May 25 2016 11:59 AM

DeWeese pleads guilty To defrauding Blue Cross


Former Ingham County state Rep. Paul DeWeese is facing up to five years in federal prison after pleading guilty last week to defrauding Blue Cross Blue Shield of Michigan through his medical practice.

City Pulse has also learned that DeWeese voluntarily surrendered his Michigan medical license for life earlier this month and agreed to pay a $10,000 fine. His license was suspended last year following an FBI raid on his Lansing office.

Before felony charges were ever formally entered in early April, DeWeese had signed a plea agreement in the U.S. District Court in Grand Rapids.

DeWeese admitted to instructing his staff to falsify records at NBO Medical, clinics the physician owned in Flint and Grand Rapids but wasn't present at. Two individuals included his electronic signature on records he was obligated to personally review in order to be able to bill BCBSM for their cost.

As part of his plea agreement, DeWeese could face up to five years in jail, three years of probation, a fine up to twice as much of the losses involved and a mandatory $100 fee.

He will have to pay Blue Cross Blue Shield $172,991.56 in restitution — precisely the amount DeWeese had the insurance corporation fraudulently billed for. He could be fined, though, up to twice that amount.

The agreement filed in federal court was signed by DeWeese March 22 and by his lawyer, Larry Willey, on March 28.

"This was a resolution that happened before there was a charge, which is not unusual," Willey said. "In this case, negotiations occurred before there was a formal charge. That's the reason for the dates."

DeWeese had first been named in a civil suit in December 2012, where two former employees of the clinics alleged they had been improperly billing patients. When they raised concerns, they were fired.

They brought a host of allegations against DeWeese, accusing him of also defrauding Medicare and Medicaid by enticing patients into receiving medically unnecessary screenings and physical therapy, then billing the programs to increase revenue while not collecting copays from the patients, according to court documents.

The terms of the plea agreement indicate the federal prosecutors, who were originally a party in the civil suit along with the state, won't be pressing additional charges in that case.

The civil suit was settled out of court earlier this month. The original complaint demands a jury trial for their allegations, but that will evidently not be held. Court documents revealed a statement from DeWeese, evidently discussing his conduct.

He admits that his lax approach to pain management "made it easier for some of my patients to divert to illegal ends controlled substances I prescribed."

"I pursued this arena of medical practice because there is a high unmet need for treatment and because of the immense amount of suffering associate with chronic unrelieved pain and untreated addiction," he said in the statement. "While my motivation was honorable, my actions at times contributed to the problems."

DeWeese is scheduled to be back in court for sentencing Aug. 22.