ATLANTA (AP) — A former Georgia insurance commissioner has been indicted on federal charges related to an alleged health care scheme.
A federal grand jury on Tuesday indicted John Oxendine on charges of conspiracy to commit health care fraud and conspiracy to commit money laundering. He pleaded not guilty during an initial court appearance Friday, according to online court records.
“The indictment alleges that Oxendine conspired to obtain kickbacks for unnecessary genetic and toxicology lab tests, and used his insurance business to hide those kickbacks,” U.S. Attorney Ryan Buchanan said in a news release. “Patients go to their healthcare provider for treatment with the expectation that their treatment or test is necessary, not a scam for fraud.”
Prosecutors say Oxendine conspired with Dr. Jeffrey Gallups and others to submit fraudulent insurance claims for medically unnecessary lab tests to a lab in Texas. The lab company, Oxendine and Gallups entered into an agreement for the company to pay Gallups a kickback of 50% of the profit for specimens submitted by Gallups' practice for testing, the indictment says. The lab company paid the kickbacks through Oxendine, who kept part of the money for himself and also used some of it to pay certain debts for Gallups, the indictment says.
The lab company submitted claims for more than $2.5 million for lab tests ordered by Gallups' practice, and insurance companies paid more than $600,000 to the lab company for those claims, prosecutors said. The lab company then paid $260,000 in kickbacks through Oxendine's insurance business, prosecutors said. Oxendine then paid a $150,000 charitable contribution and $70,000 in attorney fees for Gallups, prosecutors said.
Gallups was charged last year with health care fraud and pleaded guilty in October. He's set to be scheduled next month, according to court records.
Oxendine's defense attorneys, Drew Findling and Marissa Goldberg, said in an emailed statement that Oxendine “has been targeted in this investigation because of his name and gravitas, but to be clear, he has not broken any laws and is innocent of this indictment.”
Oxendine served as state insurance commissioner from 1995 to 2011. He ran for governor in 2010 but lost the Republican primary.
The state ethics commission began investigating and prosecuting campaign finance cases against him in 2009 and settled the last of those cases earlier this month, The Atlanta Journal-Constitution reported.