Nine Plead Guilty in $1.3 Billion Opioid Distribution Scheme Uncovered by Texas AG’s Medicaid Fraud Unit
A multi-agency investigation spearheaded by Attorney General Ken Paxton’s Medicaid Fraud Control Unit has led to the federal prosecution of nine individuals tied to the unlawful distribution of nearly 70 million opioid pills and over 30 million doses of other abused prescription drugs. Valued at over $1.3 billion on the black market, the drugs were funneled to pill-mill pharmacies in the Houston area, fueling the national opioid epidemic.
The defendants, including five pharmaceutical distributor executives and four sales representatives and brokers, orchestrated the sale of potent opioids such as oxycodone, hydrocodone, and hydromorphone. They also provided prescription drug potentiators like alprazolam, carisoprodol, and promethazine to heighten the opioids’ effects. Sham compliance protocols were reportedly used to avoid detection by the DEA and regulatory bodies.
Nine of the ten individuals charged have entered guilty pleas and await sentencing. Investigators revealed that the illicit operation significantly exacerbated the opioid crisis, which has devastated communities nationwide.
The investigation, which included efforts by Sergeant Mike Price, Captain Stacey Overbay, and Investigative Auditor Kalpana Patel of the Medicaid Fraud Control Unit, was conducted in collaboration with federal agencies including the DEA, HHS-OIG, FBI, USPS-OIG, and FDA-OCI. Assistant Attorney General Abdul Farukhi played a key role in the case’s prosecution.
“This landmark case demonstrates our tenacity and resolve in the fight against prescription drug rings that have worsened the deadly opioid crisis facing our country,” said Attorney General Paxton. “My office will continue to pursue those who exploit our health care system for profit and destroy Texas families with dangerous, addictive drugs.”
The Medicaid Fraud Control Unit, which receives the majority of its funding from the U.S. Department of Health and Human Services, has recovered more than $612 million in settlements, judgments, and restitution for Texas taxpayers since 2021. For every dollar of state funding, the unit has recovered over 49 dollars for taxpayers in the past three years.
