A Texas federal judge tossed a superseding indictment accusing 10 doctors, two pharmaceutical executives and two business entities of a kickback scheme involving prescriptions that spanned six years from 2013 to 2019.
The defendants had moved to dismiss the superseding indictment on several grounds, including statute-of-limitations issues.
Rather than respond to that motion, the prosecutors moved to dismiss the case “in the interests of justice.”
U.S. District Judge Karen Gren Scholer granted the government’s motion and dismissed the case in its entirety.
Defense lawyers argued the government’s own timeline showed the alleged conduct ended no later than October 2019 — more than five years before the superseding indictment was filed in January 2026.
“The original indictment reached back ten years and had a duplicity problem, merging two different conspiracies into one,” said Paul Coggins, co-counsel for lead defendant Amir Mortazavi. “It stretched conspiracy law past the breaking point.”
Coggins, with Troutman Pepper Locke, said the federal government attempted to resolve the issue by returning a superseding indictment, which rendered the case outside the five-year statute of limitations.
“The government rightly moved to dismiss the suit,” said Coggins, who teamed with co-lead counsel Jennifer McCoy and attorneys Alex Lancey and Whitney Taylor.
The indictment alleged that executives and physicians participated in conspiracies tied to pharmacy businesses operating under “Next Health” from 2013 to 2018 and “Altus/Pharma Select” from 2017 to 2019.
Prosecutors alleged that physicians received kickbacks in exchange for referring prescriptions, including highly lucrative pain creams, to affiliated pharmacies, in return for a share of the profits from those prescriptions. The profits allegedly were funneled back to the doctors through various marketing firms and management service organizations, including Trinity Champion and Hexamed.
The indictments charged the individuals and businesses with conspiracy to violate the Travel Act, specifically the Texas Commercial Bribery Statute, and conspiracy to deny patients their right to honest services, as well as with conspiracy to commit money laundering:
- Medical doctors Robert Leisten, Amy Haase, Arnold Farbstein, Barry Weinstein, Eric Berkman, Jorge Cuza, Katherine McCarty, James Ellis and David Wolf.
- Executives Amir Mortazavi, who held various titles including chief business development officer, chief commercialization officer and chief executive officer of Next Health Pharmacy, and Arvin Zeinali, whose titles included senior vice president of pharmacy and president of pharmacy.
- And management service organizations Trinity Champion Healthcare Partners and Hexamed Business Solutions.
Brandon N. McCarthy, who represented David Wolf, said under the indictment, the doctors were the fall guys.
“The guy that made all the money and conned everyone was the star witness,” McCarthy said. “You can’t accidentally commit a felony. A lot of them got conned into entering this business.”
McCarthy, with Katten Muchin Rosenman, said the doctors were talked into the partnership by the marketers.
“My doctor never set foot into Next Health or Altus. He had no idea how they ran the business. He was just a passive investor. The marketers were making 90 percent of the money.”
“It is terrible you can be indicted for felony for owning 1 percent of a company that you know nothing about,” McCarthy said.
He said he was especially perplexed, knowing his client was an 81-year-old retired doctor with a prior 50-year unblemished criminal and medical board record.
“It didn’t make any sense. It was a life sentence for him. It was horribly unsettling. Yet they would not offer anything other than prison time.”
McCarthy said there was nothing in the indictment alleging patient harm or unnecessary medical care. Also, his doctor’s prescribing habits did not change upon joining the partnership – something that might have changed if trying to bilk the system.
Robert Leisten’s lead counsel, Chris Davis, with Gray Reed, called the indictment “a borderline case at best.”
“They never should have brought it in the first place,” he said. “ … We’re thrilled for our client that it was dismissed. It could have easily been resolved by the private healthcare companies.”
Davis said the 10 indicted doctors didn’t know each other, making it difficult to claim it was a criminal conspiracy.
“These guys weren’t making money hand over fist,” he said. “These doctors didn’t even know each other until they were indicted.”
Gray said the case seemed to take “on a life of its own” and tried to “bootstrap a couple of different conspiracies into one.”
“It was ill contrived,” he said. “They really were trying to make this work.”
Davis, who was assisted by attorneys Anthony Box, Angela Brown and Derek Younkers, said fundamental questions should have been asked before proceeding with the case.
“The amount of money involved was in no shape or form the amount you would put your career at risk,” he said. “Why would my client put his career at risk for a small dollar figure?”
The scheme began in 2013 with Next Health, a holding company that was principally controlled by Andrew Hillman and Semyon Narosov. They pleaded guilty in 2018 to conspiracy to launder monetary instruments. Hillman was sentenced to five years and six months in prison, and Narosov’s sentence was six years and four months.
A marketer, Vinson Woodlee of Med Left, also participated, according to the indictment. He pled guilty in a separate case to conspiracy to solicit and receive kickbacks for referrals to federal health care programs but has not been indicted in this case.
Hillman and Narosov were also convicted in the massive $200 million kickback scheme involving the now-defunct Forest Park Medical Center that carried more than 20 indictments.
Next Health owned and controlled dozens of associated business entities and pharmacies. The company agreed to split profits with physicians from prescriptions filled at its pharmacies, according to the indictment.
In 2017 and 2018, Hillman, Narosov and Woodlee were involved in moving a large share of Next Health’s pharmacy business to an entity called Altus or Pharma Select, the indictment alleges.
Prosecutors allege Woodlee operated fake management service organizations, Trinity and Hexamed, that did not provide real services but instead were used to conceal payments Altus made to referring physicians.
Between 2017 and 2019, Altus received reimbursements from pharmacy benefit managers, such as CVS Caremark, totaling more than $3 million from illegally purchased prescriptions, according to the indictment. Med Left got about half the profits from Altus and distributed the payments to physicians through the management service organizations, the indictment describes.
Part of the alleged scheme included veiling illegal payments as legitimate returns on investment from physician ownership, the indictment states. Sometimes the alleged kickbacks were made to a member of a referring physician’s household, the indictment claims.
A September 2014 letter signed by executive Mortazavi claimed the partnership “realized a return on investment of 1878% in the prior month.”
Other written communications between doctors and business partners described in the indictment discussed generated revenue.
In 2018, a confidential informant for the FBI met with executives Mortazavi and Zeinali in Dallas and purported to represent a group of doctors seeking payment for their prescriptions. The executives referred the informant to Woodlee, whom he later met with in San Antonio. Woodlee “explained in detail” how participants got paid for prescriptions sent to Altus, the indictment says, noting the conversation was recorded.
At the time of the superseding indictment, government officials said in a release that they were attempting to ensure the integrity of the medical system.
“Our community trusts doctors to write prescriptions that serve their patients’ best interests. Kickbacks and bribes cloud physicians’ judgment,” said former U.S. Attorney Leigha Simonton at the time. “The U.S. Attorney’s Office is proud to hold accountable those who abandon the Hippocratic oath in the name of personal enrichment. We will not permit greed to taint the practice of medicine.”
Then, FBI Dallas Special Agent in Charge Chad Yarbrough said the case was part of an effort to ensure the health care system is not used for personal benefit.
“The alleged scheme in this indictment included doctors who used their positions of trust to profit personally at the expense of their patients. Health care fraud affects all sectors of the economy and costs U.S. taxpayers billions of dollars each year,” said Yarbrough. “The FBI is committed to investigating and exposing all forms of health care fraud. We will work with our law enforcement partners to hold anyone accountable who uses the health care system for their own personal benefit.”