MONTGOMERY, Ala. (WSFA) - Attorneys wrap up week 2 of the federal pill mill case involving Montgomery Doctor Richard Stehl.
Stehl is charged with 103 counts including drug distribution, money laundering, drug possession, and health care fraud.
The majority of testimony in the second week of the trial focused on health care fraud and money laundering counts in the indictment.
The government alleges Stehl carried out a health care fraud scheme for his financial benefit by writing patients prescriptions for controlled substances that were medically unnecessary and requiring those patients to return for monthly office visits for new prescriptions. During this trial, some patients testified they became hooked on the controlled substances while under his care. Others said they were battling addiction and depended on Stehl to fuel their pill problem. Some of those patients were also given monthly injections for steroids, antibiotics, and vitamin deficiencies. The government’s medical expert testified the majority of those injections were medically unnecessary.
Stehl billed the insurance company Blue Cross Blue Shield and Medicare for these visits using a code for a 25-minute office visit that required a moderately complex medical issue and a detailed exam. This code yielded a higher medical reimbursement than a regular office visit. The government called a number of witnesses, including a former employee and patients, to convey what did and did not happen during these monthly visits. A former employee testified that Stehl saw anywhere between 60 to 70 patients a day, spent less than 10 minutes with patients, and often didn’t wear a stethoscope.
In order to prove Stehl laundered money, the jury must first determine he committed health care fraud. That determination would deem the medical reimbursements from the office visits as criminal proceeds. Earlier in the week a DEA agent testified about the five money laundering counts against the defendant. He told the jury a stream of dirty money was running through Stehl’s practice as a result of those medical reimbursements. The agent said Stehl laundered those medical reimbursements through an unrelated LLC - to a personal investment account and used it to buy a house. When asked why he believed Stehl took this action, he responded, “To disguise the true ownership of those funds.”
The agent used flow charts and financial records for each count to show the medical reimbursements were deposited into a Wells Fargo account for HealthCare on Demand, Stehl’s medical practice. Those reimbursements were co-mingled with other funds in the Wells Fargo account. The agent said when “dirty money” is co-mingled with “clean money,” all funds become “dirty.”
In 2010, Stehl created a business, SLE Enterprises, LLC and opened an account for this business at Trustmark National Bank. Stehl used this business to purchase property on Taylor Road for his practice. In 2012 he transferred the ownership of SLE Enterprises, LLC to his mother, Betty Stehl. From 2015 to 2018, Stehl wrote an annual rent check from the Wells Fargo account for his medical practice to SLE Enterprises, LLC - and deposited the check into the LLC’s account at Trustmark National Bank. Ultimately, Stehl moved the money from Trustmark National Bank into his personal investment account at Charles Schwab and used other funds to purchase a house in east Montgomery. The defense argued the practice was perfectly legal, calling the LLC a holding company. The agent agreed, if the medical reimbursements weren’t derived from criminal proceeds.
The defense began putting on its case Friday, calling a medical billing and coding expert as its first witness. The witness testified that she analyzed the nearly 300 patient records cited in the indictment. Based on the notes from the patients’ office visits, she told the jury Stehl largely coded and billed these visits properly. The witness said she only found two coding errors, stating Stehl’s records only had a 9 percent margin of error, which is lower than average. The government cross-examined the witness, asking a number of questions about her qualifications. She testified she analyzes records on behalf of doctors to help them obtain higher reimbursements. The government questioned whether she was qualified to determine the medical legitimacy of those records, asking whether she had a medical background or ever worked in a clinical setting.
The defense is expected to call another expert on Monday, it’s unclear whether Stehl will testify. Since Stehl’s arrest in August 2018, he’s maintained his innocence.