Attor­ney Gen­er­al Ken Paxton’s Med­ic­aid Fraud Con­trol Unit Plays Key Role in Largest Ever Crim­i­nal Enforce­ment Action Tar­get­ing Opi­oid Distributors

HOUSTON – Attorney General Ken Paxton’s Medicaid Fraud Control Unit played a pivotal role in an investigation leading to the successful federal prosecution of nine pharmaceutical distributor executives, sales representatives, and brokers involved in the unlawful distribution of nearly 70 million opioid pills and over 30 million doses of commonly abused prescription drugs. The drugs, valued at over $1.3 billion on the black market, were sold to Houston-area pill-mill pharmacies, contributing significantly to the deadly national opioid crisis.

The defendants, including five pharmaceutical distributor executives and five pharmaceutical sales representatives and brokers, allegedly orchestrated the sale of high-potency opioid pills, including oxycodone, hydrocodone, and hydromorphone, to pill-mill pharmacies in and around Houston. These pills were often sold at inflated prices, with distributors providing prescription drug potentiators like alprazolam, carisoprodol, and promethazine to enhance the effects of the opioids. The distributors implemented sham compliance measures to evade detection by the DEA and other regulatory authorities. Nine of the ten defendants have now pled guilty and await sentencing.

The Medicaid Fraud Control Unit’s investigation was led by Sergeant Mike Price, Captain Stacey Overbay, and Investigative Auditor Kalpana Patel, in a multi-agency effort with the DEA, HHS-OIG, FBI, USPS-OIG, and FDA-OCI. Assistant Attorney General Abdul Farukhi of Paxton’s office played a critical role in the case’s prosecution.

“This landmark case demonstrates our tenacity and resolve in the fight against prescription drug rings that have worsened the deadly opioid crisis facing our country,” said Attorney General Paxton. “My office will continue to pursue those who exploit our health care system for profit and destroy Texas families with dangerous, addictive drugs.”

Since 2021, the MFCU has recovered more than $612 million in settlements, judgments, and restitution for Texas taxpayers. The MFCU receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $20,944,200 for fiscal year 2023. The remaining 25 percent, totaling $6,981,395, is funded by the State of Texas. For every dollar of state funding, the OAG’s MFCU has recovered more than 49 dollars for taxpayers over the last 3 years.