Landmark healthcare whistleblower case

LANDMARK HEALTHCARE WHISTLEBLOWER CASE

FILED BY COUMANIS & YORK

SETTLED FOR $24.5 MILLION

BY U.S. DEPT. OF JUSTICE

MOBILE, Ala. – Coumanis & York, P.C., announces that two medical clinics affiliated with Mobile, Ala.-based Infirmary Health System Inc., and a physicians group, Diagnostic Physicians Group P.C., have agreed to pay the United States $24.5 million to resolve a lawsuit filed by the firm under the False Claims Act.

The settlement is the largest healthcare fraud case settlement in the history of the Southern District of Alabama and is one of, if not the largest, healthcare fraud settlements ever involving courts in the State of Alabama. Additionally, it resolved one of the largest healthcare fraud cases pending in the United States as of August, 2014. Attorneys Christ N. Coumanis and David P. York represented the relator (the qui tam plaintiff) who initially filed the lawsuit and who received $4.41 million as his share of the settlement by the United States.

The quit tam settlement ends a whistleblower lawsuit originally filed under the whistleblower provisions of the False Claims Act in July 2011, by Coumanis & York P.C. client Dr. Christian Heesch, a physician formerly employed by Diagnostic Physicians Group. The provisions of the False Claims Act authorize private parties to sue on behalf of the United States and to receive a portion of any recovery. The act permits the United States to intervene or “take over” the lawsuit, as it did in this case with respect to Dr. Heesch’s lawsuit. Nationally, the United States intensely scrutinizes these whistleblower cases and intervenes in fewer than 20% of the cases.

“I would like to thank and congratulate our courageous and conscientious client for bringing justice on behalf of the United States government,” said Coumanis. “Without concerned citizens like our client, who literally put his professional reputation on the line, these types of actions that ferret out fraud being committed against our healthcare system and U.S. taxpayers could not be successfully pursued. The United States and all taxpayers owe him an enormous amount of gratitude and respect for his willingness to step forward and pursue this action to a successful conclusion.” 

York added, “I, too, commend whistleblowers like our client who helped bring this particular case to light and diligently assisted in pursuit of this action. Financial arrangements that compensate physicians for referrals encourage physicians to make decisions based on financial gain rather than patients’ needs and therefore have the potential to compromise the medical care and treatment rendered to their patients.  Those physicians, physician groups and other medical entities that are operating illegally through these referral arrangements involving taxpayer dollars from federal healthcare programs should be held accountable. With the tireless efforts of our client, the Justice Department attorneys from D.C., and the tireless efforts of the United States Attorney’s Office of the Southern District of Alabama, we have held the Infirmary Health System-affiliated entities accountable through the successful pursuit of this action.”

According to the United States’s Complaint in Intervention, in 1988, Infirmary Medical Clinic (“IMC”) purchased IMC-Diagnostic and Medical Clinic (“IMC-DMC”) from Diagnostic Physicians Group and agreed to pay Diagnostic Physicians Group a share of the revenues the clinics collected, including Medicare revenues from diagnostic imaging and laboratory tests. After IMC acquired the IMC-Northside Clinic in 2008, the physicians practicing there joined Diagnostic Physicians Group and entered into an agreement with the same key terms as the earlier agreement with IMC-DMC. The United States contended that these payments were illegal kickbacks and constituted a prohibited financial relationship under the Stark Law, and that in June 2010, an attorney for Diagnostic Physicians Group warned employees of both IMC and Diagnostic Physicians Group that the compensation being paid to the physicians likely violated the law. Nevertheless, the agreements allegedly were neither modified nor terminated for another 18 months.

The United States’ Complaint alleged that two Infirmary Health System affiliated clinics — IMC-DMC, in Mobile, and IMC-Northside Clinic, in Saraland, Ala. — had agreements with Diagnostic Physicians Group to pay the group a percentage of Medicare payments for tests and procedures referred by its physicians, in violation of the Physician Self-Referral Law (commonly known as the Stark Law) and the Anti-Kickback Statute. Also named in the lawsuit was Infirmary Medical Clinics P.C. (“IMC”), an affiliate of Infirmary Health System that directly owns and operates approximately 30 clinics in the Mobile area, including the two clinics involved in this lawsuit.

The Anti-Kickback Statute and the Stark Law are intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives. The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare. The Stark Law forbids a hospital or clinic from billing Medicare for certain services referred by physicians who have a financial relationship with the entity.

As part of the settlement, the settling defendants have also agreed to enter into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General (“HHS-OIG”), which obligates the defendants to undertake substantial internal compliance reforms and to submit its federal health care program claims to independent review for the next five years.

The investigation and litigation were conducted by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Southern District of Alabama, HHS-OIG and the FBI. 

“We commend the diligent efforts of the Justice Department attorneys out of Washington, D.C., and the Assistant United States Attorneys of the Southern District who diligently investigated and worked to an outstanding conclusion the claims initially brought by our client, a process that successfully concluded an action that consumed more than three years of our client’s life. We are thankful for the United States’ efforts in settling this matter,” Coumanis said. “The claims settled by this agreement are allegations only, and there has been no determination of liability,” he said.

The case is captioned U.S. ex rel. Heesch v. Diagnostic Physicians Group, P.C. et al., Civil Action No. 11-0364-KD-B (S.D. Ala.).

About the Attorneys

CHRIST “Chris” N. COUMANIS is a founding member of the law firm of Coumanis & York, P.C, which maintains a general litigation practice in south Alabama. Mr. Coumanis founded the firm with David P. York, former U.S. Attorney of the Southern District of Alabama. Upon completing Tulane Law School, Mr. Coumanis served five years as an Assistant District Attorney in Mobile County where he tried over 75 jury trials ranging from violent crimes to complex white collar crimes. In 1994, Mr. Coumanis entered private practice with a respected statewide general litigation firm in Mobile and became a member of that firm in 2000 where he practiced until forming Coumanis & York, P.C. Mr. Coumanis first worked with Mr. York as Assistant District Attorney in Mobile County and has known him as a colleague and an adversary for nearly 15 years.

DAVID P. YORK has been practicing law in courts in Alabama and Georgia since 1990. He is a former U.S. Attorney for the Southern District of Alabama, was a state prosecutor in both Georgia and Alabama, and a civil litigator in Alabama. Mr. York is a 1989 graduate of Samford University’s Cumberland School of Law and a 1985 graduate of Birmingham-Southern College. Mr. York is licensed to practice in all courts in Alabama and Georgia.

Coumanis and York, P.C. has offices in Mobile, Daphne, and Montgomery, Alabama. 

Stark Threat on Medicaid

Pending case will test whether states can be held liable for providers’ violations

By Joe Carlson  | August 10, 2013

From Modern Healthcare

threat on medicaidFor 20 years, the CMS has not applied the federal ban on physician conflicts of interest known as the Stark law to Medicaid claims. It’s focused on Medicare only.

But private whistle-blowers have begun pressing for clarity on the issue because a 1993 law applying Stark to Medicaid remains on the books and could potentially put millions of dollars in their pockets. Now, the CMS says the law does apply, and the U.S. Justice Department is moving ahead by citing the previously unenforced law in a Florida lawsuit seeking repayment of Medicaid claims for Stark violations.

A spokeswoman confirmed last week in an e-mail to Modern Healthcare that the CMS does consider the Stark law applicable to Medicaid claims, even though it has never published final rules on how it would work.

If the Justice Department’s legal strategy holds, children’s hospitals may be the most affected because they treat so many Medicaid patients. But any hospital that cares for Medicaid patients could be affected. That may explain why organizations such as the Federation of American Hospitals deny that Stark applies to Medicaid.

Yet some legal experts say it is state governments—not the hospitals or doctors accused of wrongdoing—that may have to foot the bill if providers’ Medicaid claims violate the Stark law, because of the odd way that the original 1993 Stark law was written. That could create a sensitive situation at a time when the Obama administration is relying on states to expand their Medicaid programs under the healthcare reform law.

“The law doesn’t authorize (the federal government) to deny payment to the hospital. … The state is the one that loses the money,” said healthcare attorney Kevin McAnaney, who helped write the Stark rules as an HHS regulations lawyer. “That’s why it’s never been finalized.” The feds have “no stomach” for holding states responsible for providers’ financial misdeeds, he said.

In 1993, Congress expanded the scope of the Stark law from its original focus on stopping doctors from referring Medicare patients for laboratory services at facilities they own. It included doctors’ referrals for hospital services, among other things, and expanded Stark to cover Medicaid.

But Medicaid is run and partly funded by state governments. Rather than denying payments to Medicaid providers who violate the Stark law, the 1993 law directed the CMS to withhold from the state Medicaid program the federal matching portion of any claim that violates Stark.

At least that’s how the CMS officials read the law when they published proposed rules in the Federal Register in January 1998. Those rules were never finalized or implemented, and several experts said they were not aware of any case nationally in which a Medicaid provider has been successfully prosecuted for violating Stark.

“They came up with an idea and then never did anything with it,” said healthcare attorney Donna Clark of Baker Hostetler.

In the meantime, whistle-blower lawsuits in healthcare have taken off. In 2012, the Justice Department reported an all-time high of $3 billion taken back from pharmaceutical companies and healthcare providers via whistle-blowers’ lawsuits that later were joined by the Justice Department.

The insiders filing those cases stood to gain as much as 30% of each settlement, giving them a strong incentive to file as broad a lawsuit as possible for violations of the Stark law. Several healthcare legal experts said that pressure has caused the Justice Department to toss the CMS’ old reading of the law and try to squeeze healthcare providers for Medicaid repayments.

A massive Stark and False Claims Act lawsuit pending against Halifax Health and its medical staffing subsidiary in Daytona Beach, Fla., is the prime case. Federal prosecutors and a private whistle-blower say the system submitted more than 70,000 false claims, including some for Medicaid patients, reportedly creating potential penalties of as much as $1 billion because the system allegedly paid oncologists and neurologists based on the volume of business referred to the hospital.

The Medicaid allegations argued that the hospital, not the state Medicaid program, is liable for the damages because the providers induced the state to submit illegal claims.

Halifax lawyers disputed the broad allegations and said specifically that Medicaid claims were “a legal impossibility.” But U.S. District Judge Gregory Presnell in March 2012 refused to dismiss the Medicaid claims from the lawsuit. A March 2014 trial is scheduled.

“The impact is huge,” said Robert Fabrikant, a partner with Manatt, Phelps & Phillips. “There is a very substantial area of exposure that just didn’t exist before.” He noted that large Medicaid providers now may have a harder time convincing potential buyers in a hospital transaction that they don’t have potential legal exposure under Stark.

While it remains to be seen whether the Medicaid allegations in Halifax will withstand future court decisions, whistle-blowers aren’t waiting. Last month, the Justice Department announced it was joining a $500 million False Claims Act lawsuit against Infirmary Health System and a group of doctors and diagnostic clinics in Mobile, Ala. They are accused of using a profit-sharing arrangement to encourage unnecessary testing of patients, but the hospital denies the allegations, which originally covered Medicaid claims.

The whistle-blower dropped the Medicaid allegations, however, after the Justice Department declined to include it when it filed to intervene in the case last week. The whistle-blower’s attorney, Christ Coumanis of Coumanis & York in Daphne, Ala., said he knew the Medicaid claims would be a hard sell.

“Frankly, we weren’t sure if it would be something that would be enforceable under the False Claims Act,” he said.

Cooperation lands drug courier in Texas-to-Mobile cocaine network big break

MOBILE, Alabama – A Texas resident who participated in a major cocaine smuggling operation got a big break today, winning a five-year prison sentence in a case that originally called for a minimum term of at least 20 years.

Victor Lupo-Angulo pleaded guilty in January to conspiracy to possess with intent to distribute cocaine. He agreed he was accountable for 120 kilograms, or 265 pounds, of the drug.

Lupo-Angulo was one of several people accused of working for a drug enterprise that investigators contended was headed by a woman named Claudia Perez-Leal from her Houston-area home.

Senior U.S. District Judge Charles Butler Jr. sentenced Perez-Leal in July to 18 years in prison. She had admitted that she smuggled cocaine across the border of Mexico and shipped it to Alabama and other places from late 2008 until summer 2010.

According to court records, Lupo-Angula identified Perez-Leal and her husband, Luis Daniel Perez-Leal, as his suppliers. Prosecutors asked that Lupo-Angula’s sentence be reduced by 50 percent from the minimum under advisory guidelines.

“What I argued is that due to his high degree of cooperation, he should get more than 50 percent,” defense attorney Christ Coumanis said.

Coumanis also noted that his client has a clear criminal record under federal guidelines and no history of violence.

“Mr. Lupo-Angulo didn’t have a gun, didn’t assault anyone, didn’t hurt anyone,” Coumanis said. “And the most important factor, he cooperated.”

Arkansas State Police discovered during an arrest of Lupo-Angulo in September of last year that the defendant had an arrest warrant on a federal indictment. At the time, he had a kilogram of cocaine, $102,000 in cash and three cell phones.

An informant had told Homeland Security Investigations agents that a truck driver named “Mi Grande” made regular trips to Mobile to drop off drugs and pick up money, court records show.

Investigators determined that Lupo-Angulo was “Mi Grande” by examining motel records from May 2010.

Lupo-Angulo told agents that he had made two trips to Mobile, delivering a total of nine kilograms of cocaine, according to the plea agreement.

Coumanis said his client, a native of Colombia, is a legal U.S. resident by virtue of his marriage to an American. But he said Lupo-Angulo may be deported after his prison sentence.

“He was struggling financially and ended up meeting the Perezes and got involved in this through the Perezes,” he said.

By Brendan Kirby | bkirby@al.com 

Feds indict 8 on allegations involving fraudulent billing for hemophilia medication

MOBILE, Ala. — A federal grand jury has indicted the owners of a pair of specialty pharmacies on charges that they paid kickbacks to the owner of an Alabama company accused of placing fraudulent orders for expensive hemophilia medication.

The 23-count indictment names 8 defendants and seeks a court order requiring them to forfeit some $29 million in illicit earnings.

“Individuals exhibiting sheer greed through extensive fraudulent billing and awarding improper inducements for Medicaid business, such as the allegations in today’s indictment, are driving up health care costs and are depriving those who really need medical assistance as provided by these government-funded programs,” U.S. Attorney Kenyen Brown said in a prepared statement.

4 separate schemes alleged

Handed down last month and unsealed this week, the indictment lays out 4 separate but related schemes to defraud Alabama Medicaid and Blue Cross and Blue Shield of Alabama.

Lori Skowronski Brill, whose son suffers from hemophilia, founded a hemophilia care company in 2007 that provided free services to blood-clotting disorder patients. The company, Hemophilia Management Specialties Inc., helped patients order their extremely expensive protein replacement medicine called Factor medication froma pair specialty pharmacies: Hemophilia Infusion Managers in Loxley and MedfusionRx in Birmingham.

The indictment alleges that the company, which originally was in Theodore and then moved to Evergreen in 2009, received kickbacks from the pharmacies in exchange for referring customers. The indictment lists six separate kickbacks from the pharmacies totaling $143,486.

Brill, who now works for a Moss Point company that offers intravenous drug therapy, said she is innocent. “I did not do that, and I told them over and over again that I did not do that,” she said.

The indictment names Hemophilia Infusion Managers owners Tony Eric Mosley and James Anthony Goins, as well as Medfusion owners Chris and Jeff Vernon. Jeff Vernon was not available for comment this afternoon, and an employee at the pharmacy said Chris Vernon no longer works there.

Owner learns of indictment from reporter

Mosley said today that he was surprised to learn from a reporter that he had been indicted. He acknowledged paying a commission to Brill but said that she was on his payroll at the time. He said he followed advice from attorneys who said that it was legal to pay commissions as long as the recipient was an employee.

Mosley said he questioned some prescriptions that Brill brought to him, added that he reported his concerns to Blue Cross and Blue Shield.

He said he fired Brill in 2009 after learning that she had stockpiled large amounts of Factor.

“We’ve cooperated with the FBI every time they asked us about Lori Brill,” said Mosley, who added that the indictment likely will finish off a business that has been crippled since Blue Cross and Blue Shield stopped covering patients who use his pharmacy.

Mosley said Factor medication for a typical hemophiliac costs between $250,000 and $500,000 a year.

Mosley said he contacted Brill’s doctor on 2 occasions when he questioned the dose of the medication that she was ordering. One time, he added, the doctor reduced the dosage.

Feds say Brill pressured patients

Brill stands accused of conspiring with Butch Brill, her employee and ex-husband, and 2 others who worked for Hemophilia Management Specialties. Those employees, Ashley Sprinkle and Sherry Demouey, pleaded guilty to health care fraud charges in January. They admitted to falsifying Factor logs to indicate that Hemophilia Management Specialties customers took more Factor medication than they actually did, without verifying the actual usage.

The pharmacies then used the falsified logs to order more Factor medication and then billed Blue Cross Blue Shield of Alabama and Alabama Medicaid, according to plea agreements.

The new indictment accuses Lori Brill of pressuring some Hemophilia Management Specialties customers to re-order unneeded medication and switch to a more expensive brand. The indictment alleges that she forced Sprinkle, who suffers from a blood-clotting disease called Von Willebrand’s disease, to take the medication against her doctor’s instructions during a time when she was trying to get pregnant.

Another patient, Rayford Travis Goodwin, stands accused of enrolling in Alabama Medicaid, even though he lived in Florida and was ineligible to receive benefits from Alabama’s program. Lori Brill, according to the indictment, instructed Goodwin to list her home address on Medicaid documents.

Mosley strongly denied allegations that his pharmacy filled a prescription for Goodwin.

The indictment also accuses Leroy Waters, the patient manager for Medfusion, of receiving $45,155 in illegal kickbacks from the company. The indictment also renewsbankruptcy fraud charges filed against Waters in February. Authorities accuse him of intentionally understating his 2007 Medfusion earnings by $265,885.

He pleaded not guilty this week to the new charges. “The new charges don’t really alter his innocence in this case,” defense attorney Christ Coumanis said.

By Brendan Kirby | bkirby@al.com 

Federal Court Digest: Steroids defendant wants charges dismissed

Lawyers for an alternative medicine practitioner asked a judge last week to dismiss the charges against him and throw out evidence gathered from wiretaps.Jesse S. Haggard of Arizona was among a dozen people indicted in Mobile on charges that they conspired to sell anabolic steroids across the country to healthy people who had no legitimate medical reason to take the drugs.

Haggard was not tried with other defendants in a five-week trial earlier this year in Mobile because he fled to Costa Rica and only recently returned to the United States to face the allegations.

Defense lawyer Christ Coumanis argued in his motion that his client was a licensed naturopath who was permitted to prescribe medicine. Applied Pharmacy Services, a compounding pharmacy in Mobile, filled steroid prescriptions from Haggard and other licensed doctors.

“Despite the best efforts of Dr. Haggard, he could not have known nor learned what the government alleges in this case was in fact unlawful,” the motion reads. “This lack of notice denies fundamental due process.”

Prosecutors have not replied. But U.S. District Judge Ginny Granade rejected similar arguments made by the other defendants who stood trial in January.

Bank robber gets almost 4 years

A federal judge in Mobile last week sentenced confessed bank robber Johnathan David Fisher to the maximum sentence under advisory guidelines — two months shy of four years.

The prison term was nine months longer than the low-end sentence recommended under Fisher’s plea agreement.

U.S. District Judge Kristi DuBose noted that the 27-year-old Mobile man’s record includes a previous robbery, a federal mail-theft conviction and a pair of probation violations.

It was 2½ months after Fisher got out of prison that he walked into the Regions Bank at 825 S. Schillinger Road on Aug. 27 and used a stickup note to steal $3,140.

“I’m not sure what it’s going to take,” DuBose said Friday. “Am I going to keep seeing you over and over and over again? Why is it going to be different this time?”

Fisher, sporting an orange jumpsuit and a spider tattoo on his neck, said he robbed the bank to pay a crack cocaine debt.

He said he failed to complete a drug-treatment program during his last prison stint because he was placed in the isolation wing.

“I’d like an opportunity to do it again and try to right my wrongs,” he said.

Prichard man may get break

A Prichard drug dealer serving time on a gun offense may get time knocked off his sentence for testifying against a would-be customer whom he chased down with a gun.

A federal judge sentenced Aaron James to 10 years in prison for use of a firearm in a drug trafficking crime after he admitted that he grabbed his partner’s gun and chased after Ryan Wheeler in October 2006.

The other drug dealer, Reco Renard Dickerson, got into a scuffle that led to the shooting death of Wheeler’s friend, Nicholas Arthur Cole.

The violence arose from a dispute over a cocaine purchase at a car wash on Halls Mill Road.

James testified at the sentencing hearing of Wheeler, who was given a year in prison for his role in the drug deal.

“It was believed that the defendant’s testimony would aid the court in the determination of Ryan Wheeler’s role, activity and level of participation in the criminal offense,” Assistant U.S. Attorney Vicki Davis wrote in her request to the judge.

James has already finished a 10-month sentence for the drug charge.

By Brendan Kirby | bkirby@al.com 

10 men go to trial on steroid conspiracy charges this week in Mobile


MOBILE, Ala. –After more than three years of investigation into an online pharmacy based in Mobile, the trial of 10 men charged in a steroids conspiracy is set to begin this week.Chief U.S. District Judge Ginny Granade last week wrapped up last-minute logistical issues and handed prosecutors a victory with her decision to allow them to introduce evidence about a Colorado businessman’s alleged history with steroids.

Brett Branch, who ran a health company that authorities contend illegally sold steroids, is one of 12 people named in the 198-count indictment.

One defendant has already pleaded guilty and another will be tried later this year.

Branch and business owners stand accused of recruiting doctors to write bogus prescriptions for anabolic steroids, which Applied Pharmacy Services filled. Authorities contend that the pharmacy, where Branch once worked as a salesman, filled thousands of prescriptions outside legal parameters.

Branch’s attorney, Dennis Knizley, sought to bar testimony by Branch’s ex-wife that the defendant:

Used testosterone in high school in the 1980s.

Gave money to people to buy steroids from Mexico between 1994 and 1997.

Injected his two minor children with human growth hormone.

Knizley argued that testimony from Tracy Branch would be irrelevant and unfairly prejudice the jury.

Granade said she would instruct prosecutors not to raise those allegations in the opening statement. She said she would withhold a final ruling on the testimony after she hears the specific questions that prosecutors ask. But, she said, the testimony appears to be relevant.

Lead prosecutor Donna Dobbins said Tracy Branch’s testimony is important to establish a pattern regarding Brett Branch’s involvement with steroids, including his public advocacy of the muscle-building drug and his claims to be an expert.

“He uses it, himself. He used it early on. He illegally obtained it through Mexico. He suffered side effects from the abuse of the drugs, himself,” Dobbins said. “This isn’t something new for him. … This is who he is.”

Dobbins said prosecutors intend to introduce evidence from invoices and other documents, substances seized from Brett Branch’s home and wiretaps.

Dobbins said that secretly recorded conversations show J. Michael Bennett, Applied Pharmacy’s supervising pharmacist, admitting his conduct and part-owner Jason Kelley coordinating it.

Also, Granade refused to prohibit testimony from a pair of expert witnesses for the prosecution — Paul Doering, a professor at the University of Florida’s College of Pharmacy; and Dr. Gary Wadler, who has a sports medicine and internal medicine practice in Manhasset, N.Y., and serves as a professor of clinical medicine at the New York University School of Medicine.

Defense lawyers argued that a report made by Wadler improperly drew legal conclusions about the guilt of the pharmacists. Granade said Wadler can testify but cannot offer legal conclusions.

Defense attorneys also argued that Doering is not qualified to testify about a variety of matters, including the doctor-patient relationship, whether the steroids were prescribed for a legitimate medical purpose and whether they were safe.

Granade said she would wait until Doering testifies to rule on objections to specific questions as they are made.

Trial of defendant postponed

MOBILE, Ala. — A federal judge in Mobile last week postponed the trial of one of 12 people named in an indictment alleging a massive steroids conspiracy.

The judge also refused to remove the defendant’s attorneys from the case.

Jesse S. Haggard, an alternative medicine practitioner, stands accused of drug distribution and money laundering. Authorities contend that he sent order forms to Applied Pharmacy Services in Mobile for steroids and other drugs.

Haggard will be tried separately from the other defendants because he only recently returned to the country from Costa Rica, and his lawyers said they need more time to prepare.

The U.S. Attorney’s Office had sought the removal of those attorneys, David York and Christ Coumanis.

Government lawyers argued that York, when he was U.S. attorney in Mobile, supervised the task force that investigated the case. Prosecutors also contended that Coumanis had a conflict of interest because his former law partner represented a doctor who pleaded guilty in a related case.

Prosecutors said they had evidence of York’s involvement in the case but told U.S. Magistrate Judge Sonja Bivins that they did not want to share that evidence because they did not want to divulge details of the inner workings of the office.

As a result, Bivins ruled, prosecutors could not prove that York was “personally and substantially” involved in the steroids probe.

“Aside from these assertions in its brief, the government has not produced an iota of evidence in support of its assertions,” wrote Bivins, who also determined that Coumanis had no involvement in the case handled by his former law partner.

By Brendan Kirby | bkirby@al.com 

Steroids defendant pleads not guilty; prosecutors seek removal of defense lawyers

MOBILE, Ala. — An alternative medicine practitioner pleaded not guilty last week to charges that he illegally sold anabolic steroids, while prosecutors sought to have his lawyers removed from the case.

It was Jesse S. Haggard’s first appearance in Mobile since returning to the United States earlier this year. He was one of a dozen people named in a 198-count indictment last year as part of a long-running probe by the U.S. Attorney’s office into the practices of Applied Pharmacy Services in Mobile.

Former U.S. Attorney David York has been accused of conflict of interest in steroids case.Haggard faces trial in January. 

The U.S. Attorney’s Office cried foul last week over Haggard’s choice of attorneys — David York, who formerly served as U.S. attorney in Mobile. 

Assistant U.S. Attorney Charles Baer filed a motion seeking to remove York and another lawyer, Christ Coumanis. 

Baer wrote that York has a conflict of interest since he was involved in the investigation that led to the prosecution and personally approved the task force that conducted the probe. 

Coumanis, meanwhile, was a member of the law firm that represented a doctor who pleaded guilty to illegally prescribing steroids filled by the online pharmacy in Mobile. Baer wrote that prosecutors plan to call the doctor, Pamela Pyle, as a witness.

Coumanis declined to comment on the matter, and York could not be reached last week. Baer wrote that York told him he has no memory of his involvement in the investigation.

Baer stated that he accepts that York is acting in good faith.

“However, Mr. York’s good faith and lack of memory are irrelevant to the issue of whether he can continue the representation,” he wrote.

Haggard will remain jailed after Chief U.S. District Judge Ginny Granade affirmed the order of a federal magistrate judge in Orlando, where the defendant made his initial appearance. Haggard had been living in Costa Rica.

Coumanis had asked Granade overturn that decision. 

Assistant U.S. Attorney Donna Dobbins responded in writing that Haggard continued to advocate steroids on his blog and in a radio interview, and that he admitted fleeing the U.S. to avoid prosecution. “To release Haggard from custody now would be an invitation to disappear — never to be seen again,” she wrote. 

Coumanis said declined to detail his defense but said he is eager to “get to the heart of the matter and prove his innocence.”

Article By Brendan Kirby | bkirby@al.com