Fraud Related to Controlled Substances in New York
New York Penal Law § 178.26 – Misdemeanor
New York Penal Law § 178.26 outlines the crime and punishments for fraud and deceit related to controlled substances in New York. According to New York Penal Law § 178.26, fraud and deceit related to controlled substances is a misdemeanor.
What puts a person or entity at risk of prosecution?
You are at risk of prosecution for fraud and deceit related to controlled substances if:
- You obtain or attempt to obtain a controlled substance or a prescription for a controlled substance by means of fraud, concealment of facts, false statements, and/or forgery;
- You are found in possession of a false or forged prescription for controlled substances, or a blank prescription pad that you are not authorized to use; or,
- After being prescribed a controlled substance by one medical professional, you knowingly seek a prescription for the same substance from another medical professional while intentionally withholding information about the first prescription.
The Legal Definition of Fraud and Deceit Related to Controlled Substances
The “elements” of fraud and deceit related to controlled substances are the things that the prosecutor must prove in order for you to be found guilty of this offense. The crime itself essentially has three different parts, as outlined above, each of which has its own elements. If the elements of any of these parts are proven, you can be convicted of the crime.
Element #1: You obtained or attempted to obtain a controlled substance or a prescription for a controlled substance by way of any forgery, misrepresentation of fact or withholding information, and/or false statement.
- This element applies when you try to obtain a controlled substance (or a prescription for a controlled substance) in any way that knowingly misrepresents the truth. That includes falsifying or forging prescription information in any way, and/or giving false information (by omission or outright) in order to get the prescription or substance itself.
- Example: Dustin and his friend Darryl looked very similar. Darryl had a prescription for Vicodin, and Dustin did not. Darryl took Dustin’s ID and prescription and brought them to the pharmacy, claiming to be Dustin. The pharmacist believed him and filled the prescription. Later on, Dustin found out and called the police. They checked the security footage and saw Darryl filling the prescription while claiming to be Dustin. Darryl was then charged with fraud and deceit related to controlled substances.
- This standard applies to any attempt to get a controlled substance prescription or a controlled substance, whether or not that attempt is successful.
- Example: Let’s return to the case of Darryl. Say the pharmacist was suspicious and declined to fill the prescription. In that case, he could still be charged because of the attempt to fraudulently obtain the Vicodin, even if he didn’t get the drugs in the end.
Element #2: You were in possession of a false/forged prescription, or a blank prescription pad that you were not authorized to use.
- The definition of Element #2 is possessing a false/forged prescription and/or a blank prescription pad.
- Simply possessing a false or forged prescription, or a blank prescription pad qualifies as fraud and deceit related to controlled substances. The prosecution must prove that you were in possession of the prescription or pad, but if they do, it is assumed that you intended to use it.
- Example: During a routine traffic stop, an officer asked to search for Kathy’s car, and she consented. The officer found a blank prescription pad during his search. Kathy claimed that she had found the prescription pad, and was not intending to use it. However, she was still able to be charged for fraud and deceit related to controlled substances, because the possession itself was illegal, regardless of why she claimed she had it.
Element #3: You knowingly obtained an additional prescription by deceiving or withholding information about prescriptions from other medical professionals.
- The definition of Element #3 is knowingly obtaining additional prescriptions by lying (either by omission or outright) about prescriptions you have already obtained from other medical professionals.
- This element is commonly known as “doctor shopping.” In order to convict you of this crime, the prosecution must prove that having already been prescribed a controlled substance by one medical professional, you went to a second medical professional and knowingly misrepresented the fact that you had already obtained the first prescription.
- Example: Cynthia received a prescription for one month’s worth of hydrocodone from her doctor. The next day, she went to a second doctor. He asked her if she had been prescribed any medications, and she said she had not. At the end of the visit, he wrote her a prescription for hydrocodone. Cynthia was, therefore, liable to be charged with fraud and deceit related to controlled substances.
Charges of fraud and deceit related to controlled substances may be brought in addition to, or in place of, charges for certain other related offenses, including:
Related Offense #1: Criminal Diversion of Prescription Medications and Prescriptions
- The definition of criminal diversion of prescription medications and prescriptions is either knowingly delivering a prescription medication or device to a person who does not have a medical need for it or knowingly receiving a prescription medication or device with knowledge that issuer was not authorized to do so.
- Example: Nathan worked in a hospital. Henry asked Nathan to give him opioids from the hospital, which Nathan did. Henry was caught with the opioids and said that Nathan had given them to him. Both Nathan and Henry were then liable for criminal diversion of prescription medications.
Related Offense #2: Forgery in the Second Degree
- The definition of forgery in the second degree is knowingly making or alter something with the intent to deceive or harm another person.
- In this context, forgery applies to alter prescriptions. Forging specifically a prescription makes the forgery a second-degree crime, which elevates it from a misdemeanor to a felony.
- Example: Chad worked in an office where he used a company computer. The computers were monitored, and Chad’s boss witnessed him using the computer to forge prescriptions. He called the police, and with the computer evidence as well as security footage, it was proven that Chad had been the one forging the prescriptions.
- Note: In order for you to be charged with forgery, the prosecution must prove that you yourself forged the prescription. In cases where this cannot be proven, charges of the offense below (criminal possession of a forged instrument) will usually be brought instead.
Related Offense #3: Criminal Possession of a Forged Instrument.
- The definition of criminal possession of a forged instrument is possessing an object that has been forged, with the knowledge that it is a forgery.
- This offense basically means that you were in knowing possession of a forged instrument, whether or not it can be proven that you forged the instrument yourself.
- Example: Wendy was found to be in possession of a prescription that had clearly been altered in order to increase the dosage of the medication it called for. She said that she knew the prescription was altered but did not alter the prescription herself. However, all that the prosecution had to prove on this count was that the prescription had, in fact, been altered (no matter by whom) and that Wendy was in possession of it.
Related Offense #4: Criminal Possession of a Controlled Substance.
- The definition of criminal possession of a controlled substance is possessing any illicit drug or controlled substance without the necessary authority.
- This means simply being in possession of any controlled substance without the proper authority. In this context, it would apply if you actually obtained controlled substances through fraud, and would be a separate count from the fraud itself.
- Example: Michael used a fraudulent prescription to obtain Oxycodone. He was caught leaving the pharmacy with the Oxycodone in his pocket. At that point, he was liable for both fraud and deceit related to controlled substances, and criminal possession of a controlled substance, since he was actually in possession of the unauthorized, controlled drugs.
What are some of the essential and impactful cases?
Perhaps the most important legal motion about fraud and deceit related to controlled substances was the passage of Article 33: New York Controlled Substances Act, Statute 3397, on June 17th, 2014. This specific Statute made fraud and deceit related to controlled substances its own separate and delineated offense.
What agencies detect, investigate, and prosecute this crime?
A number of agencies are involved in investigating and prosecuting controlled substances fraud. They include, but are not limited to, NY State and local Police Departments, District Attorneys’ Offices, the Attorney General’s Office, the D.E.A., the New York State Department of Health, the Bureau of Narcotic Enforcement, the New York State Office of Alcoholism and Substance Abuse Services, and the New York State Office of the Medicaid Inspector General.
There are also a large number of national, state-wide, and local task forces set up to specifically detect, investigate, combat, and prosecute prescription drug fraud.
Penalties for Violating Statute S 178.26:
Fraud and deceit related to controlled substances is a class A misdemeanor. The potential
penalties for this crime, in most cases, include:
- a fine of $5,000; and/or
- Imprisonment for up to one year.
The penalties you face may be steeper under a number of different circumstances.
Specifically, you face heightened penalties if you:
- Are deemed accountable for additional fines and damages;
- Are convicted of additional crimes;
- Have been convicted of this crime before;
- Have been convicted of a violent felony within the past ten years;
- Are involved in a fraud charge that deals with over $1,000.00 in value
What are some of the additional consequences of being convicted?
If convicted of fraud and deceit related to controlled substances, the penalties can be numerous and severe. In addition to potential jail time, probation, and fines, you may be required to attend inpatient and/or outpatient drug rehab.
You also may lose your job (especially if that job is in the medical or pharmaceutical field), and even the ability to practice in your field in the future. In addition, because of the recent focus on controlled substance abuse, your case may be featured extensively in the news media, and you may be subject to a significant degree of social stigma.
Legal Defenses to Controlled Substance Fraud
If you find yourself facing charges of fraud and deceit related to controlled substances, there are a number of powerful legal arguments that can be used in your defense.
They include, but are not limited to:
Defense #1: You did not knowingly deceive or defraud.
- One defense for this charge is that you did not knowingly attempt to mislead, defraud, or misrepresent the truth in order to obtain controlled substances.
- Example: Eleanor visited a new doctor for the first time. She asked for a prescription for the controlled pain medication that she had occasionally been taking, as needed, for years. When the doctor asked if she had been prescribed the medication within the month, Eleanor said no, that it was two months ago.
In fact, it was filled two weeks before, but she had sincerely forgotten that the prescription had been filled. Because she had no history of doctor shopping, her defense attorney argued that this was not an intentional attempt to defraud, and rather was just a memory error.
Defense #2: You were not involved in or responsible for the fraudulent act.
- The second defense for controlled substance fraud is that you did not knowingly participate in the fraudulent act, and were not responsible for the same.
- Example: Martin was a doctor. During an appointment, his patient, Paula, stole his prescription pad. She was later found with the pad and said that Martin had given it to her. Martin’s attorney argued that he was not responsible, because Paula had stolen the pad without his knowledge.
Defense #3: You did not knowingly possess the fraudulent item.
The third defense for controlled substance fraud is that you did not intentionally possess a fraudulent item, like a forged prescription.
- Example: Darla lived with her daughter, Nadine. Nadine had left a prescription on Darla’s kitchen table. The prescription had Nadine’s name on it and was not obviously forged.
On a tip that there was prescription forgery going on in the home, the police obtained a search warrant and found the prescription, which was ultimately found to be forged. Darla argued that she had no idea the prescription had been forged and would have had no way of knowing.
Why get a lawyer?
The State of New York takes crimes related to controlled substances incredibly seriously and will devote time, energy, money, and resources to prosecuting those crimes. It is essential to have an advocate and representative on your side throughout the process of investigation, negotiation, and trial.
An experienced attorney will represent your best interests and navigate the intricacies of controlled substance fraud prosecution. Attempting to navigate it yourself will leave you vulnerable to mistakes, pitfalls, and potentially life-altering errors.
Call us for help
For questions about controlled substance fraud, or to discuss your case confidentially with one of our experienced criminal defense attorneys, do not hesitate to contact us. We have local criminal law offices in your area.
1. Former North Tonawanda Pharmacist Sentenced for Prescription Fraud
April 17th, 2019
Patrick R. McQuade, of North Tonawanda, NY, was convicted of obtaining controlled substances through fraud. Between January 2015 and December 2017, McQuade was employed as a New York State Licensed pharmacist by the Rite Aid Corporation.
An internal investigation discovered that he had been creating fake patient accounts to register fraudulent prescriptions, which he used to obtain controlled substances for personal use.
In total, he dispensed a total of 1,874 dosage units of Alprazolam, Phentermine, Cialis, and Synjardy. McQuade was sentenced to two years’ probation and was ordered to pay $7,792.78 to the Rite Aid Corporation. He is also prohibited from employment as a pharmacist as a condition of his probation.
2. Pain Doctor Sentenced for Using Patient Names Fraudulently to Obtain Controlled Substances
May 13th, 2019
US Attorneys Office, Western District of NY, Press Release
Dr. Paul Biddle of Amherst, NY was convicted of multiple charges in May of 2019. Biddle was an anesthesiologist and pain management doctor who also operated a medical marijuana practice.
He was convicted of knowingly prescribing controlled substances to two of his deceased patients, in order to fraudulently obtain the controlled substances for himself. The prescriptions were written between 2015 and 2017. Biddle was convicted of identity theft and possession of unlawful hydromorphone HCL and was sentenced to two years’ probation.
3.Former Medical Practice Office Manager Charged With Stealing Controlled Substances
April 18th, 2019
D.E.A. Press Release
Kristy Brucz, of Buffalo New York, was charged with obtaining controlled substances by fraud. According to the indictment, Brucz was an office manager for a physician between 2015 and March of 2018. During that time, she allegedly obtained control of the physician’s NY State-issued controlled substance electronic token and its password.
She used the token to issue 166 fraudulent controlled substance prescriptions, totaling 11,885 dosage units of medications including alprazolam, hydrocodone, oxycodone, and phentermine. She was also charged with utilizing 25 different pharmacies to receive prescriptions, as well as payment methods, including insurance, cash, Medicaid, and Medicare.
She was discovered in March of 2018 when she attempted to fill a prescription at a Rite Aid. The pharmacist questioned the legitimacy of the prescription and contacted the physician for whom Brucz worked, at which point he informed her that the prescription was false. If convicted, she faces a maximum penalty of four years in prison and a fine of $250,000.
4.Former Medical Practice Employee Charged With Stealing Controlled Substances
April 15, 2019
DEA Press Release
Shannon Lambert, of Canandaigua, NY, was charged with obtaining controlled substances by fraud. According to the charges, between January 2018 and February of 2019, Lambert worked at Cornerstone Eye Associates in Rochester, NY.
During that time, she obtained access to the electronic prescription program the office’s doctors used to write prescriptions for patients and submit them to pharmacies. She allegedly used the program to issue 73 prescriptions for Schedule II and III controlled substances, including Vicodin, hydrocodone, and oxycodone, to herself and other Cornerstone patients.
If convicted, she faces a maximum penalty of four years in prison and a fine of $250,000.
- NYPD Officer and His Wife Indicted for Using the Officer’s Deceased Mother’s Identity to Defraud Social Security and Benefit Funds
September 18th, 2018
Brooklyn D.A. Press Release
Edward Ian St. Hill, a 16-year veteran of the NYPD, and his wife, Maria Ramos, were arraigned on a 101-count indictment for allegedly using the identity of St. Hill’s deceased mother to defraud social security and benefit funds and to obtain controlled substances fraudulently.
According to the charges, the defendants maintained the finances and legal status of Germain St. Hill, Edward St. Hill’s mother, as if she were still alive, despite the fact that she died in 2016. They also impersonated her in various phone conversations in order to obtain finances and controlled substances.
Since Germain St. Hill’s death, they continued to collect and cash her social security and pension benefit checks, which totaled more than $38,000 and $50,000 respectively. Additionally, they continued to refill Germain St. Hill’s prescription for Percocet on 14 separate occasions after her death. The defendants were charged with the following:
- third-degree criminal possession of a controlled substance,
- second-degree grand larceny,
- first-degree identity theft, second-degree forgery,
- third-degree money laundering, first-degree scheme to defraud,
- fifth-degree conspiracy,
- falsely reporting an incident, and;
- fraudulently obtaining controlled substances, among other charges.
- They face up to 25 years in prison if convicted of the top count.
- Former Local Doctor, Nurse, and Three Others Charged with Illegally Distributing Controlled Substances
December 21, 2018
D.A. of the Western District of NY Press Release
Dr. James Keefe, a NY State licensed physician who previously practiced at the Erie County Medical Center, was charged with writing false prescriptions for himself and for four other medical professionals (Phousavath Luangrath, Takeya Rainey, Laura Ricotta, and Benjamin Rivera.)
In total, Dr. Keefe allegedly issued 178 fraudulent prescriptions, totaling 9,718 dosage units, for controlled substances such as Adderall, oxycodone, hydrocodone, amphetamine, and buprenorphine. The charge carries a maximum penalty of 20 years in prison and a $1,000,000 fine.
- Rochester Psychiatrist Sentenced for Illegally Distributing Controlled Substances
Dr. Clifford Jacobson of Rochester, NY was convicted of illegally distributing a controlled substance. Dr. Jacobson, who was a practicing psychiatrist, sold prescriptions for Schedule IV controlled substances to patients with no medical necessity between 2014 and 2017.
He was caught through an investigation by Special Agents of the D.E.A., under the direction of Special Agent-in-Charge James J. Hunt of the New York Field Division. Jacobson sold clonazepam to undercover agents who were posing as drug-seeking patients.
He was sentenced to one-year probation including four months of home confinement and was ordered to surrender his medical license and to pay $75,000 in fines.