U.S. Attorney Michael DiGiacomo has announced that William Stephan, a 65-year-old doctor from Tonawanda, NY, was sentenced to one year of probation and 100 hours of community service. The sentence was handed down by U.S. District Judge Lawrence J. Vilardo following Stephan’s conviction for misprision of felony.
Assistant U.S. Attorney Charles M. Kruly provided details on the case, revealing that Stephan, who runs a family practice in Tonawanda, had signed prescriptions for compounded medications at the request of Erik Berg starting in April 2015. These prescriptions were pre-filled with patient information and refill numbers when presented to Stephan. He typically signed them based on Berg’s assurances that they were medically necessary, without noting the number of refills he was authorizing. Over time, these prescriptions were refilled more than 500 times despite none of the patients being under Stephan’s care.
The compounded medications involved carried high reimbursement rates averaging over $16,000 per prescription, leading to health care benefit programs paying $8,750,315 in reimbursements for these prescriptions and their refills. It was noted that pharmacy benefit managers would not have approved these reimbursements if they had been aware that the prescriptions were pre-filled by Berg and did not cater to specific medical needs but rather aimed at maximizing insurance payouts.
Stephan also signed similar prescriptions for other individuals including Scott Trapp and Michael Luehrsen. An audit conducted by Express Scripts, Inc. in June 2016 revealed discrepancies as Stephan admitted on audit forms to writing certain prescriptions he hadn’t actually authored and acknowledged lacking a doctor-patient relationship with those patients.
Erik Berg and Michael Luehrsen have already been convicted and are awaiting sentencing while Scott Trapp has been previously convicted and sentenced.
This sentencing follows an investigation led by the Federal Bureau of Investigation under Acting Special Agent-in-Charge Mark Grimm.
