. Department of Justice, the Drug Enforcement Administration, the Federal Bureau of Investigation, the Internal Revenue Service, and our extraordinary partners in state and local enforcement that all of our available assets are brought to bear to identify and attack the problem.

Today’s landmark events, including the arrests of three doctors - is only the beginning of what will be a long, continuing and aggressive investigation and campaign to bring such individuals to justice, and to deter others from illegally profiting at the expense of the health and safety of our citizens.”

The U. S. Attorney reminds citizens that an arrest is an accusation, and that every defendant so charged is, under our Constitution, presumed innocent until proven guilty. Pursuant to federal law, ARMSTRONG, CULLINS, GUENTHER AND DE LOACH will be required to appear before a United States Magistrate Judge today at 2:00 P.M. At that time, Assistant U. S. Attorneys will request that these individuals not be released but rather be detained under federal law until indictment, trial or other disposition of the federal charges.

Supervision of the prosecution of this investigation is being handled by Assistant U. S. Attorney Tony Gordon Sanders.


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