|Dr. William J. O'Brien III|
Thursday, May 26, 2016
Trial starts Monday for former Bucks doc accused of multimillion pill mill operation
Posted: Sunday, May 22, 2016
Over the last decade, the career of Dr. William J. O'Brien III has been a series of meteoric highs and seemingly bottomless lows, according to court records.
The former Bucks County doctor of osteopathic medicine operated a successful chain of six family medicine and pain management practices in the Philadelphia region. His homes included a $1.9 million penthouse in Rittenhouse Square and a Jersey Shore house in Beach Haven.
The multi-person hyberbaric oxygen chamber that he invented and patented was used at Lower Bucks Hospital in Bristol Township. In 2009, he organized about 80 local doctors who made a failed attempted to buy the hospital.
Not long after the hospital purchase fell through, O'Brien's contract for hyperbaric medicine services there ended. Shortly after that, his company, WJO Inc., filed for Chapter 11 bankruptcy.
Then, the FBI raided his new hyperbaric practice just days before it was scheduled to open in 2011, seizing boxes of records and his multi-person oxygen chamber. Less than a year later, the court appointed trustee overseeing his bankruptcy proceedings terminated him and his then-wife as WJO employees.
The 50-year-old doctor has been in federal custody without bail for the last 15 months. His Pennsylvania medical license is suspended. In court documents, O'Brien claims he's so broke he can't afford a lawyer to defend him against federal charges that he amassed millions of dollars over three years through fraud, money laundering and drug trafficking.
When his trial starts Monday, O'Brien will act as his own lawyer in U.S. District Court in Philadelphia, according to authorities.
Those federal authorities allege O'Brien ran a multimillion-dollar prescription pill mill that involved members of a violent outlaw motorcycle gang and contributed to the death of a Bucks County man. He faces 114 counts of distribution of controlled substances, specifically the narcotic painkiller oxycodone, methadone and amphetamines, and other offenses, including fraud and unlawfully distributing a controlled substance those distribution resulted in death.
O'Brien is also charged separately with defrauding the federal government and insurers of millions of dollars by fraudulent use of the oxygen chamber. The two cases will be tried together, according to U.S. Court spokeswoman Patty Hartman.
Prosecutors anticipate their case will take four weeks to present, Hartman said. Two lawyers have been assigned to assist O'Brien, if necessary, during the proceedings, Hartman added. One of those lawyers, George Newman, said he didn't have anything to say about the case.
The prosecution anticipates introducing 900 patient files as evidence. Witnesses will include federal agents, including two undercover agents who posed as prescription seekers. Other witnesses will include experts in pain management, former employees, and people who allegedly received prescriptions in exchange for cash or sex.
Authorities allege O'Brien netted nearly $2 million from the pill mill operation and another $4 million in insurance reimbursements for treating patients with the hyperbaric oxygen chamber between 2012 and January 2015.
He lived a lavish lifestyle "well beyond the means of a family practice physician," which he purported to be, according to the government's trial memorandum filed Wednesday.
Federal authorities believe that is because, in March 2012 -- two years after he filed for bankruptcy protection -- O'Brien began using four of his medical practices, including those in Bensalem and Bristol Township, as fronts to sell prescriptions for addictive narcotics. He allegedly developed a scheme with a senior member of the Pagans motorcycle club that involved recruiting "patients" who would typically pay O'Brien $200 cash in exchange for prescriptions for controlled substances.
Once the prescriptions were filled, the “patients” gave the drugs to others, who sold them to drug dealers, according to court documents. The indictment alleges O'Brien prescribed drugs like oxycodone, Percocet and methadone without performing physical exams or other medical care or treatment and that he also falsified medical records.
In December 2013, one of O'Brien's patients, Joseph Ennis, 38, was found dead in his apartment. An autopsy found the man died from the adverse effects of drugs, specifically methadone, oxycodone and Flexeril, a muscle relaxer, which O'Brien prescribed to him at his Bristol Township practice, according to court documents.
With people exchanging cash for drugs, O’Brien could conceal money from creditors and the U.S. Bankruptcy Court, authorities allege.
Between July 2012 and the January 2015 indictment, O'Brien was making $20,000 a week in cash through his illegal prescription operation, according to the trial memorandum.
While bank records showed he made a single $100 cash deposit in his account, then-wife and WJO official Elizabeth Hibbs was making regular cash deposits totaling $366,350 in a total of five accounts at three banks, according to records. She concealed another $114,950 in two safety deposit boxes in Newtown Township and Philadelphia, authorities said. They also allege they found tens of thousands of dollars hidden in O'Brien's houses and cars when they executed search warrants.
Hibbs is among a dozen others who were charged along with O'Brien. She and the others have all pleaded guilty to various offenses, Hartman said. Hibbs pleaded guilty to diverting and concealing assets from the bankruptcy court trustees and knowingly making a false statement under oath during bankruptcy proceedings.
Hibbs was, at times, the chief operating officer and chief executive officer for WJO. She and O’Brien were married when the bankruptcy petition was filed in 2010. They later divorced, though they continued to live and work together, court documents noted.
O’Brien is also charged with diverting assets from WJO Inc. to personal and other accounts that he and Hibbs controlled, concealing assets and lying under oath during bankruptcy proceedings.
In a separate indictment, the federal government has accused O'Brien of conspiring to defraud the U.S. Food and Drug Administration and conspiracy to commit health insurance fraud. Authorities allege O’Brien knowingly made misrepresentations to the FDA to obtain the agency’s clearance for his 10-person hyperbaric chamber, which he marketed under the name Hyperox 101.
A hyperbaric chamber is a medical device that lets patients breathe 100 percent pure oxygen for a prolonged period in a pressurized environment. In recent years, the treatment has seen renewed interest, especially for chronic wound care, one of its FDA-approved uses. The treatment appears to speed the healing process by delivering more oxygen to injured areas.
Under FDA requirements, a hyperbaric chamber that treats patients must be constructed of a certain kind of steel and certified as a pressure vessel for human occupancy. O'Brien's Hyperox model was made from pieces of a used propane tank that were welded together, the indictment alleges. As a result of its “substandard” construction, the device didn't provide patients with therapeutic benefits and put them at potential risk, court records show.
He also is accused of defrauding Medicare and other health benefit programs between March 2007 and August 2011 for submitting $15 million in claims for what authorities called “medically unnecessary and potentially unsafe” treatments.
Jo Ciavaglia: 215-949-4181; email: email@example.com; Twitter: @JoCiavaglia