John Edward Mullikin, Health Care Related Fraud, Colorado 2008

Defendant Found Guilty of Health Care Related Fraud

John Edward Mullikin, a 51-year-old man from Arvada, Colorado, was found guilty of 17 counts of mail fraud in a federal jury trial held in Denver. The verdict was announced late yesterday afternoon, and Mullikin was remanded into the custody of the U.S. Marshals Service immediately after.

The case was heard by Senior Tenth Circuit Court Judge David Ebel, who scheduled a sentencing hearing for May 15th at 2:00pm. Mullikin faces a maximum sentence of 20 years in federal prison and a fine of not more than $250,000.00 per count for each of the 17 counts.

According to the indictment and evidence presented to the jury, between April 2006 and July 2008, Mullikin devised and knowingly executed a scheme to defraud various individuals throughout the United States. The scheme involved luring individuals into paying monies to participate in a bogus clinical study with the promise of refunds and further compensation.

Mullikin promoted a study of his weight loss product, which he referred to as 'medication,' that he claimed was not a placebo. He recruited study participants by advertising in newspapers, magazines, and on the internet, using various business entities that contained materially false and fraudulent representations.

The defendant made false and fraudulent representations that the study was part of the National Institutes of Health Obesity Research Task Force and was conducted by a respected university research center. He also claimed that clients would be participating in an 'observational efficacy study' of his weight loss product, which had demonstrated significant effects in Phase I, Phase II, and Phase III clinical trials.

Mullikin required all participants to pay an advance fee of $150 'refundable deposit' for the Evaril II study and $144 'one-time refunded deposit' for the DBL-824 study. He promised compensation of over $1,000 by the conclusion of the 6-month Evaril II Study and $319.72 per month for 24 months (a total of $7,673.52) by the conclusion of the DBL-824 study. He assumed various names, including John Milliken, Jack Edwards, John Edwards, and Tim Alexander, to conceal his true identity.

The defendant created non-profit corporations, registered trade names, and did business under assumed names, including Progenics Research, Inc., IUCDHSC, Inc., RAND Corporation, Metacor labs, Evaril Study, and Research Study UCDHSC Evaril. He opened checking accounts at financial institutions in Colorado in his name and in the names of various business entities to receive checks and monies derived from the scheme.

Mullikin's scheme resulted in significant financial losses for his victims, who paid advance fees for a bogus clinical study. The guilty verdict marks a significant victory for law enforcement and serves as a warning to individuals who engage in similar schemes.

The case was investigated by the Food and Drug Administration's Office of Criminal Investigations and the U.S. Attorney's Office. The U.S. Marshals Service will continue to work to ensure that Mullikin serves his sentence and that justice is served for his victims.

Source: https://www.justice.gov/usao-co/pr/metro-denver-man-found-guilty-health-care-related-fraud-following-jury-trial