San Jose, CA – Donald Siao recently appeared to face federal charges that he illegally distributed hydrocodone and oxycodone pills in his medical practice and committed health care fraud, announced Acting United States Attorney Stephanie M. Hinds, Drug Enforcement Administration Acting Special Agent in Charge Peter A. Vainauskas, Federal Bureau of Investigation Special Agent in Charge Craig D. Fair, U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) Special Agent in Charge Steven Ryan, and the California Department of Justice, Division of Medi Cal Fraud and Elder Abuse (DMFEA).
The federal complaint alleges that Siao, of San Jose, is a medical doctor licensed by the state of California who conducted his practice in San Jose. His license authorized him to write prescriptions for Schedule II through V controlled substances for medical care. The complaint alleges that a prescription monitoring system identified Siao was a high prescriber, exemplified by a recent year when Siao wrote 8,201 prescriptions for controlled substances, including large quantities of hydrocodone and oxycodone and many instances of the dangerous combination of opioid, muscle relaxant, and benzodiazepine. An investigation followed.
During the investigation, the complaint alleges that undercover law enforcement agents posed as new patients and met with Siao at his medical practice. The complaint describes that during initial visits, the agents complained of pain in vague or general terms. Siao conducted little or no physical examinations, the complaint alleges. The initial and subsequent visits usually lasted approximately two minutes. In initial visits Siao prescribed hydrocodone or oxycodone, and the complaint describes that in follow-up appointments Siao continued to prescribe the same medicine and increased the amounts.
In one example in the complaint, an uncover agent posing as a patient met with Siao at an initial appointment and complained of pain. Following an eight second physical examination, Siao wrote a prescription for 30 pills of Norco, a hydrocodone-acetaminophen combination. In subsequent visits as short as 2 minutes and 10 seconds, the undercover agent requested larger prescriptions for reasons that included he had given away pills to his employees as work incentives and that he had ran out of pills when he went to a concert. Siao increased the size of the prescriptions, eventually writing a prescription for 90 Norco pills at his last visit. In another example in the complaint, an undercover agent requested and received a larger prescription of Norco so he could pay back friends with the pills. The agent then requested a prescription for Marinol, explaining he would not take the Marinol but rather would display the prescription at work as a pretext for his positive drug tests, saying “that way it covers the dirty drug test.” Siao replied “gotcha” and wrote the prescription.
The complaint also charges Siao with health care fraud and alleges that on May 9, 2018, he wrote alprazolam and oxycodone prescriptions for a patient without any legitimate medical purpose.
Siao is charged with three counts of illegal distribution of hydrocodone and one count of illegal distribution of oxycodone, all in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(C). If convicted of any of these counts, he faces a maximum penalty of 20 years in prison and a maximum fine of $1,000,000. Siao is also charged with two counts of health care fraud, in violation of 18 U.S.C. § 1347. If convicted of either of these counts, he faces a maximum penalty of 10 years in prison and a maximum fine of $250,000. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Siao made an initial appearance today in federal court before the Honorable Susan van Keulen, United States Magistrate Judge. He remains out of custody on bond. His next scheduled appearances are a hearing to review bond conditions on March 24, 2021, at 1 p.m., before U.S. Magistrate Judge van Keulen and a hearing for status on indictment set for April 19, 2021, at 1 p.m., before United States Magistrate Judge Robert M. Illman.
The charges contained in the criminal complaint are mere allegations. As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.
The case is being prosecuted by the United States Attorney’s Office for the Northern District of California. This prosecution is the result of an investigation by DEA, FBI, HHS-OIG, and DMFEA. Through DMFEA, the California Department of Justice regularly works with other law enforcement agencies to investigate and prosecute fraud perpetrated on the Medi Cal program against a wide variety of healthcare providers, including doctors and pharmaceutical companies. Through DMFEA’s civil and criminal enforcement efforts, the Attorney General has recovered tens of millions of dollars from and secured the convictions of hundreds of Medicaid providers who violate California laws through fraudulent and wrongful practices.
Source: US Attorney’s Office