OH: Four Toledo Area Individuals Sentenced for Healthcare Fraud Scheme

Healthcare Facility Rx Drug Diversion – Pharmaceutical Marketing Fraud

Kevin A. Clay, age 40, formerly of Perrysburg, Ohio was sentenced by U.S. District Judge Jack Zouhary to 51 months’ imprisonment after being convicted during a trial of conspiracy, healthcare fraud, and making a false statement on an application for charitable tax-exempt status with the IRS. Judge Zouhary also ordered two years of supervised release, a $300 special assessment, and forfeiture of property related to the offenses.  Restitution will be determined at a later date.

According to court documents and evidence presented at trial, Kevin A. Clay was the co-owner of Theramedical, LLC, a pharmaceutical marketing company specializing in compounded pain and scar cream. The evidence showed that Clay and Theramedical recruited and paid individuals to obtain prescriptions for pain and scar cream, some of which cost as much as $14,000 for a single prescription. The prescriptions were submitted to a Cleveland-area pharmacy, which filled the prescription and billed insurance companies. Members of the scheme concealed the fact that patients were paid to get the prescriptions, and that the prescriptions were often medically unnecessary. In less than two years, Theramedical generated insurance billings of approximately $17 million from the fraudulent scheme. Clay was also convicted of making a false application for tax-exempt status for the Clay Foundation. In his application to the IRS, Clay claimed the foundation was a public charity, however, it was almost entirely funded by fraud proceeds from Theramedical, not the public. Clay conducted little or no fundraising, awarded virtually no scholarships, and purchased gold and silver in his own name with foundation funds.

Three others were also sentenced by Judge Zouhary as part of the scheme.  Matthew Maluchnik, a co-founder of Theramedical, LLC, was sentenced to 25 months’ imprisonment after pleading guilty to healthcare fraud and making false statements on tax returns.  Loni Peace, a relative of Maluchnik, was sentenced to two years’ probation after pleading guilty to health care fraud.  Peace recruited co-workers to obtain prescriptions and received a portion of the proceeds for every patient she recruited.  Suzette Lynn Huenefeld, a medical doctor that operated in Perrysburg, Ohio, was sentenced to two years’ probation after pleading guilty to healthcare fraud.  Huenefeld wrote prescriptions for pain and scar cream for patients referred to her by Theramedical.

This case was investigated by the Federal Bureau of Investigation in Toledo, Ohio, and the Internal Revenue Service–Criminal Investigations in Cleveland, Ohio, the Ohio Attorney General’s Medicaid Fraud Control Unit, and the Ohio State Medical Board. The case was prosecuted by Assistant U.S. Attorney and Gene Crawford.