A Perrysburg physician is the latest of four area residents to be indicted by federal prosecutors for a health care scam involving more than $10 million in prescriptions for pain and wellness creams.
Suzette L. Huenefeld, 53, of St. Andrews Road, was charged June 25 in the Northern Ohio U.S. District Court with one felony count of health care fraud.
The court records state that she did “knowingly and willfully execute and attempt to execute a scheme or artifice to defraud health care benefit programs, that is Medical Mutual of Ohio, CVS Pharmacy Benefits and others... in connection with the delivery of payment for health care benefits, items or services.”
Dr. Huenefeld attended medical school at University of Toledo Medical College of Ohio graduating in 1993 and operates a family medical practice in Perrysburg.
Marketing Health Care Creams
The three other co-conspirators in the case are Kevin A. Clay, formerly of Shelbourne Road, Perrysburg; Matthew Maluchnik of Connor Lake Circle, Perrysburg; and Loni D. Peace of Harold Avenue, Toledo.
According to court documents, Mr. Clay and Mr. Maluchnik in March 2014 founded Theramedical LLC also known as Theramedical Compounding LLC, which was a marketing and sales firm for compounded pain creams, scar screams, topical gels and a “wellness” supplement.
Compounded medication is mixed to create a specific medication for a patient. Only a licensed professional, such as a pharmacist, is authorized to do so.
Because of the specialized process, the price is often much more expensive than mass-produced prescription medications, according to the indictment.
The compounded medications are “neither commercially available nor distributed in mass quantities,” the document states, and are not regulated or approved by the FDA.
According to the federal prosecutor, Mr. Clay and Mr. Maluchnik met with a pharmacy owner in Cleveland who agreed to fill prescriptions, manufacture the creams and gels and bill the individual insurance companies.
The owner would take about 70 percent of the insurance money and provide the rest of the money to Mr. Clay and Mr. Maluchnik.
“The owner knew Clay and Maluchnik planned to pay individual ‘sales representatives’ a commission for prescriptions those individuals received as patients,” the indictment states.
The pharmacy also provided prescription pads for compounding creams intended to be disseminated to patients.
“The type of compounding prescriptions marketed by Theramedical ranged in cost to the insurance company from several hundred dollars to over $10,000 per prescription,” according to the document.
Mr. Maluchnik then approached Dr. Huenefeld, giving her the prescription paper and telling her he needed a pain cream.
She wrote the prescription, which was filled by the Cleveland pharmacy that “within weeks paid Mr. Maluchnik for his own prescription,” the court records state.
Mr. Clay did his own “test run” with a different doctor using the same pharmacy “that was successful.”
Jeep Employees Recruited
The pharmacy owner further informed Mr. Maluchnik that insurance carriers used by Fiat Chrysler Automotive employees covered these type of compounding creams “and FCA employees would be good targets for them,” according to the indictment.
FCA employees have insurance coverage through Medical Mutual of Ohio and Blue Cross Blue Shield.
Ms. Peace, a relative of Mr. Maluchnik who worked for Jeep in Toledo, agreed to recruit other employees to obtain compounding prescriptions.
Mr. Clay and Mr. Maluchnik classified them as “marketers” or “sales representatives” of Theramedical. They gave preformulated prescription forms to other “patients” before a doctor’s visit.
“That form was then submitted to Dr. Huenefeld for approval,” the court records state.
Once the prescription was filled by the pharmacy, “Mr. Clay and Mr. Maluchnik provided a kickback to the patient and the marketer(s) who recruited the patients in the form of an IRS Form 1099 from Theramedical LLC.”
After they established this network, the indictment claims that Dr. Huenefeld’s patients and prescriptions increased substantially.
In 2014, she prescribed at least $7.37 million worth of compounding creams, and in 2015 at least $3.19 million worth, the document states.
Of these, about $3.74 million were for Jeep employees who received payment for their personal prescriptions, the indictment notes.
None of those involved in the operation “informed the insurance companies that patients were paid for their individual prescriptions and that in many instances they were medically unnecessary,” the document states.
Eventually, Medical Mutual of Ohio and Blue Cross Blue Shield refused to the compounding creams.
When this occurred, Mr. Clay and Mr. Maluchnik “used the same co-conspirators including Dr. Huenefeld and Ms. Peace, to get a ‘wellness’ supplement. The payment scheme was the same for this supplement,” the indictment states. “Mr. Clay and Mr. Maluchnik split the profits equally.”
Clay Foundation and Cheer for a Cure Involved
The indictment of Mr. Clay charges him with one count of conspiracy to commit health care fraud, one count of health care fraud and two counts of false statement.
The federal grand jury charged him with claiming he had taxable income in 2014 of $582,408 on IRS forms when he had income “substantially in excess” of that total.
He also was charged for filing an application for recognition of exemption by the IRS for the Clay Foundation when he “well knew the Clay Foundation was a private foundation and did not qualify for public charity status.”
Mr. Maluchnik was charged with one count of health care fraud and two counts of false statement, according to court records.
The federal prosecutor claimed he had taxable income in 2014 of $561,107 on IRS forms when he had income “substantially in excess” of that total.
He also was charged for filing with the IRS a return of organization exempt from income tax, Form 990, in 2014 for the Stella Bertz Cheer for a Cure foundation, claiming it had received contributions and grants of $587,448 when he knew that the total of contributions and grants “was substantially less,” the document states.
Property Forfeitures
The court ordered the forfeiture of Mr. Clay’s home at 29640 Shelbourne Road, a 2014 Range Rover, and jewelry, gold and silver bars, and $29,000 cash from his home.
Also, more than $539,700 from bank accounts in the names of Theramedical Laboratories, the Clay Foundation, Mr. Clay and KCMM Management LLC was ordered to be forfeited.
Mr. Clay is scheduled for a hearing in August in federal district court.
Ms. Peace, who has pleaded guilty, was ordered to forfeit her home at 234 Harold Avenue, Toledo, and $38,964 from bank accounts in her name.
Mr. Maluchnik, who also has pleaded guilty, was ordered to forfeit a 2014 Range Rover titled to Cheer for a Cure; gold and silver bars from a safe deposit box and from his apartment; $63,000 in cash from a safe deposit box; and $42,801 in cash from his apartment.
Also, more than $547,945 was seized from three bank accounts in the name of Stella Bertz Memorial Cheerleading Association DBA Cheer for a Cure, plus $25,355 from a bank account for MMKC Management LLC; $153,535 from an account in his name; $37,353 from accounts for Theramedical.
Dr. Huenefeld is scheduled for a hearing August 4 before Judge Jack Zouhary.
Mr. Maluchnik and Ms. Peace are scheduled for sentencing by Judge Zouhary in November.
