Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that JOHN F. GARGAN and LOREN PIQUANT were convicted Wednesday after a two-week jury trial for conspiring together and with others to unlawfully distribute oxycodone from a medical clinic in Queens, New York. DANTE A. CUBANGBANG and MICHAEL KELLERMAN previously pled guilty to narcotics, health care fraud, and money laundering charges in connection with their participation in the oxycodone distribution scheme at that same clinic. From 2012 to 2018, CUBANGBANG, a physician, and GARGAN, a nurse practitioner, prescribed over 6.3 million oxycodone 30-milligram pills to individuals they knew did not need the oxycodone for any legitimate medical reason. The vast majority of these pills were diverted and sold to others on the street.
U.S. Attorney Geoffrey S. Berman said: “These health professionals should have been the first line of defense against opioid abuse, but instead they were drug dealers operating out of a medical clinic. They hid behind their medical licenses and positions within the clinic to sell addictive, dangerous narcotics. This Office will do everything in its power to bring to justice anyone responsible for fueling the opioid epidemic that has taken so many lives.”
According to the evidence presented during the trial and other court documents:
Oxycodone is a highly addictive and dangerous opioid narcotic, which is often diverted and sold to individuals who do not have a legitimate medical need for the drug. The most lucrative pill for street sales is the 30-milligram (“mg”) oxycodone pill, which is fast-acting and powerful. CUBANGBANG and GARGAN were medical professionals who had the authority to prescribe controlled substances, including oxycodone.
CUBANGBANG, GARGAN, KELLERMAN, and PIQUANT worked out of a medical clinic in Queens, known as EPOH Medical P.C. (“EPOH”). Although the defendants tried to make EPOH appear as a legitimate medical clinic, in reality, it was a pill mill that was prescribing medically unnecessary oxycodone 30 mg pills on a massive scale.
EPOH had approximately 600 “patients.” These patients traveled from all five boroughs of New York City, from other counties in New York, and even from other states, to obtain medically unnecessary oxycodone. There were typically large crowds of patients in EPOH’s waiting area, and patients often had to wait hours to be seen for their “office visit.” The visit itself lasted no more than a few minutes and involved no physical examinations or questions about pain. Patients were required to pay $300 in cash for this visit and, in return, they received a prescription for as many as 180 oxycodone 30 mg pills each month. Most of these prescriptions was paid for by Medicare or Medicaid. From just the $300 patient visit fee, EPOH generated approximately $2 million in cash each year.
The vast majority of the patients seen at EPOH had no medical need for the oxycodone 30 mg pills they were prescribed, and those pills were either abused or sold. Testimony at trial established that these purported patients sold their pills for up to $19 per pill to individuals who would then resell them to street-level drug dealers. From 2012 to 2018, CUBANGBANG and GARGAN together prescribed over 6.3 million oxycodone 30 mg pills to individuals they knew did not need the pills for any legitimate medical reason. At approximately $19 per pill, the value of these illegally obtained pills prescribed by CUBANGBANG and GARGAN at EPOH was approximately $120 million. PIQUANT, who worked as a receptionist at EPOH, personally sold hundreds of oxycodone 30 mg pills each month. PIQUANT obtained most of these pills through prescriptions that GARGAN wrote to PIQUANT, to members of PIQUANT’s family, and to PIQUANT’s neighbors. PIQUANT also recruited purported patients for the clinic.
CUBANGBANG, 51, of Queens, and KELLERMAN, 55, of Queens, each pled guilty to one count of narcotics distribution conspiracy, which carries a maximum sentence of 20 years in prison; one count of health care fraud conspiracy, which carries a maximum sentence of 10 years in prison; and one count of money laundering conspiracy, which carries a maximum sentence of 20 years in prison.
GARGAN, 63, of New York, New York, and PIQUANT, 38, of the Bronx, New York, each were convicted at trial of one count of narcotics distribution conspiracy, which carries a maximum sentence of 20 years in prison.
The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Berman praised the outstanding investigative work of the Drug Enforcement Administration’s (“DEA”) New York Tactical Diversion Squad, the U.S. Department of Health and Human Services-Office of the Inspector General, the Internal Revenue Service, and the New York City Police Department (“NYPD”). DEA’s Tactical Diversion Squad (Group TDS-NY) comprises agents and officers from the DEA, the NYPD, the New York State Police, New York State Department of Financial Services, and New York City Department of Investigation.
