Former doctor charged in drug fraud

A former Napa doctor was arraigned Tuesday in San Francisco for allegedly operating a scheme to defraud Medicare and distributing controlled substances by writing false prescriptions and then claiming reimbursement, the U.S. Department of Justice said.

A federal grand jury indicted Paul D. Woodward, 71, along with Karen Kramer, 54, both of Napa, with conspiring to defraud Medicare of more than $1.3 million on December 4, federal prosecutors said today. The indictment remained sealed until December 11, 2014, when Kramer made her first appearance in federal court.

According to the indictment, Woodward wrote prescriptions to Kramer for controlled substances, including fentanyl, and falsely claimed the prescriptions were for a legitimate medical purpose. Federal prosecutors say those claims for the prescriptions were then submitted to Medicare for reimbursements between January 2006 and June 2010.

Additionally, Woodward is charged with prescribing controlled substances, including oxycodone, hydromorphone and hydrocodone for illegitimate purposes to other patients. Kramer was arrested on December 10, 2014 and ordered detained.

The U.S. Marshal’s Service is currently holding her in custody. Her next court appearance is set for January 8. Woodward made his first voluntary appearance Tuesday before U.S. Magistrate Judge Bernard Zimmerman and was released on a $100,000 secured bond.

Both defendants are scheduled to appear on January 29 at 1:30 for an initial appearance before U.S. District Court Judge William H. Orrick. If convicted of conspiracy to commit health care fraud, or health care fraud charges, both face a maximum sentence of 10 years and a fine twice the gross gain or loss for each violation, plus restitution.

If convicted of the distribution of a controlled substance charges, Woodward faces a maximum of 20 years jail time and a fine of one million dollars.

The prosecution is the result of an investigation by the U.S. Department of Health and Human Services, Office of Inspector General, and the U.S. Drug Enforcement Administration, with the assistance of the California Department of Insurance, the Napa County Sheriff’s Office and Napa police.