Doctor, Pharmacy Owners Charged in Drug Ring

A doctor and two pharmacy owners were arrested in rural Northern California on Thursday on charges of running a state-funded drug dealing operation, peddling powerful prescription narcotics that investigators say killed three patients.

State Atty. Gen. Bill Lockyer, announcing the Shasta County arrests by state and local authorities, estimated that as many as 3,000 clients were involved. At least half suffered no illness.

“We’re concerned that several hundred or perhaps thousands of patients who have been relying on this drug [oxycodone]. . . are going to be showing up at clinics and emergency rooms with withdrawal symptoms,” Lockyer said.

Authorities filed three homicide charges and 24 other counts of Medi-Cal fraud and improper drug prescribing against Dr. Frank Fisher of Anderson and Stephen and Madeline Miller, owners of Shasta Pharmacy in Redding. Each was being held on $1-million bail.

The state believes that through improper Medi-Cal billing, the three defrauded the state of at least $2 million. It is working to freeze their bank accounts and other assets.

Oxycodone, prescribed to many of the patients, is usually given as a painkiller of last resort to terminal cancer patients.

A review by the attorney general’s office of sales from the Millers’ pharmacy indicated that as much as 14,000 grams of oxycodone may have been dispensed in the last year, compared with a statewide average of 78 grams per pharmacy and 89 per hospital.

Fisher was charged with submitting false Medi-Cal claims in May, before the patients’ deaths. Asked whether the deaths could have been prevented if the investigation had moved more quickly, Lockyer declined to criticize his predecessor, Dan Lungren.

“It’s easy for me to say. I wasn’t here,” he said. But building a case takes time, he added.

The first to die was 19-year-old Bruce Johannsen Jr., who overdosed in early July. Rebecca Mae Williams, 34, followed in August, and Tamara Stevens, 38, on Sept. 10. The Shasta County coroner’s office found that all three had taken lethal doses of oxycodone and none, the attorney general said, was being treated for cancer.

Also arrested Thursday were two of Fisher’s employees, who were charged with selling illegal drugs to clinic patients, including methamphetamines and marijuana.

It was “a one-stop shopping center” for drug abusers, said Jack Nair, the agent in charge of the state’s Bureau of Narcotics Enforcement office in Redding.

Nair ran an undercover operation last month at Fisher’s clinic in the 8,600-resident community of Anderson. The doctor would often see patients for just a few minutes, Nair said, and would sometimes say, “I’ll prescribe these to you. They work well with amphetamines.”

Instead of filling their prescriptions at the pharmacy next door to the clinic, patients traveled seven miles to Shasta Pharmacy, leading investigators to suspect collusion between Fisher and the Millers. Some of the narcotics may have been prescribed to Madeline Miller, under her maiden name, Lockyer said.

According to 1998 federal Drug Enforcement Administration data, Shasta Pharmacy became the state’s top wholesale buyer for oxycodone and the 10th largest in the nation. The Millers’ monthly Medi-Cal billing rose from $52,000 in 1997 to $250,000 last year.

Fisher, meanwhile, is accused of orchestrating higher Medi-Cal billings for himself by switching his official status to a rural health clinic, causing reimbursement to rise from $17 to $50 per patient. The state pays rural doctors more to encourage medical practices in more remote areas.