Former Georgia Insurance Commissioner John Oxendine is headed to trial on health insurance fraud and money laundering charges after a federal judge this week denied all of his efforts to have an indictment dismissed.
“Having now addressed all referred pretrial matters relating to Mr. Oxendine and having not been advised of any impediments to the scheduling of a trial as to him, this case is certified ready for trial,” U.S. Magistrate Judge Regina Cannon wrote in her Aug. 28 order.
Among other objections, Oxendine’s attorneys argued that the May 2022 was time barred because it was brought more than five years after most of the alleged actions took place. A superseding indictment was handed down in May of this year. Oxendine, who was commissioner from 1995 to 2011, before his work with his insurance services firm, also contended that the health fraud charges carry a higher burden of proof that prosecutors did not meet in obtaining the indictment.
The judge disagreed, siding with prosecutors and indicating that the evidence against Oxendine, including allegations of accepting kickbacks, was strong.
Prosecutors have said that 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 charges.
Altogether, the lab company submitted claims for more than $2.5 million for lab tests ordered by Gallups’ practice, and health insurers 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.
Oxendine’s lawyers had said that the indictment failed to allege that Oxendine had any knowledge that the medical claims being submitted were false, and it failed to specifically allege how Oxendine’s presence at a meeting in Dallas led him to knowingly take part in a criminal conspiracy.
Judge Cannon found that the indictment covered all necessary bases.
“Count one reveals that the lab company submitted claims seeking more than $2,500,000 in payments for laboratory tests ordered by Dr. Gallups’s practice,” she wrote. “It also states that in June 2016, the lab company began sending monthly checks to Mr. Oxendine’s insurance services businesses for testing referrals.”
Prosecutors adequately described the conspirators’ role in pressuring physicians to order unneeded tests, including a speech by Oxendine in which he told doctors to do that, the judge noted.
Oxendine also argued that he had been coerced and deprived of due process by federal agents who interviewed him at his home in 2020.
“This Court deems it highly unlikely that a defendant of Mr. Oxendine’s professional pedigree – career politician and licensed attorney – would feel coerced into answering the Agents’ questions as he stood unrestrained on the steps of his own home in public view of passersby,” the judge wrote.
An actual trial date has not been set.
Photo: Oxendine on election night in 2010. (AP Photo/John Amis)
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