After a seven-week trial, Dr. John Patrick Couch and Dr. Xiulu Ruan became the first medical professionals in the United States convicted of federal RICO charges originally intended to combat organized crime.
The doctors are the former owners of Physicians Pain Specialists of Alabama (PPSA), a Mobile-based pain clinic that operated in tandem with a pharmacy the doctors co-owned until they were raided by a team of federal agents in May 2015.
Both doctors were accused of running a “pill mill” that pumped out thousands of prescriptions for potent opioid medications like Subsys, Abstral, oxycodone and morphine — a practice that, in some cases, led to record levels of prescriptions of certain medications.
On Thursday, a jury found Ruan and Couch guilty of 19 federal charges ranging from conspiracy to distribute controlled substances, health care fraud, violating anti-kickback statutes and violating the Racketeer Influenced and Corrupt Organizations Act.
Their trial was a rarity among the numerous doctors and pharmacists arrest in the Drug Enforcement Administration’s “Operation Pillution” in 2015, and their conviction will likely result in significant prison sentences, the loss of their medical licenses and the forfeiture of millions in liquid assets, luxury automobiles and high-end real estate.
However, Assistant U.S. Attorney Chris Bodnar said Thursday’s verdict should only concern doctors that put their own financial interests ahead of their patients’ medical treatment.“We’ve made it clear from the onset that this is not by any means a condemnation of doctors in general or even of the prescribing of opioids,” Bodnar said. “There is a gray area, and there should be in medicine because a doctor should be able make a determination of what is and what isn’t in the best interest of their patients.”
Bondar, who led the prosecution along with Assistant U.S. Attorney Deborah Griffin, said that practices at PPSA were instead built around Ruan and Couch’s own greed — something born out during a trial that saw them convicted of receiving illegal kickbacks, submitting falsified health insurance claims and repeatedly subverting the DEA’s regulation of addictive painkillers.
Though Bondar was the only federal official who spoke after the government’s victory on Thursday, he thanked a number of individuals within U.S. Attorney Kenyen Brown’s office, the DEA and the Federal Bureau of Investigation. However, he also thanked the men and women on the jury who he said “remained extremely attentive” through well over 200 hours of testimony.
“This was a very complicated case about complicated issues,” he added. “Throughout the whole thing, though, they were taking notes, they seemed to be in touch with what was going on, and I think that’s what was born out by the verdict today.”
Other than the potential precedent set by its RICO convictions, the case against Ruan and Couch could also have national implications because of the kickbacks the doctors received from Insys Therapeutics as speaking fees for promoting Subsys — a fentanyl-based nasal spray the pharmaceutical company has manufactured since 2013.
Last December, Insys saw six of its top executives, including former CEO Michael Babich, indicted for allegedly offering bribes and kickbacks to pain doctors to boost prescriptions for Subsys.
Doctors the across the country, including Ruan, were referenced in their indictment, and according to Bodnar, the former CEO himself even traveled to Mobile to meet with Ruan and Couch after their pharmacy’s demand for Subsys had outpaced what distributors could provide.
Under new leadership, Insys was hosting an investor’s’ event in New York City as the verdicts for Ruan and Couch were revealed in Mobile. However, Bondar was limited in what he could say about how today’s conviction might affect Insys or the case against its former employees.
“That’s a pending investigation in another district, and I don’t want to speculate on how this will or won’t affect their other investigations,” Bodnar said. “But, as you know, Insys was a large aspect of the case here.”
Ruan and Couch are scheduled to be sentenced in May, and they’re almost certain to receive significant time in federal prison because of the sentencing guidelines associated with some of their convictions — many of which list a range of 10 to 20 years. Bondar said the government would be “looking at the top end … ”
On Thursday, Ruan was immediately taken into custody by U.S. Marshal’s due to the statutory requirements of the doctors’ convictions. Couch was spared the same fate because of a medical condition requiring “daily medication” the court ruled to be an “extenuating circumstance.”
Ruan was taken out of the courthouse through a side door as his attorney, Dennis Knizley, fielded questions from the media. Knizley said he and his client were both “extremely disappointed” with the jury’s decision, but vowed to file a quick appeal.
“We’ll continue to appeal the case and do everything we can to set this right,” Knizley said. “It’ll likely be a year-long process, and it will be a tremendously big undertaking because, in all likelihood, my client will be in jail during that time frame.”
Though he never criticized their verdict directly, Kinzley said it was “very surprising” jurors didn’t ask questions while reviewing of several weeks of testimony. He also pointed out their deliberations only took two days, which he described as “brief.”
After calling a number of witnesses — including multiple medical experts — to testify on his client’s behalf, Knizley said said that Ruan and Couch’s conviction would likely leave doctors across the country “scared to death.”
“I don’t know how any physician would ever think about prescribing an opioid. It’s going to have a tremendous chilling effect on our local community and everywhere,” Knizley said. “Now, when doctors makes a prescription — even though he may some of the finest doctors in the United States testify that he’s totally within the normal course of medical practice — it can result in a conviction where he can go to jail for a long time.”
When asked whether Ruan might assist the government in their ongoing cases involving Insys and its former employees, Knizley seemed to suggest that ship might have sailed.
“I don’t really expect that,” he said. “There was some conversation way back when about those people possibly be prosecuted, and they are being prosecuted in another jurisdiction, but at this point in time, I would not expect my client to be participating as witness or in any other way.”
It’s unclear whether Couch plans to file an appeal, as he nor his attorney, Jack Sharman, made themselves available to the press following Thursday’s verdict.
Pending the filing of Ruan’s appeal, though, the only matter left outstanding from the case is what assets Ruan and Couch will forfeit to the government. Kinzley said a tentative agreement had been reached involving his clients, though he couldn’t disclose the details.
Bodnar said the forfeiture amount would be “in the millions,” a figure comprised of at least some of the banking and investment accounts, physical property and luxury automobiles including Lamborghinis, Ferraris, Porsches, Bentleys and Maseratis the government seized from Ruan and Couch in 2015.
When reporters asked how accounts used by the doctors’ families would be affected by those government seizures, Knizley only commented to say, “the government’s got em’.”
The forfeiture element of these type of “pill mill’ cases has been criticized by doctors caught up in them as well as the attorneys who represent them with many defendants often accusing the government of targeting pain clinics and pharmacies because of those lucrative forfeitures.
During “Operation Pillution” alone, the federal government seized more than $12 million in cash and banking accounts, over $7 million worth of property and 51 vehicles during raids in Arkansas, Louisiana, Mississippi and Alabama.