Doctor pleads guilty to unlawful drug distribution and identity theft

ALBANY, NEW YORK – Scott McMahon, age 52, of Queensbury, New York, pled guilty today to distributing controlled substances outside the course of professional practice and for no legitimate medical purpose, and to misusing personal information in the course of fraudulently obtaining controlled substances from pharmacies. McMahon also agreed to pay $43,225.24 to settle civil penalty claims arising from his improper prescribing of ketamine and failure to keep proper records of ketamine treatment.

The announcement was made by Acting United States Attorney Antoinette T. Bacon and Special Agent in Charge Ray Donovan, U.S. Drug Enforcement Administration (DEA), New York Division.

In 2019, McMahon had a medical practice in Clifton Park, New York, having previously maintained offices in Albany and other locations in the Capital Region. He specialized in psychiatry and addiction treatment.

In pleading guilty, McMahon admitted that from at least December 2018 through August 2019, he provided certain patients with prescriptions for the Schedule II controlled substance methylphenidate – the generic of Ritalin – with the intent of having them kick back a portion of each prescription to him for his own personal use. As part of the scheme, McMahon obtained the names and birthdates of the children of a patient. McMahon used that information to issue methylphenidate prescriptions in the children’s names, and fraudulently induced pharmacies in New York and Vermont to dispense controlled substances under the pretense that the medication was for the children. The patient picked up these prescriptions in his children’s names, and split the methylphenidate with McMahon.

In the civil case, McMahon admitted that he improperly prescribed ketamine intranasal spray to an individual who had no legitimate medical need for it. A sampling of McMahon’s records showed that he failed to record the amount of ketamine injected for each patient on each treatment date, the name of each patient who was injected, and the person who injected the ketamine. McMahon also failed to conduct an initial inventory when he began dispensing ketamine. The civil penalty is based, in part, on McMahon’s inability to pay a higher amount.

McMahon is in custody. Sentencing is scheduled for January 13, 2021 before Senior United States District Judge Thomas J. McAvoy. On the aggravated identity theft conviction, McMahon must serve 2 years in prison. On the drug conviction, he faces up to an additional 20 years in prison, and will also be ordered to serve at least 3 years of post-imprisonment supervised release. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.

McMahon’s plea agreement requires that he surrender his New York State medical license, and forfeit $6,774.76 seized by the Government as part of the criminal case.

The criminal case was investigated the DEA Albany District Office’s Tactical Diversion Squad and its Capital District Drug Enforcement Task Force, and is being prosecuted by Assistant U.S. Attorney Michael Barnett.

The DEA Tactical Diversion Squad also investigated the civil case, in which Assistant U.S. Attorney Christopher R. Moran represented the United States.

Also assisting in the investigations were the New York State Police, the New York State Bureau of Narcotic Enforcement, and the DEA Resident Office in Burlington, Vermont.

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