Paul Roberts Superseding Indictment

Case 2:18-cr-00470-ACA-JHE Document 5 Filed 11/29/18 Page 1 of 38 FILED
2018 Nov-30 AM 09:17

U.S. DISTRICT COURT
N.D. OF ALABAMA
JET/CDM/ADS
GJ#: 36
IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
UNITED STATES OF AMERICA )

)
v. ) Case No.
) 2:18-cr-00470-ACA-TMP
PAUL ROBERTS, M.D., )
STANLEY F. REEVES, & BRETT TAFT )
FIRST SUPERSEDING INDICTMENT
The Grand Jury charges that:
INTRODUCTION
At all times relevant to this First Superseding Indictment:
THE DEFENDANTS & RELATED ENTITIES & INDIVIDUALS
1. Defendant PAUL ROBERTS, M.D., was a Fultondale, Alabama,
physician who was licensed to practice medicine in the State of Alabama. Defendant
ROBERTS was a co-owner of, and physician at, Southeast Urgent Care (“SEUC”)
in Fultondale, Alabama, which was an urgent care center and primary care clinic,
but also operated a program to treat patients with controlled substance addiction and
Attention Deficit Hyperactivity Disorders (“ADHD”). SEUC was also sometimes
referred to as Fultondale Urgent Care LLC. Defendant ROBERTS obtained a Drug
Enforcement Administration (hereinafter “DEA”) Registration Number, which
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Case 2:18-cr-00470-ACA-JHE Document 5 Filed 11/29/18 Page 2 of 38
allowed him to dispense controlled substances. He also obtained a “DATA waiver,”
which authorized him to administer, dispense, and prescribe certain controlled
substances for use in the maintenance and detoxification treatment of patients.
Defendant ROBERTS’ ownership in SEUC was through his single-member
Limited Liability Company, TPR LLC, in Dora, Alabama.
2. Defendant STANLEY F. REEVES was a licensed pharmacist in
Alabama. He owned and operated F&F Drugs, a pharmacy located in Demopolis,
Alabama. In or about April 2012, F&F Drugs began dispensing and billing for
compounded drugs in high volumes. When prescribed and created properly,
compounded drugs are drugs combined, mixed, or altered by licensed pharmacists
or other practitioners to meet the needs of individual patients. The U.S. Food and
Drug Administration (“FDA”) offers the following examples of when drugs would
be compounded: (a) if a patient has an allergy and needs a medication to be made
without a certain dye or preservative; and (b) if an elderly patient or child cannot
swallow a pill and needs a medicine in a liquid form that is not otherwise available.
Because they are custom made to fit the unique needs of each patient, unlike most
prescription and over-the-counter drugs, the FDA does not pre-approve compounded
drugs and therefore does not verify the safety or effectiveness of these drugs prior to
dispensing. In the state of Alabama, the Alabama Board of Pharmacy regulates the
practice of pharmacy, including compounding.
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3. Defendant BRETT TAFT was a sales representative located in and
around Tuscaloosa, Alabama. From in or about April 2012 until in or about February
2014, Defendant REEVES caused F&F Drugs to engage Defendant TAFT to serve
as F&F Drugs’ independent sales representative. In that role, Defendant TAFT
caused prescriptions for compounded drugs to be sent by medical providers,
including Defendant ROBERTS, to F&F Drugs, and F&F Drugs paid Defendant
TAFT for these prescription referrals.
4. INDIVIDUAL #1 was employed by F&F Drugs and assisted with
patient communication and billing of compounded drugs.
PRESCRIPTIONS FOR CONTROLLED SUBSTANCES
A. PRESCRIPTIONS
5. The Controlled Substances Act governs the manufacture, distribution,
and dispensation of controlled substances in the United States. Under the Controlled
Substances Act, there are five schedules of controlled substances, Schedules I, II,
III, IV, and V. Controlled substances are scheduled into these levels based upon
their potential for abuse, among other things.
6. Title 21, United States Code, Section 841(a) (1), provides that,
“[e]xcept as authorized by this subchapter, it shall be unlawful for any person
knowingly or intentionally to manufacture, distribute, or dispense, or possess with
intent to manufacture, distribute or dispense, a controlled substance.”
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7. Title 21, United States Code, Section 802(10), provides that the term
“dispense” means to deliver a controlled substance to an ultimate user or research
subject by, or pursuant to the lawful order of, a practitioner, including the prescribing
and administering of a controlled substance and the packaging, labeling or
compounding necessary to prepare the substance for delivery.
8. Title 21, Code of Federal Regulations, Section 1306.04, governs the
issuance of prescriptions, and provides, among other things, that 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.
Moreover, an order purporting to be a prescription issued not in the usual course of
professional treatment is not a prescription within the meaning and intent of section
309 of the 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 law relating to controlled substances.
B. MEDICATIONS
9. Suboxone is a brand name for a drug used to treat opioid addiction.
Suboxone contains a mixture of buprenorphine and naloxone. Buprenorphine is a
Schedule III controlled substance.
10. Adderall is a brand name for a drug used to treat attention deficit
hyperactivity disorder and narcolepsy. Adderall contains a mixture of
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dextroamphetamine and amphetamine, and is a Schedule II controlled substance.
11. Oxycodone is the generic name for a prescription analgesic (medication
that reduces pain). It is a semi-synthetic opioid, i.e., a drug that is derived from the
opium poppy plant and has high potential for abuse. Oxycodone is classified as a
Schedule II controlled substance, and is sold generically or under a variety of brand
names, including OxyContin and Roxicodone.
12. Hydrocodone-acetaminophen is a pain medication that contains a semi-
synthetic opioid (hydrocodone) and a non-opioid pain reliever (acetaminophen). As
of October 6, 2014, hydrocodone was classified as a Schedule II controlled
substance. Prior to this date, it was classified a Schedule III controlled substance. It
is sold generically or under a variety of brand names, including Lortab, Norco,
Zohydro, and Vicodin.
13. Alprazolam is a benzodiazepine, a class of drugs that are used to treat
a variety of medical issues, including depression, panic disorders, anxiety disorders,
and insomnia, among others. Alprazolam is classified as a Schedule IV controlled
substance, and is sold under the brand name Xanax.
14. Suboxone, Adderall, oxycodone, hydrocodone-acetaminophen,
alprazolam, and other controlled substances are known by law enforcement to be
subject to diversion and misuse.
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C. DATA-WAIVED PHYSICIANS
15. On or about October 17, 2000, Congress passed the Drug Addiction
Treatment Act (“DATA”) which permits qualified physicians to treat a limited
number of drug addicts with narcotic controlled substances that have been approved
by the FDA for that indication. The legislation waived the requirement for obtaining
a separate DEA registration as a Narcotic Treatment Program (NTP) for qualified
physicians administering, dispensing, and prescribing these specific FDA-approved
controlled substances.
16. Physicians who registered with the DEA as practitioners and who
applied and were qualified pursuant to DATA were issued a waiver and were
authorized to conduct maintenance and detoxification treatment using specifically
approved schedule III, IV, or V narcotic medications. DATA waivers are only
granted to qualified physicians. Physicians can initially apply to treat 30 patients
and can later apply to treat as many as 100 patients. In order to receive a DATA
waiver, physicians must attend a training course, which educates them on the
concerns and dangers involved in treating drug addicts.
BILLING FOR MEDICAL SERVICES & PRESCRIPTION DRUGS
17. Providers, including physicians, medical clinics, and pharmacies may
bill health insurance plans for services rendered. For physicians and clinics, these
services may include patient office visits. For pharmacies, these services may
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include the costs associated with dispensing prescription drugs, including
compounded drugs, to patients.
18. Various entities, government and private, offer health insurance plans.
These plans provide health benefits including for office visits and prescription drugs.
Individuals who have health coverage with health insurance plans are often referred
to as beneficiaries.
19. Blue Cross Blue Shield of Alabama (“BCBSAL”) was a private health
insurance company that provided medical and prescription drug insurance coverage
in Alabama and elsewhere. BCBSAL and other health insurance companies that
provide healthcare coverage are “healthcare benefits programs” as that term is
defined in Title 18, United States Code, Section 24(b).
20. When billing for medical services such as office visits provided to an
individual with health insurance, a physician or other medical provider typically bills
the individual’s health insurance plan such as BCBSAL. The provider may do so
directly or by using the services of a billing company. SEUC utilized the services
of DST Health Solutions (“DST”) to bill for the medical services of its providers
such as Defendant ROBERTS.
21. When billing for prescription drugs dispensed, a pharmacy typically
bills a health insurance plan through third-party administrators.
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a. A Pharmacy Benefit Manager (“PBM”) is a third party

administrator of prescription drug programs, including privately
or government insured drug plans, and acts on behalf of one or
more prescription drug plans, such as BCBSAL.
b. A Pharmacy Services Administrative Organization (“PSAO”) is

also a third party administrator. Pharmacies may contract with
PSAOs, which in turn contract with PBMs, such that PSAO
member pharmacies may participate in a PBM network.
c. A pharmacy could participate in a health insurance plan by

joining a PBM’s pharmacy network through an agreement with
a PBM or a PSAO. If a pharmacy joins a PBM network through
an agreement with a PSAO, it agrees to be bound by the terms of
the agreement between the PSAO and the PBM.
22. Prime Therapeutics (“Prime”), Express Scripts Incorporated (“ESI”),
and others are PBMs for various health insurance plans. Prime is a PBM for
BCBSAL and other insurance plans; ESI is a PBM for TRICARE (a Department of
Defense health plan), and other insurance plans. Prime, ESI, and other PBMs are
“health care benefit programs,” as defined in Title 18, United States Code, Section
24(b).
23. American Pharmacy Network Solutions (“APNS”) and others are
PSAOs. APNS is within the network of various PBMs, including that of Prime and
ESI.
24. To become a PBM network pharmacy, including by virtue of joining
the PBM network through a PSAO, a pharmacy agrees to be bound by, and comply
with, all applicable State and Federal laws, including those addressing fraud, waste,
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and abuse. A pharmacy also agrees to be bound by the PBM’s rules and regulations.
These rules include prohibitions against fraudulent conduct, including paying illegal
remuneration to medical providers to prescribe drugs, submitting claims for invalid
prescriptions, and routinely waiving patient co-pays. PBMs require pharmacies to
collect co-pays, typically a fixed amount, from patients, in part so that the patient is
financially motivated to decline medically unnecessary or otherwise fraudulent
prescriptions.
25. When a pharmacy receives a prescription from a beneficiary, the
pharmacy is to collect any applicable co-pay from the beneficiary, dispense the drug
to the beneficiary, and submit a claim for reimbursement to the PBM that represents
the beneficiary’s insured drug plan. The pharmacy periodically receives payment
for submitted claims from the Plan, PBM, or relevant PSAO. If payment is made by
a PBM or PSAO, those entities are ultimately reimbursed, directly or indirectly, by
the insured plan.
COUNT ONE
[21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(C)]
26. Paragraph 1, and paragraphs 5 to 20 of the Introduction of this First
Superseding Indictment are realleged and incorporated as though fully set forth
herein.
27. Beginning not later than October 1, 2013, and continuing to on or about
9
June 6, 2014, more exact dates being unknown to the Grand Jury, in Jefferson
County, within the Northern District of Alabama, and elsewhere, the defendant
PAUL ROBERTS, M.D.,
did knowingly and intentionally conspire and agree with others both known and
unknown to the Grand Jury to knowingly and intentionally distribute and dispense a
mixture and substance containing a detectable amount of dextroamphetamine and
amphetamine (also know by brand name Adderall®), a mixture and substance
containing a detectable amount of buprenorphine and naloxone (also known by
brand name Suboxone®), a mixture and substance containing a detectable amount
of alprazolam (also known by brand name Xanax®), and a mixture and substance
containing a detectable amount of hydrocodone and acetaminophen (also known by
brand names Lortab® and Norco®), each containing a controlled substance, outside
the scope of professional practice and not for a legitimate medical purpose, in
violation of Title 21, United States Code, Sections 841(a)(1) and (b)(1)(C), all in
violation of Title 21, United States Code, Section 846.
COUNTS 2 THROUGH 51
[21 U.S.C. §§ 841(a)(1) and (b)(1)(C)]
herein.
10
29. On or about the dates listed below, within Jefferson County, within the
Northern District of Alabama, the defendant
PAUL ROBERTS, M.D.,
did knowingly and intentionally distribute and dispense a mixture and substance
containing a detectable amount of dextroamphetamine and amphetamine (also
known by brand name Adderall®), a mixture and substance containing a detectable
amount of buprenorphine and naloxone (also known by brand name Suboxone®), a
mixture and substance containing a detectable amount of alprazolam (also known by
brand name Xanax®), and a mixture and substance containing a detectable amount
of hydrocodone and acetaminophen (also known by brand names Lortab® and
Norco®) each a controlled substance, outside the scope of professional practice and
not for a legitimate medical purpose, in violation of Title 21, United States Code,
Sections 841(a)(1) and (b)(1)(C).
Count Date Prescription Issued Patient Substance

DEXTROAMPHETAMINE-
2 10/15/2013 C.B.
AMPHETAMINE
DEXTROAMPHETAMINE-
3 10/15/2013 D.D.
AMPHETAMINE
BUPRENORPHINE-
4 10/15/2013 M.B.
NALOXONE
DEXTROAMPHETAMINE-
5 10/15/2013 S.C.
AMPHETAMINE
DEXTROAMPHETAMINE-
6 10/15/2013 T.H.
AMPHETAMINE
DEXTROAMPHETAMINE-
7 10/16/2013 B.V.
AMPHETAMINE
11
DEXTROAMPHETAMINE-
8 10/16/2013 C.T.
AMPHETAMINE
DEXTROAMPHETAMINE-
9 10/16/2013 C.T.
AMPHETAMINE
BUPRENORPHINE-
10 10/16/2013 C.T.
NALOXONE
DEXTROAMPHETAMINE-
11 10/16/2013 D.M.
AMPHETAMINE
DEXTROAMPHETAMINE-
12 10/16/2013 G.L.
AMPHETAMINE
DEXTROAMPHETAMINE-
13 10/16/2013 Je.C.
AMPHETAMINE
DEXTROAMPHETAMINE-
14 10/16/2013 T.C.
AMPHETAMINE
BUPRENORPHINE-
15 10/16/2013 T.J.
NALOXONE
BUPRENORPHINE-
16 10/16/2013 W.C.
NALOXONE
DEXTROAMPHETAMINE-
17 10/17/2013 B.M.
AMPHETAMINE
BUPRENORPHINE-
18 10/17/2013 Ja.C.
NALOXONE
BUPRENORPHINE-
19 10/18/2013 A.H.
NALOXONE
DEXTROAMPHETAMINE-
20 10/18/2013 B.S.
AMPHETAMINE
BUPRENORPHINE-
21 10/18/2013 B.T.
NALOXONE
DEXTROAMPHETAMINE-
22 10/18/2013 M.K.
AMPHETAMINE
DEXTROAMPHETAMINE-
23 10/18/2013 S.S.
AMPHETAMINE
DEXTROAMPHETAMINE-
24 11/29/2013 A.C.
AMPHETAMINE
DEXTROAMPHETAMINE-
25 11/29/2013 D.C.
AMPHETAMINE
HYDROCODONE-
26 11/29/2013 D.C.
ACETAMINOPHEN
12
DEXTROAMPHETAMINE-
27 11/29/2013 M.C.
AMPHETAMINE
BUPRENORPHINE-
28 11/29/2013 R.L.
NALOXONE
DEXTROAMPHETAMINE-
29 12/3/2013 D.B.
AMPHETAMINE
BUPRENORPHINE-
30 12/3/2013 D.Y.
NALOXONE
DEXTROAMPHETAMINE-
31 12/3/2013 J.D.
AMPHETAMINE
HYDROCODONE-
32 12/3/2013 J.D.
ACETAMINOPHEN
DEXTROAMPHETAMINE-
33 12/4/2013 J.G.
AMPHETAMINE
BUPRENORPHINE-
34 12/4/2013 M.B.
NALOXONE
BUPRENORPHINE-
35 12/5/2013 G.S.
NALOXONE
DEXTROAMPHETAMINE-
36 12/5/2013 J.G.
AMPHETAMINE
BUPRENORPHINE-
37 12/5/2013 M.J.
NALOXONE
BUPRENORPHINE-
38 12/6/2013 D.K.
NALOXONE
BUPRENORPHINE-
39 12/6/2013 J.B.
NALOXONE
DEXTROAMPHETAMINE-
40 12/6/2013 J.B.
AMPHETAMINE
BUPRENORPHINE-
41 12/6/2013 J.S.
NALOXONE
BUPRENORPHINE-
42 12/6/2013 S.L.
NALOXONE
DEXTROAMPHETAMINE-
43 12/6/2013 S.S.
AMPHETAMINE
BUPRENORPHINE-
44 12/4/2013 T.H.
NALOXONE
DEXTROAMPHETAMINE-
45 6/5/2014 C.H.
AMPHETAMINE
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BUPRENORPHINE-
46 6/5/2014 T.J.
NALOXONE
BUPRENORPHINE-
47 6/6/2014 J.C.
NALOXONE
48 6/6/2014 J.C. ALPRAZOLAM
BUPRENORPHINE-
49 6/6/2014 J.J.
NALOXONE
50 6/6/2014 J.J. ALPRAZOLAM
BUPRENORPHINE-
51 6/6/2014 P.S.
NALOXONE
All in violation of Title 21, United States Code, Sections 841(a)(1) and
(b)(1)(C).
COUNTS 52 to 73
[21 U.S.C. §§ 841(a)(1) and (b)(1)(C): dispensing controlled substances without a
legitimate medical purpose]
PAUL ROBERTS, M.D.
herein.
31. One of the individuals to whom Defendant ROBERTS prescribed and
dispensed controlled substances was an individual with the initials C.H. Defendant
ROBERTS prescribed and dispensed oxycodone to C.H. in exchange for sexual
favors performed by C.H. at various locations, including at SEUC, Defendant
ROBERTS’ car, and an apartment to which Defendant ROBERTS had access.
14
C.H. was treated as one of Defendant ROBERTS “VIP” patients, which, among
other things, meant she could walk in through the back door of SEUC and could see
Defendant ROBERTS without checking in at the front desk.
32. On or about the dates listed below, in Jefferson County, within the
Northern District of Alabama, the defendant,
PAUL ROBERTS, M.D.
did knowingly and intentionally distribute and dispense a mixture and substance
containing a detectable amount of oxycodone, a controlled substance, outside the
scope of professional practice and not for a legitimate medical purpose, in violation
of Title 21, United States Code, Sections 841(a)(1) and (b)(1)(C).
Count Date Prescription Issued Patient Substance
52 12/9/2013 C.H. OXYCODONE

15

All in violation of Title 21, United States Code, Sections 841(a)(1) and
(b)(1)(C).
COUNT 74
[18 U.S.C. § 1349: Health Care Fraud Conspiracy – Office Visits]
PAUL ROBERTS, M.D.
herein.
34. From on or about at least October 1, 2013, and continuing until at least
on or about June 6, 2014, the exact dates being unknown, within Jefferson County
in the Northern District of Alabama, and elsewhere, the defendant

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PAUL ROBERTS, M.D.,
and others, known and unknown to the Grand Jury, knowingly and willfully
conspired, combined, and agreed with others known and unknown to the Grand Jury
to execute a scheme and artifice to defraud health care benefit programs affecting
commerce, as defined in Title 18, United States Code, Section 24(b), that is,
BCBSAL and others, and to obtain, by means of materially false and fraudulent
pretenses, representations, and promises, money and property owned by, and under
the custody and control of, said health care benefit programs, in connection with the
delivery and payment for health care benefits, items and services, in violation of
Title 18, United States Code, Section 1347.
Purpose of the Conspiracy
35. It was the purpose of the conspiracy for Defendant ROBERTS and
others to unlawfully enrich Defendant ROBERTS, SEUC, and others, by falsely
and fraudulently billing for patient evaluation and monitoring services that were not
rendered.
Manner and Means
36. The manner and means by which Defendant ROBERTS and others
sought to accomplish the purpose of the conspiracy included, among others, the
following:
37. On or about May 1, 2002, Defendant ROBERTS became a member of
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BCBSAL’s Preferred Medical Doctor (“PMD”) program, and was a member of that
program at all times relevant to this First Superseding Indictment. As a PMD
physician, he agreed to be bound by the PMD Agreement, and agreed that, among
other things, he would bill for services actually rendered, would not allow other
health professionals to bill BCBSAL for services using his provider number, and
would not bill BCBSAL for a date of service other than the actual date the service
was performed.
38. Defendant ROBERTS offered treatment for opioid addiction to
patients through SEUC. Notwithstanding Defendant ROBERTS’ obligations to
treat, evaluate and monitor these patients and notwithstanding his promises to
BCBSAL and other health insurance plans, including that he would bill for services
actually rendered, Defendant ROBERTS was sometimes absent from SEUC when
these patients were seen. On days when he was absent, Defendant ROBERTS and
others would cause patients to be seen by SEUC staff who were not qualified or
authorized to provide services to those patients and would cause SEUC to bill
BCBSAL and other health insurance plans for these purported services as though
Defendant ROBERTS provided these services. These SEUC staff—including an
X-ray technician, an office manager, Licensed Practical Nurses, and Registered
Nurses—would see patients, and among other things issue prescriptions, including
for Suboxone and Adderall on prescription forms pre-signed by Defendant
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ROBERTS or signed by SEUC staff at Defendant ROBERTS’ direction.
39. To cause the submission of billing claims for office visits, Defendant
ROBERTS and others would fabricate and falsify, and direct the fabrication and
falsification of, medical and billing documents. Among other things: (a) SEUC staff
would replace the date of service label on the patient triage sheet (“T-Sheet”) to
reflect a date on which Defendant ROBERTS was present at SEUC instead of the
date the patient was actually seen; and (b) Defendant ROBERTS—who had not
seen the patient—would complete the physical exam and review of systems sections
of the T-Sheet, and falsely attest on the T-Sheet that he had examined the patient.
40. Defendant ROBERTS would cause SEUC to submit these fabricated
and falsified medical and billing documents to DST in order to cause DST to bill
health care benefit programs, including BCBSAL, for the services purportedly
rendered by Defendant ROBERTS.
All in violation of Title 18, United States Code, Section 1349.
COUNTS 75 THROUGH 88
[18 U.S.C. §§ 1347, 2: Health Care Fraud – Office Visits]
PAUL ROBERTS, M.D.
herein.
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42. On or about the dates listed below, within Jefferson County, within the
Northern District of Alabama, and elsewhere, the defendant
PAUL ROBERTS, M.D.,
in connection with the delivery of and payment for health care benefits, items, and
services, did knowingly and willfully execute, and attempt to execute, a scheme and
artifice to defraud a health care benefit program affecting commerce, as defined by
Title 18, United States Code, Section 24(b), that is BCBSAL and others, and to
obtain, by means of materially false and fraudulent pretenses, representations, and
promises, money and property owned by, and under the custody and control of said
health care benefit program.
Purpose of the Scheme and Artifice
43. It was the purpose of the scheme and artifice for Defendant ROBERTS
and others to unlawfully enrich Defendant ROBERTS, SEUC, and others, by falsely
and fraudulently billing for patient evaluation and monitoring services that were not
rendered.
The Scheme and Artifice
44. Paragraphs 36 to 40 of this First Superseding Indictment are realleged
and incorporated by reference as though fully set forth herein as a description of the
scheme and artifice.
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Acts in Execution of the Scheme and Artifice
45. On or about the dates specified as to each count below, in Jefferson
County, within the Northern District of Alabama, and elsewhere, Defendant
ROBERTS, in connection with the delivery of and payment for health care benefits,
items, and services, did knowingly and willfully execute, and attempt to execute, the
above-described scheme and artifice to defraud a health care benefit program
affecting commerce, as defined by Title 18, United States Code, Section 24(b), that
is BCBSAL and others, and to obtain, by means of materially false and fraudulent
pretenses, representations, and promises, money and property owned by, and under
the custody and control of said health care benefit programs:
BCBSAL Date Claim Description of Approximate

Count Beneficiary Submitted to Items Billed Amount Billed to
BCBSAL BCBSAL
75 A.C. 12/17/13 Office/outpatient $95
visit
(99213)
76 R.L. 8/5/14 Office/outpatient $95
visit
(99213)
77 D.L.B 1/22/14 Office/outpatient $95
visit
(99213)
78 J.D. 12/17/13 Office/outpatient $143
visit
(99214)
79 T.H. 1/27/14 Office/outpatient $95
visit
(99213)
80 J.G. 12/23/13 Office/outpatient $95
visit
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BCBSAL Date Claim Description of Approximate

Count Beneficiary Submitted to Items Billed Amount Billed to
BCBSAL BCBSAL
(99213)
81 M.J. 12/23/13 Office/outpatient $95
visit
(99213)
82 D.K. 12/18/13 Office/outpatient $95
visit
(99213)
83 J.S. 12/18/13 Office/outpatient $95
visit
(99213)
84 S.S. 12/17/13 Office/outpatient $95
visit
(99213)
85 S.L. 12/18/13 Office/outpatient $95
visit
(99213)
86 T.J. 6/18/14 Office/outpatient $95
visit
(99213)
87 C.H. 6/23/14 Office/outpatient $95
visit
(99213)
88 C.H. 7/22/14 Office/outpatient $95
visit
(99213)
All in violation of Title 18, United States Code, Sections 1347 and 2.
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COUNT 89
[18 U.S.C. § 1349: Health Care Fraud Conspiracy – Compounded Drugs]
PAUL ROBERTS, M.D.
STANLEY F. REEVES
BRETT TAFT
46. Paragraphs 1 to 4, paragraphs 17 to 19, and paragraphs 21 to 25 of the
Introduction of this First Superseding Indictment are realleged and incorporated as
though fully set forth herein.
THE CONSPIRACY
47. From in or about April 2012, and continuing until in or about February
2014, more exact dates being unknown to the Grand Jury, within Jefferson County
in the Northern District of Alabama, and elsewhere, the defendants
PAUL ROBERTS, M.D.,

STANLEY F. REEVES, and
BRETT TAFT,
knowingly and willfully conspired, combined, and agreed with others known and
unknown to the Grand Jury to execute a scheme and artifice to defraud health care
benefit programs affecting commerce, as defined in Title 18, United States Code,
Section 24(b), that is, Prime, ESI, and others, and to obtain, by means of materially
false and fraudulent pretenses, representations, and promises, money and property
owned by, and under the custody and control of, said health care benefit programs,
in connection with the delivery and payment for health care benefits, items and
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services, in violation of Title 18, United States Code, Section 1347.
Purpose of the Conspiracy
48. It was a purpose of the conspiracy for PAUL ROBERTS, M.D.,
STANLEY F. REEVES, and BRETT TAFT, and others to unlawfully enrich
themselves and others by, among other things using fraudulent means to generate
prescriptions for, bill PBMs for, and receive payment from PBMs for compounded
drugs.
Manner and Means
49. The manner and means by which defendants PAUL ROBERTS, M.D.,
STANLEY F. REEVES, BRETT TAFT, and others sought to accomplish the
purpose of the conspiracy, included, among others, the following:
50. In order to bill patients’ health insurance plans such as BCBSAL,
Defendant REEVES signed contracts to enter into PBM pharmacy networks on
behalf of F&F Drugs, including on or about July 21, 2004, when he signed PSAO
American Pharmacy Network Solutions’ (“APNS’”) contract. In doing so, he
represented that F&F Drugs would abide by APNS’ rules and regulations, including
those of its network PBMs, including ESI and Prime. Those rules included
prohibitions against routinely waiving co-pays.
51. Defendant REEVES caused F&F Drugs to engage Defendant TAFT
to solicit Defendant ROBERTS and other medical providers to prescribe
24
compounded drugs to be filled, and billed to PBMs by F&F Drugs. Defendant
REEVES induced Defendant TAFT to refer prescriptions for compounded
medications to F&F Drugs by paying Defendant TAFT a percentage of the amount
PBMs paid F&F Drugs for each prescription referred by Defendant TAFT, including
for prescriptions paid for by private government health care benefit programs. This
percentage was sometimes as high as 50%. Between in or about April 2012 and in
or about February 2014, Defendant REEVES caused F&F Drugs to pay Defendant
TAFT approximately $4.7 million for the prescriptions that Defendant TAFT
referred to F&F Drugs. Defendant TAFT paid some of that money to sub-sales
representatives, but retained the majority. During this same approximate time-
period, PBMs paid F&F Drugs over $10.5 million for compounded drugs referred
by Defendant TAFT, including those issued by Defendant ROBERTS.
52. Defendant TAFT in turn induced Defendant ROBERTS and other
medical providers to prescribe compounded drugs by directly and indirectly paying
Defendant ROBERTS and other medical providers for issuing prescriptions for
compounded drugs.
53. Defendant ROBERTS routinely issued compounded drug
prescriptions to patients, including medically unnecessary ones, and including drugs
that contained controlled substances such as Ketamine, a Schedule III drug. He
issued these prescriptions to patients visiting the urgent care side of SEUC, patients
25
visiting for Suboxone and Adderall treatment, and to SEUC staff (including to be
used as “samples” at SEUC).
54. Defendants ROBERTS, REEVES, and TAFT caused those
prescriptions to be sent directly from SEUC (in Fultondale, Alabama) to F&F Drugs
(in Demopolis, Alabama).
55. Defendants REEVES, ROBERTS, and TAFT induced patients to
accept medically unnecessary and otherwise fraudulent compounded drugs by
causing F&F Drugs to routinely waive patient co-pays, even though PBMs and other
health care benefit programs such as Prime prohibited the routine waiver of co-pays.
In so doing, Defendants REEVES, ROBERTS, and TAFT effectively caused F&F
Drugs to pay patients to receive each prescription for which F&F Drugs billed their
health insurance plan.
56. Defendants REEVES, ROBERTS, and TAFT caused F&F Drugs to
automatically refill prescriptions for compounded drugs regardless of patient need
so as to maximize the reimbursement F&F Drugs would obtain from PBMs for each
compounded drug prescribed by Defendant ROBERTS.
All in violation of Title 18, United States Code, Section 1349.
26
COUNTS 90 THROUGH 95
[18 U.S.C. §§ 1347, 2: Health Care Fraud Scheme – Compounded Medications]
PAUL ROBERTS, M.D.
STANLEY F. REEVES
BRETT TAFT
58. On or about the dates listed below, in Jefferson County, in the Northern
District of Alabama, and elsewhere, the defendant
PAUL ROBERTS, M.D.,

BRETT TAFT,
services, did knowingly and willfully execute, and attempt to execute, the above-
described scheme and artifice to defraud a health care benefit program affecting
commerce, as defined by Title 18, United States Code, Section 24(b), that is Prime,
ESI, and others, and to obtain, by means of materially false and fraudulent pretenses,
representations, and promises, money and property owned by, and under the custody
and control of, said health care benefit programs.
27
Purpose of the Scheme and Artifice
59. It was a purpose of the scheme and artifice for Defendants PAUL
ROBERTS, M.D., STANLEY F. REEVES, and BRETT TAFT, and others to
unlawfully enrich themselves and others by, among other things using fraudulent
means to generate prescriptions for, bill PBMs for, and receive payment from PBMs
for compounded drugs.
The Scheme and Artifice
60. Paragraphs 49 to 56 of this First Superseding Indictment are realleged
and incorporated by reference as though fully set forth herein as a description of the
scheme and artifice.
Acts in Execution of the Scheme and Artifice
61. On or about the dates specified as to each count below, in Jefferson
County, within the Northern District of Alabama, and elsewhere, the defendants
PAUL ROBERTS,
BRETT TAFT,
services, did knowingly and willfully execute, and attempt to execute, the above-
described scheme and artifice to defraud a health care benefit program affecting
commerce, as defined by Title 18, United States Code, Section 24(b), that is Prime,
ESI, and others, and to obtain, by means of materially false and fraudulent pretenses,
28
representations, and promises, money and property owned by, and under the custody
and control of said health care benefit program:
Approximate Description Approximate Approximate

Count Beneficiary Date of of Items Amount Amount
Service Billed Billed to Paid by
Prime Prime
90 A.R.S. 12/3/13 Pain cream $587.98 $412.95
91 A.R.S. 12/19/13 Pain cream $587.98 $412.95
92 A.R.S. 12/31/13 Pain cream $587.98 $412.95
93 R.M.A. 12/9/13 Pain cream $597.08 $382.08
94 R.M.A. 12/24/13 Pain cream $597.08 $382.08
95 B.S.W. 12/03/13 Pain Cream $597.08 $427.95
All in violation of Title 18, United States Code, Sections 1347 and 2.
COUNT 96
[18 U.S.C. §§ 1001, 2: False Statements]
STANLEY F. REEVES
63. Paragraphs 46 to 56 of Count 89 of this First Superseding Indictment
are realleged and incorporated as though fully set forth herein.
64. Paragraphs 57 to 61 of Counts 90 to 95 of this First Superseding
Indictment are realleged and incorporated as though fully set forth herein.
65. On or about March 22, 2016, within the Northern District of Alabama,
29
and elsewhere, the defendant
STANLEY F. REEVES,
in a matter within the jurisdiction of the executive branch of the Government of the
United States, specifically a matter within the jurisdiction of the Internal Revenue
Service – Criminal Investigations, knowingly and willfully made and caused to be
made, materially false, fictitious, and fraudulent statements or representations, to
wit: the defendant falsely, fictitiously, and fraudulently stated and represented to
federal law enforcement Special Agent J.B. that F&F Drugs informed patients of
their co-pays and did not send refills unless a patient paid his or her co-pay, and did
not automatically refill prescriptions.
All in violation of 18 U.S.C. §§ 1001 and 2.
COUNT 97
[18 U.S.C. §§ 1512(b)(3) and 2: Tampering with a Witness]
STANLEY F. REEVES
30
69. From on or about June 15, 2016 continuing until in or about August
2017, within the Northern District of Alabama, and elsewhere, the defendant
STANLEY F. REEVES,
did knowingly attempt to corruptly persuade and did corruptly persuade
INDIVIDUAL #1 and did engage in misleading conduct toward INDIVIDUAL #1
with the intent to hinder, delay and prevent INDIVIDUAL #1 from communicating
with law enforcement officers information relating to the commission and possible
commission of Federal offenses, to wit: knowing F&F Drugs had received a Grand
Jury subpoena for documents relating to an investigation into healthcare fraud,
Defendant REEVES instructed INDIVIDUAL #1 to, on June 15, 2016, make false
statements to federal law enforcement officers about F&F Drugs’ practices with
respect to collection of co-pays and automatic refill of patients’ prescriptions, in
violation of Title 18, United States Code, Sections 1512(b)(3) and 2.
COUNTS 98 to 103
[18 U.S.C. §§ 1957, 2: Spending Proceeds of Healthcare Fraud]
STANLEY F. REEVES
BRETT TAFT

31
73. Health care fraud proceeds from the compounding drug conspiracy and
scheme, in the form of paid claims by PBMs, were typically deposited into
Sweetwater Bank account number ending in *34 in the name of R&O Inc. d/b/a
F&F Drugs and Diabetes (hereafter, “SWB-F&F”). Defendant REEVES had
signature authority on this account.
74. Defendant REEVES also made payments to Defendant TAFT from
SWB-F&F, the majority of which Defendant TAFT deposited into Regions account
ending in *82, in the name of BTAFT Medical, LLC (hereafter “R-BTAFT”).
75. Defendant REEVES made payments through Pershing, LLC, a
clearing broker, from SWB-F&F to Northwest Mutual Investment Services
Advisory Account ending in *57 in the name of F&F Drugs, Inc.
76. Paragraphs 70 to 75 of this First Superseding Indictment are fully
incorporated as though set forth herein as to Counts 98 to 103 listed below.
77. On or about the date set forth below for each Count, within Jefferson
County in the Northern District of Alabama, and elsewhere, the defendants
32

BRETT TAFT,
aided and abetted by each other and others known and unknown to the United States,
did knowingly engage and attempt to engage in a monetary transaction set forth
below for each Count by, through, and to a financial institution, affecting interstate
and foreign commerce, in criminally derived property of a value greater than
$10,000, knowing that said property had been derived from specified unlawful
activities, which occurred in the Northern District of Alabama and elsewhere, that
is, conspiracy to commit healthcare fraud and healthcare fraud.
Count Date Check Check From Payable to Amount

Deposited #
98 12/10/2013 020513 SWB-F&F Brett Taft $257,774.80
99 1/13/2014 020662 SWB-F&F Brett Taft $381,410.10
78. On or about the date set forth below for each Count, within Jefferson
County in the Northern District of Alabama, and elsewhere, the defendants listed as
to each Count in the below chart, aided and abetted by each other and others known
and unknown to the United States, did knowingly engage and attempt to engage in
a monetary transaction set forth below for each Count by, through, and to a financial
institution, affecting interstate and foreign commerce, in criminally derived property
of a value greater than $10,000, knowing that said property had been derived from
specified unlawful activities, which occurred within the Northern District of
Alabama and elsewhere, that is, conspiracy to commit healthcare fraud and
33
healthcare fraud.
Count Defendant Date of Transaction From Payable Amount

Transaction to
100 STANLEY 12/10/2013 Check deposit SWB- Pershing, $500,000.00

F. REEVES (#20532) F&F LLC
101 BRETT 1/2/2014 Check deposit R- First $104,179.01

TAFT (#1288) BTAFT South
Farm
Credit
102 BRETT 1/27/2014 Check deposit R- First $200,000.00
TAFT (#1300) BTAFT South
Farm
Credit
103 STANLEY 4/30/2014 Money Order SWB- Manley, $1,000,000.00
F. REEVES (#017675) F&F Perry,
Traeger,
and Stapp
All in violation of Title 18, United States Code, Sections 1957, and 2.
34
NOTICE OF FORFEITURE:
[21 U.S.C. § 853]
The allegations contained in Counts 1 through 73 of this First Superseding
Indictment are hereby realleged and incorporated by reference for the purpose of
alleging forfeitures pursuant to 21 U.S.C. § 853.
Pursuant to 21 U.S.C. § 853, upon conviction of violations alleged in
Counts 1 through 73 of this First Superseding Indictment, the defendant,
PAUL ROBERTS, M.D.
shall forfeit to the United States of America, all of his right, title and interest
in:
a. property constituting and derived from any proceeds the
defendant obtained, directly or indirectly, as a result of such
violation(s); and,
b. property used and intended to be used in any manner or part to
commit or to facilitate the commission of such violation(s).
Said property includes but is not limited to a forfeiture judgment.
If any of the property described above as being subject to forfeiture, as a
result of any act or omission of the defendant:
a. cannot be located upon the exercise of due diligence;
b. has been transferred, sold to, or deposited with a third person;
35
c. has been placed beyond the jurisdiction of the Court;
d. has been substantially diminished in value; or,
e. has been commingled with other property which cannot be
subdivided without difficulty;
the United States shall be entitled to forfeiture of substitute property under the
provisions of Title 21, United States Code, Section 853(p), up to the value of
the forfeitable property.
NOTICE OF FORFEITURE
[18 U.S.C. § 982(a)(7)]
79. The allegations contained in Counts 74 through 95 of this First
Superseding Indictment are hereby realleged and incorporated by reference for the
purpose of alleging forfeitures pursuant to Title 18, United States Code, Section
982(a)(7).
80. Pursuant to Title 18, United States Code, Section 982(a)(7), upon
conviction of the offenses charged in Counts 74 through 95 of this First Superseding
Indictment, the defendants
PAUL ROBERTS, M.D.,

BRETT TAFT,
shall forfeit to the United States of America any property, real or personal, that
constitutes or is derived, directly or indirectly, from gross proceeds traceable to the
36
commission of the offenses, including but not limited to a forfeiture judgment.
81. If any of the property described above, as a result of any act or omission
of the defendant:
b. has been transferred or sold to, or deposited with, a third party;
c. has been placed beyond the jurisdiction of the court;
d. has been substantially diminished in value; or
divided without difficulty,
the United States shall be entitled to forfeiture of substitute property under the
provisions of Title 21, United States Code, Section 853(p), up to the value of the
forfeitable property.
NOTICE OF FORFEITURE
[18 U.S.C. § 982(a)(1)]
The allegations contained in Counts 98 to 103 of this First Superseding
Indictment are hereby realleged and incorporated by reference for the purpose of
alleging forfeitures pursuant to Title 18, United States Code, Section 982(a)(1).
2. Pursuant to Title 18, United States Code, Section 982(a)(1), upon
conviction of the offenses charged in Counts 98 through 103 of this First Superseding
Indictment, the defendants
37
STANLEY F. REEVES and

BRETT TAFT,
shall forfeit to the United States of America any property, real or personal, involved
in such offenses, and any property traceable to such property, including but not
limited to a forfeiture judgment.
3. If any of the property described above, as a result of any act or
omission of the defendants:
b. has been transferred or sold to, or deposited with, a third party;
c. has been placed beyond the jurisdiction of the court;
d. has been substantially diminished in value; or
divided without difficulty,
the United States of America shall be entitled to forfeiture of substitute property
pursuant to Title 21, United States Code, Section 853(p).
A TRUE BILL
/s/ Electronic Signature

Foreperson of the Grand Jury JAY E. TOWN
United States Attorney
/s/ Electronic Signature

CHINELO DIKÉ-MINOR
Assistant United States Attorney
38

Paul Roberts Superseding Indictment

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Paul Roberts Superseding Indictment

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Case 2:18-cr-00470-ACA-JHE Document 5 Filed 11/29/18 Page 1 of 38 FILED

2018 Nov-30 AM 09:17

IN THE UNITED STATES DISTRICT COURT

UNITED STATES OF AMERICA )

FIRST SUPERSEDING INDICTMENT

The Grand Jury charges that:

At all times relevant to this First Superseding Indictment:

THE DEFENDANTS & RELATED ENTITIES & INDIVIDUALS

1. Defendant PAUL ROBERTS, M.D., was a Fultondale, Alabama,

Attention Deficit Hyperactivity Disorders (“ADHD”). SEUC was also sometimes

referred to as Fultondale Urgent Care LLC. Defendant ROBERTS obtained a Drug

Enforcement Administration (hereinafter “DEA”) Registration Number, which

allowed him to dispense controlled substances. He also obtained a “DATA waiver,”

which authorized him to administer, dispense, and prescribe certain controlled

substances for use in the maintenance and detoxification treatment of patients.

Defendant ROBERTS’ ownership in SEUC was through his single-member

Limited Liability Company, TPR LLC, in Dora, Alabama.

2. Defendant STANLEY F. REEVES was a licensed pharmacist in

Alabama. He owned and operated F&F Drugs, a pharmacy located in Demopolis,

compounded drugs in high volumes. When prescribed and created properly,

compounded drugs are drugs combined, mixed, or altered by licensed pharmacists

be compounded: (a) if a patient has an allergy and needs a medication to be made

practice of pharmacy, including compounding.

3. Defendant BRETT TAFT was a sales representative located in and

as F&F Drugs’ independent sales representative. In that role, Defendant TAFT

caused prescriptions for compounded drugs to be sent by medical providers,

TAFT for these prescription referrals.

4. INDIVIDUAL #1 was employed by F&F Drugs and assisted with

patient communication and billing of compounded drugs.

PRESCRIPTIONS FOR CONTROLLED SUBSTANCES

their potential for abuse, among other things.

“[e]xcept as authorized by this subchapter, it shall be unlawful for any person

knowingly or intentionally to manufacture, distribute, or dispense, or possess with

intent to manufacture, distribute or dispense, a controlled substance.”

“dispense” means to deliver a controlled substance to an ultimate user or research

and administering of a controlled substance and the packaging, labeling or

compounding necessary to prepare the substance for delivery.

8. Title 21, Code of Federal Regulations, Section 1306.04, governs the

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.

Moreover, an order purporting to be a prescription issued not in the usual course of

Suboxone contains a mixture of buprenorphine and naloxone. Buprenorphine is a

Schedule III controlled substance.

hyperactivity disorder and narcolepsy. Adderall contains a mixture of

dextroamphetamine and amphetamine, and is a Schedule II controlled substance.

11. Oxycodone is the generic name for a prescription analgesic (medication

Schedule II controlled substance, and is sold generically or under a variety of brand

names, including OxyContin and Roxicodone.

12. Hydrocodone-acetaminophen is a pain medication that contains a semi-

synthetic opioid (hydrocodone) and a non-opioid pain reliever (acetaminophen). As

of October 6, 2014, hydrocodone was classified as a Schedule II controlled

is sold generically or under a variety of brand names, including Lortab, Norco,

Zohydro, and Vicodin.

13. Alprazolam is a benzodiazepine, a class of drugs that are used to treat

a variety of medical issues, including depression, panic disorders, anxiety disorders,

and insomnia, among others. Alprazolam is classified as a Schedule IV controlled

substance, and is sold under the brand name Xanax.

14. Suboxone, Adderall, oxycodone, hydrocodone-acetaminophen,

alprazolam, and other controlled substances are known by law enforcement to be

subject to diversion and misuse.

Treatment Act (“DATA”) which permits qualified physicians to treat a limited

a separate DEA registration as a Narcotic Treatment Program (NTP) for qualified

physicians administering, dispensing, and prescribing these specific FDA-approved

authorized to conduct maintenance and detoxification treatment using specifically