Oxendine charged in health-care fraud scheme

Former Georgia Insurance Commissioner John Oxendine has been indicted on federal charges of conspiring to commit health-care fraud and money laundering, the Justice Department announced Friday.

According to information presented to a federal grand jury, Oxendine conspired with Dr. Jeffrey Gallups and others to submit fraudulent insurance claims for more than $2.5 million in medically unnecessary tests ordered from a lab in Texas. Gallups already has pleaded guilty to health-care fraud.

As part of the health-care fraud scheme, the lab company agreed to pay Oxendine’s insurance services business a kickback of 50% of the net profits from eligible specimens submitted by Gallups’ practice, which amounted to $260,000.

Oxendine allegedly used a portion of the kickback money to pay debts on behalf of Gallups, paying a $150,000 charitable contribution and $70,000 in attorney’s fees.

“Patients go to their health-care provider for treatment with the expectation that their treatment or test is necessary, not a scam for fraud,” U.S. Attorney Ryan Buchanan said.

“These allegations describe someone

who was more motivated by personal greed than their duty to provide appropriate and necessary care to patients,” added Keri Farley, special agent in charge of the FBI’s Atlanta office. “The FBI, along with our partners, will continue to investigate health-care fraud to ensure these individuals who willingly defraud the American people are brought to justice.”

Oxendine, 60, of Duluth, was elected insurance commissioner in 1994 on the Republican ticket and served four terms.

He ran for governor in 2010 but finished fourth in the Republican primary.

Oxendine was accused of spending campaign contributions on personal items during that gubernatorial bid. The Georgia Government Transparency and Campaign Finance Commission resolved the longest running campaign finance case in the state’s history earlier this month, approving a $128,000 settlement agreement.

This story is available through a news partnership with Capitol Beat News Service, a project of the Georgia Press Educational Foundation.