Wholesale Distributor of Medical and Dental Supplies to Pay $500,000 to Resolve Controlled Substance Act Violations

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FILE PHOTO: The seal of the United States Department of Justice is seen on the building exterior of the United States Attorney's Office of the Southern District of New York in Manhattan, New York City

CHARLESTON, W.Va. — Henry Schien, Inc., (“HSI”) a wholesale medical distributor based in Long Island, New York, has entered into a settlement agreement with the United States to resolve civil penalty claims arising from its improper distribution of opioids and other controlled substances to medical and dental practitioners in five states in violation of the Controlled Substances Act (CSA).

The settlement provides that between January 1, 2015 and October 9, 2018, HSI distributed approximately 25,400 hydrocodone pills and 3,600 Xanax pills to Scott Edmonds, DDS, a dentist practicing in Huntington, West Virginia, making him one of the top practitioners for hydrocodone purchases in the state.  After the DEA conducted an administrative inspection of Dr. Edmonds’ office, he admitted that he had obtained the substances from HSI to feed his personal addiction.  Dr. Edmonds voluntarily surrendered his DEA registration and entered rehab, and later entered into a civil penalty settlement with the United States for his CSA violations.  Further investigation revealed that HSI had enabled the dentist’s abuse by overlooking numerous red flags indicating abuse and diversion.  Specifically, HSI approved Dr. Edmonds’ repeated requests to increase the quantities of controlled substances he could order, and HSI personnel cleared the dentist to continue abusing the medications after an office inspection in February, 2016 revealed that Dr. Edmonds was not properly accounting for where the drugs were going.

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HSI also distributed opioids to Dr. Elizabeth Korcz, a family medicine physician in Hoover, Alabama.  From February 2015 to February 2017, HSI sold more than 100,000 hydrocodone pills to Dr. Korcz, some of which were diverted. Dr. Korcz and her husband Matthew Korcz were indicted in the U.S. District Court for the Northern District of Alabama and pled guilty to conspiracy to unlawfully dispense controlled substances. HSI was the primary distributor of opioids to Dr. Korcz. 

From 2013 to 2017, HSI sold nearly 55,000 units of hydrocodone to Dr. John Eldridge, a chiropractor and naturopathic physician who practiced in Phoenix, Arizona, despite red flags of abuse and diversion and significant disciplinary history related to his license to practice medicine.  Dr. Eldridge pled guilty to state charges of solicitation to offer to sell or transfer a narcotic drug in August 2021 and surrendered his naturopathic medical license.

From July 2012 to September 2014 HSI supplied more than 24,000 10 mg hydrocodone pills to Dr. Larry Preston, a general family dentist practicing near Bristol, Tennessee.   Dr. Preston was continually among the top three dental practitioners purchasing oral hydrocodone in the Knoxville, Tennessee area from 2006 through 2014.  In 2012, 2013, and 2014 Preston purchased more oral hydrocodone than any other dentist in the Knoxville area. In 2015, federal and state agents learned that Preston had been consuming approximately 15 hydrocodone tablets every day since 2002.  Dr. Preston pled guilty in 2015 to federal charges in the Eastern District of Tennessee.

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From April 2014 to July 2016, HSI supplied nearly 4,000 oxycodone and hydrocodone tablets to Dr. Frank Purpera, a vascular surgeon practicing in Blacksburg, Virginia.  A federal investigation determined that Dr. Purpera had no record of what happened to these pills.  Investigators learned that Dr. Purpera illegally distributed the opioid tablets, providing many of the pills to his wife.  Dr. Purpera was criminally prosecuted by the United States Attorney’s Office for the Western District of Virginia and convicted in January 2020 of illegally distributing controlled substances, health care fraud, conspiracy to commit health care fraud, and obstruction of justice. 

Pursuant to 21 C.F.R. 1301.74(b) distributors of controlled substances have a responsibility to “design and operate a system to disclose to the registrant suspicious orders of controlled substances” including “orders of unusual size, orders deviating substantially from a normal pattern, and orders of unusual frequency.” Distributors must “inform the Field Division Office of the Administration in his area of suspicious orders when discovered by the registrant.” Moreover, registrants are obliged to maintain effective controls against diversion of controlled substances into other than legitimate medical, scientific, and industrial channels. The United States contends that HSI’s failure to comply with its responsibilities under the CSA enabled the diversion and abuse described above.

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“The opioid epidemic has caused unspeakable harm to communities throughout West Virginia and the nation,” said United States Attorney Will Thompson.  “DEA registrants have obligations under the CSA that HSI failed to uphold. Together with DEA, we will utilize every tool at our disposal to hold accountable those that contribute to the diversion of opioids, fuel substance use disorder and cause despair and death among our families.”

“Medical distributors who ignore red flags and put profits over patient care must be held accountable for the harm they inflict on our communities,” said Special Agent in Charge Todd Scott, head of the Drug Enforcement Administration’s Louisville Division, which includes West Virginia, Kentucky and Tennessee.  “Henry Shien, Incorporated played a role in fueling the opioid crisis in several states and today’s announcement provides some measure of justice for those who have suffered as a result of their greed and unlawful actions.”

The case was handled by former Assistant United States Attorney Alan G. McGonigal and Assistant United States Attorney Gregory P. Neil.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. 

 

 

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