Fraud in Medical Marijuana Field
Most states have introduced regulation that allows for marijuana (or its active chemicals) to be prescribed for medically necessary uses. A growing amount of states have introduced legislation to allow recreational uses of marijuana. Virginia is one of the latest states to approve this type of use.1 However, it is important to remember, that marijuana, even medical marijuana, remains illegal on the federal level, even if it is not always enforced.2
Due to this disparity between state and federal law, knowledgeable and experienced attorneys are needed to help individuals and organizations that wish to prescribe marijuana for medical uses are not in violation of both local and federal regulation.
Our attorneys have years of varied experience in helping individuals understand the applicable laws in association with marijuana. They can help you understand what your state will and will not allow. They can also help you to assess the federal risk by entering marijuana distribution for medical uses.
We do not recommend not consulting with an attorney before distributing, prescribing, or even using medical marijuana. It is an illegal substance on the federal level. Even if you completely comply with local legislation, it does not mean that the federal government will not enforce the law against you.
If you or a loved one is being charged with a crime of fraud associated with medical marijuana, please call our office today! Our dedicated team of experienced and knowledgeable attorneys is here to help you!
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What is medical marijuana?
Medical marijuana is where the plant or its active chemicals are used to treat various medical conditions. The active chemicals, called cannabinoids that are used in pill form have been approved by the FDA in three formulations. Also, this has only been approved for a small range of diseases.3 The plant, even though it contains the same cannabinoids, has not been approved by the FDA and remains illegal.4
What does medical marijuana treat?
Medical marijuana has been shown to be helpful with various diseases and symptoms. However, the research is not conclusive, especially since there are major discrepancies with local laws. It has been suggested that the active chemicals in marijuana can be helpful to those that are in the end stages of a disease regain their appetite and reduce nausea. It is also thought to be helpful with a few different diseases and symptoms including pain and seizures.5, 6
Why is medical marijuana still illegal from the federal government if many states have adopted laws allowing it?
The federal government created the Controlled Substances Act. In that act, it created a scheduling system that arranged drugs by their usefulness, their potential for abuse, how addictive the drug can be, and other factors.
If a drug has very limited medical benefit, a high potential for abuse and causes dependability, then it will be classified as a schedule I drug (for more information, scroll below to What is the Controlled Substance Act? Section). Marijuana is one such drug that has been classified as a Schedule I due to its potential for abuse, addictive properties and limited or no medical benefit.7, 8, 9
Marijuana was first made illegal by the federal government. It was then classified as a schedule I drug when the CSA was enacted. At that time, most of the states had similar laws to control marijuana as well.
It wasn’t until the late 1990’s that California made headways with allowing marijuana to be used for medical purposes. This started a change in the attitude of some states to allow the use of the plant for medicinal purposes.10
The research has been limited and somewhat inconclusive concerning medical marijuana.11 It is also suggested that marijuana’s useful medical effects can be achieved through different drugs and supplements with much less risk.12 Also, the potential for abuse of these systems is also very high.13
A physician would prescribe marijuana for a medical purpose, but in reality, is allowing the individual to have a legal means of obtaining marijuana for recreational purposes.
Due to this dearth of sound scientific evidence that marijuana is both effective and safe to use in certain conditions, and the widespread differences in what states will allow, the federal government has maintained that marijuana is illegal and can be enforced even in the states that have the most lenient laws about marijuana use.14
There are many instances where a state has opposing legislation to the federal government. This leads to widespread confusion of what the law might be or what might be enforced. Again, this illustrates the importance of consulting with attorneys who have knowledge in this area and can help you understand what you can do.
What is my state’s regulation concerning medical marijuana?
State regulations concerning medical marijuana are extremely varied.15 Even cities in the same state have shown large differences in the law.16 Some have legalized recreational use of the drug, while others have allowed limited use of the active chemicals in marijuana to be used to treat a narrow range of diseases and symptoms. It is important to consult with an attorney to be aware of any new laws, local, state and federal, concerning medical marijuana.
If I am complying with my state’s regulation concerning medical marijuana, how can the federal government charge me with a crime?
The US Constitution contained a provision that is commonly called the Supremacy Clause. Any state law that conflicts with or opposes any federal law will be invalid. As long as Congress had the authority to create the law, no state can create laws to oppose it or undermine its intended effect.16
Congress enacted the Controlled Substances Act in 1970. It was decided by the US Supreme Court that Congress had the authority to create the Act. A patient’s medical marijuana that was lawfully (in the state of California) prescribed by a doctor was seized by the DEA. The Court determined that Congress had the authority to create this law and that the marijuana could be seized from this patient.17
Therefore, the federal law concerning marijuana is the controlling law, and it can be enforced at any time against any individual that violates the controlled substances act.
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What is the Controlled Substances Act?
The Controlled Substances Act (CSA) was enacted in 1970 to curtail drug abuse. It was also enacted to nullify a Supreme Court decision that invalidated a law that prohibited certain drugs such as marijuana.18
The CSA is extensive, but it essentially aims to regulate substances by placing them into five schedules. It also provides severe penalties for violating the provisions of the act.
Drug schedules are determined by a variety of factors including:
- Actual or potential relative for abuse;
- Scientific evidence of its pharmacological effect, if known;
- The state of current scientific knowledge regarding the drug or other substance;
- Its history and current pattern of abuse;
- The scope, duration, and significance of abuse;
- What, if any, risk there is to the public health;
- Its psychic or physiological dependence liability; and
- if the drug is to be known as a precursor to any drug that is already included in the act.
The discretion for adding substances, changing or removing schedules is given to the US Attorney General.19
Schedule I drugs are drugs that have a limited medical benefit and have a high potential for abuse. These drugs are prohibited from any use. Even possession of a schedule I drug is a crime.20 This is the current classification of marijuana.21
Penalties for Violating the CSA
Violations of the CSA can result in severe civil and criminal penalties. Depending on the offense, the fines can be millions of dollars, up to 10 years in prison, loss of medical licenses, and substantial forfeiture of real and personal property.22
Can I avoid being prosecuted for distributing medical marijuana in an area where local regulations allow it?
The short answer is you can’t.
The federal government has a controlling law. Even if there are regulations in your state and area that allow it, you are still violating federal law.
However, during the Obama administration, many physicians could prescribe medical marijuana in areas that allowed it, if they remained within those regulations. This has been changed with an announcement from former Attorney General Jeff Sessions that states that these violations can be enforced against individuals in states that have authorized the use of medical marijuana.23
Since this announcement, there hasn’t been an overwhelming amount of enforcement against doctors that are prescribing medical marijuana. Most of the cases where the federal government has enforced the law is upon those individuals and organizations that are using fraudulent means to prescribe or dispense medical marijuana. These are determined on a case by case basis.24
What are some fraudulent practices associated with medical marijuana?
Since federal law does not allow marijuana to be prescribed, we do not recommend you engage in such a practice. There are a number of practices that will cause the federal government to charge you with violations against the Controlled Substances Act.
Due to the nature of these activities, you may be in violation of other laws, both state and federal. Here is a list of activities that will likely invoke federal and state governments to act.
- Prescribing medical marijuana in an area where the state and local laws do not recognize it.
- Prescribing medical marijuana to individuals that you know have no medical necessity for the drug.
- Prescribing more than the necessary dosage
- Prescribing medical marijuana under the guise of medicinal purposes, but knowing it is for recreational use.
- Prescribing medical marijuana for uses not approved by local regulations.
- Prescribing medical marijuana for kickbacks, bribes, or other illegal activity.
- Prescribing medical marijuana and filing claims of a different drug to federal and private insurance companies for approval. (Medicare and Medicaid and many insurance companies do not provide any reimbursement for medical marijuana. Also out of pocket costs are not allowed to go towards their deductible either.)25
- Dispensing medical marijuana to those without a prescription.
- Dispensing medical marijuana to those with a history of abuse of the drug.
- Submitting claims of medical marijuana to insurance companies under a different drug name in order to obtain approval.
- Not keeping complete records of patients, especially when prescribing marijuana.
- Advocating for a patient to use medical marijuana when other viable alternatives exist that have not been tried.
- Prescribing medical marijuana to be dispensed from a facility that you have a financial interest in.
- Prescribing medical marijuana to individuals that have contraindications.
- Prescribing medical marijuana to an individual that has a medical necessity, on the condition that the patient shares some of the marijuana with you.
- Creating or falsifying patient records to obtain medical marijuana for yourself or another.
This list is not comprehensive, and all the fraudulent practices associated with medical marijuana cannot be summarily listed here.
If you wish to prescribe or distribute medical marijuana in an area that has allowed such a practice, please consult with our attorneys and they can make sure that you are following the governing laws and help minimize the risk of criminal charges as much as possible. However, due to the nature of the federal law prohibiting marijuana, we cannot guarantee that no criminal charges will be brought against you.
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If you choose to prescribe or dispense medical marijuana, you will be held civilly and possibly criminally liable for any adverse effects your patients experience with their use of medical marijuana.25
Reports of medical marijuana fraud.
Doctor arrested for illegally obtaining controlled substances.
Charge: Fraud and identity theft
Allegations: A doctor obtained controlled substances through fraud and identity theft, including falsifying patient records, some of which were deceased.
In 2017, a physician was arrested for falsifying patient records to obtain controlled substances.
According to the DOJ press release, Dr. Paul Biddle was arrested for a scheme to obtain controlled substances for patients that did not need them. He falsified patient’s records, including two of which were deceased. One such substance was marijuana.
In his trash, it was found that Dr. Biddle was using different patient’s names and using cash payments to pay for the controlled substances. After they were purchased, they were sent to this home or office. This practice lasted for four years. In total, he wrote 33 illegal prescriptions for controlled substances.
The investigation is ongoing, and the doctor may be facing significant penalties and a possible lengthy prison sentence.
Doctor arrested for accepting cash payments for medical marijuana certificates.
Charge: Receiving kickbacks and cash payments in exchange for services, and tax fraud
Allegations: A doctor arranged for cash payments in exchange for medical marijuana certificates and received kickbacks from referring patients for services that they did not need.
In 2015, a physician was charged with receiving kickbacks for referring patients for medical services that were not necessary. Also, she had patients make cash payments in exchange for her signature on medical marijuana certificates.
According to the DOJ press release, Dr. Shannon Wiggins and her husband received payment for electrodiagnostic services for patients that did not need the services, and many times the services were never rendered.
Dr. Wiggins also charged cash payments for medical marijuana certificates, and also never reported those payments to the IRS.
Dr. Wiggins and her husband have been ordered to pay restitution to the federal programs they defrauded.
Facility owner pleads guilty to tampering with public records
Charge: Tampering with public records
Allegation: Clinic owner forged a physician’s signature on some medical marijuana forms.
In 2018, an owner of a clinic in Delaware forged a physician’s signature that was no longer working at the office, on several medical marijuana forms.
According to an AP report, Carolan Krajewski forged a physician’s signature on three different medical marijuana prescriptions. The physician no longer worked at the office at the time she signed the forms. She acknowledged that she had signed the forms for the physician.
She pled guilty to a first-degree and second-degree charges of tampering with a public record. In addition to two years of probation, she can no longer associate with old patients or operate any medical marijuana business in the future.
I have been charged with fraudulent practices associated with medical marijuana. What should I do?
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Our dedicated team of attorneys has the proper tools to defend you to the full extent of the law. Please call them today, and they will help you understand the charges that have been brought against you and how to best defend yourself against them.
Fraudulent activity in association with a controlled substance such as marijuana can result in very serious civil and criminal penalties, both on the state and federal level. If your activity results in the death of a patient, you could be facing a life sentence in prison.
This is why we strongly recommend that you contact us since we have the legal experts that understand the law and have years of experience in defending people just like you.