Date: 09-28-2017

Case Style:

Case Number: 4:15-cr-00038-JM

Judge: James M. Moody

Court: United States District Court for the Eastern District of Arkansas (Pulaski County)

Plaintiff's Attorney: Anne E. Gardner, Cameron Charles McCree

Defendant's Attorney: Mark Hampton

Description: Little Rock, AR - Perryville Pharmacist Sent to Prison for 10 Years, to Pay $850,00 for Role in Pill Scheme

Christopher Grant Watson, 44, of Perryville, a former pharmacist and owner of Perry County Food and Drug Store, will be spending the next 10 years in federal prison.

United States District Court Judge James M. Moody sentenced Watson to a statutory maximum 120 months’ imprisonment for Watson’s lead role in a conspiracy to unlawfully distribute prescription opioid pills from his drug store, his participation in a scheme to defraud Medicare/Medicaid, and a structuring offense. Watson was also ordered to pay a monetary judgement in the amount of $850,000 representing unlawful proceeds from the offense, which includes $54,000 in restitution to Medicare/Medicaid.

On October 5, 2016, Watson pleaded guilty to conspiracy to dispense hydrocodone without an effective prescription, healthcare fraud (resulting from falsely billing Medicare Part D for patients’ claims), and structuring bank account cash deposits to avoid bank reporting requirements. Judge Moody sentenced Watson to the statutory maximum on all three charges—60 months on the drug conspiracy and structuring charges, and 120 months on the healthcare fraud—and ordered the sentences to run concurrently.

Christopher Watson was a trusted local pharmacist upon whom his community depended,” Harris said. “Instead, he helped spread poison and addiction in his community. His criminal actions contributed to one of the largest health epidemics Arkansas is facing. This office is committed to rooting out all bad actors in the healthcare industry, and we will continue to aggressively pursue investigations into crimes such as Watson’s.”

In July 2014, as part of the national effort, the DEA New Orleans Field Division launched an aggressive campaign that targeted the largest sources of illegally diverted pharmaceuticals in Arkansas, Louisiana, Mississippi, and Alabama. This effort, dubbed Operation Pilluted, involved the extensive investigation of rogue practitioners, pharmacists, and other DEA Registrants, as well as the aggressive pursuit of more traditional criminal organizations involved in the distribution of pharmaceuticals. Under the auspices of Operation Pilluted, concerted efforts were initiated to heighten community awareness concerning the perils of prescription drug diversion and the strategic implementation/strengthening of associated diverted pharmaceutical laws.

On May 6, 2015, a Grand Jury returned a superseding federal indictment against Watson and 27 others following a year-long investigation initiated by the DEA and the Arkansas State Police (ASP). Watson and his father, Tommy Watson, owned and operated the Perry County Food and Drug store, and Christopher Watson was the managing pharmacist at that location. Christopher Watson sold tens of thousands of Schedule II, III, and IV pills and other pharmaceuticals from the pharmacy shelves after hours and forged prescriptions to account for the missing pills, and filled fraudulent prescriptions presented by pharmacy customers. A pharmacy audit showed more than 49,000 oxycodone pills missing and more than 72,000 hydrocodone pills missing.

Tommy Watson, 68, pleaded guilty to misprision of a felony (concealing knowledge of a felony from authorities) on February 1, 2017, and on August 30, 2017, he was sentenced to two years’ probation and a $50,000 fine.

“The abuse of prescription drugs remains a significant problem in communities across the nation, including here in the Eastern District of Arkansas,” said Azzam, Special Agent in Charge of the DEA New Orleans Field Division, which includes the Little Rock District Office. “For the health and safety of our citizens, the DEA will continue to target the illegal diversion of these pharmaceuticals, which can destroy lives. It is particularly appalling when the perpetrator of such illegal acts is a health care professional, like this pharmacist, responsible for ensuring that potentially dangerous drugs are dispensed properly. We hope that the sentence Christopher Watson received in this case serves as a reminder to anyone who might illegally divert pharmaceuticals that they will be held accountable for the harm they cause.”

The operation resulted in the issuance of an Immediate Suspension Order to the Perry County Food and Drug store by the Administrator of DEA on the grounds that the pharmacy constituted an imminent danger to public health and safety. The employees of the pharmacy were prohibited from possessing and/or dispensing controlled substances pending a federal administrative hearing. Following the hearing, the pharmacy’s DEA Registration was permanently revoked on January 26, 2015.

“Watson used his position as a pharmacist, a position of trust, to illegally distribute drugs to members in his community,” Upchurch said. “It’s this kind of illegal activity that allows the opioid epidemic to metastasize throughout our country. I am proud of and appreciate the work conducted by the FBI, U.S. Attorney’s Office for the Eastern District, DEA—Little Rock Tactical Division Squad, Conway Police Department, IRS, Arkansas State Police, and our other law enforcement partners as they continue to investigate and bring to justice individuals conducting this type of illegal practice.”

The $850,000 judgment represents proceeds Watson received from his illegal sales of hydrocodone and other pharmaceuticals, at the price of $2 per hydrocodone pill and $15 per oxycodone pill. Additionally, Watson received $54,000 from Medicare after billing Medicare patient accounts for high dollar pharmaceuticals which the patients never received.

“The role of IRS-CI in narcotics investigations is to follow the money and unravel complex financial transactions,” said Tracey D. Montaño, Special Agent in Charge, IRS Criminal Investigation. “Mr. Watson executed a scheme to defraud the Medicare system for his own personal financial gain, and while doing so illegally distributed narcotics into the community, contributing to a growing and concerning epidemic. IRS Criminal Investigation is proud to provide its financial expertise as we work alongside our law enforcement partners to bring criminals to justice.”

Of the 28 original defendants, 23 have pleaded guilty. Charges were dismissed on five defendants.

This case was investigated by DEA—Little Rock Tactical Diversion Squad, which includes officers from the Conway Police Department, Beebe Police Department, Little Rock Police Department, Pine Bluff Police Department, Jefferson County Sheriff’s Office, and the Benton Police Department. Also involved in the investigation were the FBI, Arkansas State Police, IRS—Criminal Investigations, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), United States Secret Service, United States Marshals Service, and the Perry County Sheriff’s Office.

Outcome: Defendant was sentence to the statutory maximum sentence of 120 months in prison.

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