Ex-Georgia Insurance Chief’s Friday Sentencing
TL/DR –
Former Georgia Insurance Commissioner John Oxendine has plead guilty to a conspiracy to commit health care fraud between 2015 and 2017. The scheme involved Oxendine brokering an illegal kickback agreement between Dr Jeffrey Gallups and a Texas lab company, NextHealth, resulting in fraudulent insurance claims for unnecessary medical testing and a loss to insurance companies of $760,454. Oxendine, who claims to be a “middle man” in the scheme, received hundreds of thousands of dollars in kickbacks, of which he kept more than $40,000, with the rest used to pay Gallups’ debts and donations.
Ex-Insurance Commissioner Serves Sentence for Embezzlement; Pleads for Lesser Charge
Jim Beck, the former Insurance Commissioner of Georgia, is serving a seven-year prison sentence after being convicted in 2021 for embezzling over $2 million from the Georgia Underwriting Association.
Former Insurance Commissioner Oxendine, who served for 16 years, contests the proposed sentence for his role in a similar scheme. Oxendine argues that he was merely a middleman in a fraud orchestrated by Alpharetta doctor Jeffrey Gallups, who was sentenced to three years in prison in June 2022.
Oxendine believes the penalty should be no more than what Gallups received, as both parties equally benefitted from the scheme estimated to net $3 million while accruing a loss of $760,454 to insurance companies.
While arguing his inability to pay the $700,000 fine, Oxendine insists that his past service as insurance commissioner and the support from friends, family, and former associates should warrant a lighter sentence.
Prosecutors claim that Oxendine, along with Gallups, defrauded health care insurance providers and received kickbacks amounting to thousands of dollars. The fraudulent scheme involved unwarranted genetic and toxicology testing by the Texas lab company NextHealth between 2015 and 2017.
According to prosecutors, Gallups ordered unnecessary lab tests at his clinics, splitting the money generated by these tests with NextHealth. Some patients were reportedly billed as much as $18,000 for these tests.
Oxendine received hundreds of thousands of dollars in kickbacks from the lab company, convincing doctors in Gallups’ clinics to order the lab tests and using the funds to pay the doctor’s debts and charity donations.
In May 2022, Oxendine was indicted and pleaded not guilty. He was scheduled to stand trial in April on charges of conspiracy to commit health care fraud and money laundering.
Gallups and his company agreed to pay just over $3 million to settle a related civil case, with the settlement late fee increasing the amount to $5.3 million. Furthermore, in another civil fraud case in Texas, NextHealth was ordered to pay over $218 million in June 2023.
In addition to this, Oxendine has also faced allegations of campaign finance mismanagement and settled his cases with the Georgia’s ethics commission in exchange for about $128,000 in donor money in May 2022.
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