John Oxendine, Health Care Fraud and Money Laundering, Georgia 2022

ATLANTA, Georgia – Former Georgia Insurance Commissioner John W. Oxendine has been arraigned on federal charges of conspiracy to commit health care fraud and conspiracy to commit money laundering.

Oxendine, 60, of Duluth, Georgia, was indicted by a federal grand jury on May 17, 2022.

The indictment alleges that Oxendine conspired to obtain kickbacks for unnecessary genetic and toxicology lab tests, and used his insurance business to hide those kickbacks,” said U.S. Attorney Ryan K. Buchanan.

According to U.S. Attorney Buchanan, the charges, and other information presented in court: John W. Oxendine allegedly conspired with Dr. Jeffrey Gallups and others to submit fraudulent insurance claims for medically unnecessary Pharmacogenetic, Molecular Genetic, and Toxicology testing.

Physicians associated with Jeffrey Gallups’s ENT practice were pressured to order medically unnecessary Pharmacogenetic, Molecular Genetic, and Toxicology testing from a testing lab in Texas. As part of the health care fraud scheme, the lab company agreed to pay Oxendine and Gallups a kickback of 50% of the net profit for eligible specimens submitted by Gallups’s practice to the lab company for the testing.

In total, the lab company submitted claims seeking over $2,500,000 in payment for laboratory tests ordered by Gallups’s practice. The insurance companies paid over $600,000 to the lab company as a result of these claims. The lab company then paid $260,000 in kickbacks through Oxendine’s insurance services business. Oxendine used a portion of the kickback money to pay debts on behalf of Gallups, paying a $150,000 charitable contribution and $70,000 in attorney’s fees.

This case is related to United States v. Gallups, 1:21-cr-00370-SCJ, in which Dr. Jeffrey Gallups pleaded guilty to health care fraud.

Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.

This case is being investigated by the Federal Bureau of Investigation, Department of Health and Human Services Office of the Inspector General, and the Defense Criminal Investigative Service.

Assistant U.S. Attorney Christopher J. Huber, Deputy Chief of the Complex Frauds Section, is prosecuting the case.

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