Health Care Fraud—Haleyville, Alabama

A 63-year-old man has pleaded guilty to two counts of health care fraud for defrauding Medicare and for misbranding drugs.^[1] According to US Attorney Alice Martin, Gerald Max Burleson “admitted he defrauded Medicare in connection with drugs dispensed to Medicare patients by City Pharmacy of Haleyville, which he operated.”^[2] He also “admitted giving out medications he made from ingredients he acquired on his own instead of medications that had been ordered by the patients’ physicians”^[3] and billing Medicare more than the cost of commercially available doses.^[4] The drug misbranding charges relate to dispensing the self-created medications to a particular patient.^[5]

He was charged in a criminal information in January of this year, but at that time he was charged only with one count of health care fraud and one count of drug misbranding.^[6]

Health care fraud is criminalized by 18 U.S.C. § 1347, which makes it a crime to devise a scheme or artifice to defraud a health care benefit program. Drug misbranding is covered by 21 U.S.C. §§ 331(k), 333(a)(2), and 353(b)(1).

At the same time the information was filed, a plea agreement was filed, done pursuant to Rule 11(c)(1)(B) of the Federal Rules of Criminal Procedure. If the court accepts the plea agreement, which isn’t done until sentencing, the government will recommend that the defendant be given a three-level reduction for acceptance of responsibility and be sentenced at the low end of the guideline range.^[7] The government and Mr. Burleson also agreed that the “for purposes of calculating the advisory guideline range” the Offense Conduct is covered by the Sentencing Guidelines § 2B1.1, that the amount of the loss is $395,000, that the appropriate guideline range—after including the 3-level downward adjustment—is level 15, and the Criminal History is I.^[8] This translates to 18-24 months in prison.

Plea agreements done under Rule 11(c)(1)(B) are merely advisory on the court. In other words, the court is under no obligation to follow the recommendations, and if the court does not, the defendant has “no right to withdraw the plea.”^[9] We previously discussed a court’s obligations under the Rules when we discussed Richard Causey’s plea agreement on December 29.

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[1] US Attorneys Office, Haleyville Pharmacist Pleads Guilty To Health Care Fraud And Drug Misbranding, Mar. 6, 2006.. Note, the Associated Press states that he pleaded guilty to two counts of health care fraud and one count of drug misbranding. See Haleyville Pharmacist Pleads Guilty to Defrauding Medicare, Associated Press (via NBC13.com), Mar. 7, 2006. But this is incorrect. The article also says that he was indicted by a federal grand jury. This also is incorrect.
[2] AP, supra note 1.
[3] Id.
[4] US Attorneys Office, supra note 1.
[5] Id.
[6] US Attorney’s Office, Haleyville Pharmacist Charged In Drug Fraud Scheme, Jan. 3, 2006.
[7] Plea Agreement 1, United States v. Burleson, No. 6:06-cr-00001 (N.D. Ala. 2006).
[8] Id. at 1-2.
[9] Rule 11(c)(3)(B).