PENNSYLVANIA
A doctor and his wife were charged with being involved in a drug dealing conspiracy involving some members of the Pagans Motorcycle Club and others, officials said.
The illegal drug distribution resulted in the death of a person, officials said Thursday.
An indictment charges Dr.William J. O’Brien III with 95 additional counts of distribution of controlled substances – oxycodone, methadone and amphetamines.
O’Briel allegedly conspired with co-defendants including some members of the Pagans Motorcycle Club to distribute and sell drugs. He is facing up to life in prison if convicted of the felony crimes, officials said.
The estimated street value of drugs allegedly sold by the conspiracy is about $5 million. O’Brien made $2 million in cash from the alleged drug trafficking conspiracy, officials allege.
The indictment charges O’Brien and his ex-wife, a ninth defendant, Elizabeth Hibbs, 54, with money laundering, bankruptcy fraud and making false statements under oath in a bankruptcy proceeding.
Also charged in the conspiracy with O’Brien are the following defendants who live in Philadelphia:
- Michael Thompson,M 49
- Peter Marrandino, 48
- Joseph Mehl, 48
- Patrick Treacy, 47
- Charles Johnson, 46
- Frank Corazo, Jr, 52
- Jennifer Lynn Chambers, 21
Also charged is West Deptford, New Jersey resident Joseph Mitchell, Sr, 39.
Some of the defendants are members of the Pagans Motorcycle Club.
Thompson and Corazo are also charged with health care fraud for allegedly using Medicaid health insurance to pay for the medically unnecessary controlled substances prescribed by O’Brien.
Federal agents arrested six defendants Thursday.
According to the indictment, between March 2012 and January 2015, O’Brien prescribed and his coconspirators unlawfully obtained for resale, approximately 378,914 pills which contained 10 mg, 15 mg or 30 mg of oxycodone and approximately 160,492 methadone pills.
The estimated street value of the controlled substances sold by the conspiracy was estimated at approximately $5 million. O’Brien generated for himself an estimated $2 million in cash proceeds from the alleged drug trafficking conspiracy.
The Conspiracy
According to the indictment, defendants Thompson, Marrandino, Mehl, Mitchell and Treacy were members or associates of the Pagans and conspired with O’Brien to distribute large quantities of dangerous and addictive controlled substances for profit.
Through their connection to the Pagans, the defendants had access to illegal drug distributors.
O’Brien and the defendants allegedly developed a scheme whereby so-called “patients,” who were recruited by the defendants, would typically pay O’Brien a $200 “co-pay” in cash in exchange for medically unnecessary prescriptions for controlled substances.
With cash-paying “patients,” O’Brien could conceal money from creditors and the U.S. Bankruptcy Court where he had filed for Chapter 11 protection for his company WJO Inc., a group of medical practices which he owned.
The indictment further alleges that after filling the prescriptions they got from O’Brien, the “patients” would turn the pills over to the defendants who would sell the pills to drug dealers.
Certain controlled substances, such as oxycodone (30 mg), were in high demand.
Distribution of Controlled Substances Resulting in Death
According to the indictment, in addition to medically unnecessary controlled substances, O’Brien prescribed other drugs for “patients” to create the appearance that he was operating a legitimate medical practice.
Among the other drugs he prescribed was cyclobenzaprine, a muscle relaxant aka Flexeril.
The indictment alleges that on or about Dec. 17, 2013, in Levittown, O’Brien intentionally distributed, for no legitimate medical purpose, oxycodone, methadone and cyclobenzaprine, to Person #21 and the death of Person #21 resulted from the combined use of these substances.
Health Care Fraud
Defendants Thompson and Frank Corazo were each Medicaid beneficiaries.
According to the indictment, Thompson and Corazo each used Keystone First benefits to pay for medically unnecessary prescriptions for oxycodone pills that they obtained from O’Brien for the purpose of resale to drug dealers.
In addition, Thompson and Corazo falsely represented to Keystone First that the prescriptions were medically necessary.
Money Laundering and Bankruptcy Fraud
Defendants O’Brien and Hibbs were also charged with conspiring to launder the proceeds of O’Brien’s drug distribution operation, and conspiring to commit fraud on the U.S. Bankruptcy Court by hiding income, including income from O’Brien’s drug distribution operation.
On or about Nov. 15, 2010, O’Brien filed for bankruptcy protection for WJO Inc. Defendant Hibbs, who was married to O’Brien when the bankruptcy petition was filed, was, at various times, the Chief Operating Officer and the Chief Executive Officer for WJO Inc.
The indictment charges that on or about July 10, 2012, O’Brien and Hibbs were fired from WJO Inc., by the trustee appointed by the U.S. Bankruptcy Court.
O’Brien and Hibbs legally divorced in October 2012 but continued to reside and work together and continued to act as husband and wife.
The indictment charges that O’Brien and Hibbs diverted assets from WJO Inc. to their personal accounts and to accounts controlled by them.
In addition, it is alleged that O’Brien and Hibbs concealed other assets from the trustee and from creditors of WJO Inc. Both were also charged with knowingly making a false statement under oath during the bankruptcy proceedings.