ATLANTA — John Oxendine, Georgia's former insurance commissioner, was sentenced Friday to more than three years in prison for his healthcare insurance fraud conviction from earlier this year.
The Department of Justice announced a guilty plea in the case in March. The DOJ said at that time Oxendine and a co-conspirator had "referred unnecessary medical tests to a lab company in Texas in return for hundreds of thousands of dollars in kickbacks."
Oxendine's sentence was 42 months (3 1/2 years) in federal prison, three years of probation/supervised release after that, restitution of more than $700,000 and an additional fine of $25,000.
The sentencing largely aligns with what the Department of Justice had requested (44 months in prison along with the financial penalties).
Oxendine has 45-60 days to report to federal prison. He requested to be sent to the minimum security prison camp at FPC Pensacola in Florida, though it is not yet clear if he will indeed be assigned there.
The DOJ previously described Oxendine conspiring with a Texas doctor and others to submit fraudulent claims for unnecessary medical tests.
Physicians at the Texas doctor's private practice were "pressured to order these unnecessary tests" from a lab that, as part of the scheme, agreed to pay Oxendine and the doctor "a kickback of 50 percent of the net profit." Part of the pressure campaign involved a personal presentation by Oxendine at the Ritz Carlton in Buckhead to the doctors from the Texas private practice as part of a "retreat" for the physicians.
The lab ultimately submitted claims for more than $2.5 million, of which insurance companies paid almost $700,000, resulting in a $260,000 kickback to Oxendine and the Texas doctor.
"Some patients were also charged for the tests, receiving bills of up to $18,000," the DOJ said in March.
Oxendine and the Texas doctor then engaged in a coverup of the scheme.
The former insurance commissioner "abused his position as the Georgia Insurance Commissioner by undermining the integrity of the state's healthcare system" with the fraud scheme, Ryan K. Buchanan, the U.S. attorney in Atlanta, said in a statement.
Atlanta FBI Atlanta Special Agent in Charge Keri Farley said Oxendine was "motivated more by personal greed than his duty to patients and the citizens of Georgia, whom he used to represent."
In a sentencing memo, lawyers for the former insurance commissioner made the case that he deserved a more lenient sentence based on his record as insurance commissioner (a position he held before the kickback scheme took place) and how he "helped more people recover more money than any previous commissioner," as well as his family ties as a 62-year-old father and grandfather.
"Mr. Oxendine's conviction in this case clearly indicates that he has not lived a perfect life, and it has weighed on him heavily," the memo stated. "However, we ask this Court to acknowledge that growth is not always linear, and to respectfully consider the entirety of Mr. Oxendine's life when making this sentencing determination."
The government countered, arguing for a more serious sentence because they said Oxendine had wielded his experience as an attorney and his authority as a former state official -- who at one time was seen as a favorite in the 2010 Republican primary for governor -- to make the scheme work.
"He held state-wide office, elected office. He was a viable candidate for governor. He was an attorney with an established insurance consulting business. He had the world at his fingertips," the government's memo said. "And instead of using these advantages to advance legally and legitimately, he used them to concoct and conduct health care fraud."
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