Ex-Ga. insurance commissioner indicted on health care fraud charges

A federal grand jury has indicted former Georgia Insurance Commissioner John Oxendine on charges of health care fraud and money laundering. John Spink jspink@ajc.com

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A federal grand jury has indicted former Georgia Insurance Commissioner John Oxendine on charges of health care fraud and money laundering. John Spink jspink@ajc.com

Former Georgia Insurance Commissioner John Oxendine has been indicted by a federal grand jury on charges of health care fraud and money laundering, prosecutors announced Friday.

The conduct alleged in the indictment occurred after Oxendine’s 16-year tenure as insurance and safety fire commissioner ended.

Prosecutors said Oxendine conspired with Jeffrey Gallups, an Alpharetta-based ear, nose and throat doctor, and others to submit fraudulent insurance claims for medically unnecessary lab tests. As part of the scheme, a Texas-based lab company paid Oxendine and Gallups hundreds of thousands of dollars in kickbacks, which were laundered through Oxendine’s insurance services business, the indictment alleges.

The indictment also alleges that Oxendine helped pressure doctors in Gallups’ practice. Prosecutors said that during a September 2015 meeting at the Ritz-Carlton in Buckhead, Oxendine urged the physicians to order the toxicology and genetic tests.

All total, the tests from Gallups’ practice translated into $2.5 million in claims submitted to Aetna, Blue Cross Blue Shield, United Health Care and other insurance providers.

The indictment says insurers paid more than $600,000 for the claims, and the lab company then paid $260,000 in kickbacks through Oxendine’s business. Oxendine kept some of the kickback money and followed Gallups’ instructions on where to funnel the doctor’s share, the indictment says. Records show he made a $150,000 charitable contribution on Gallups’ behalf and paid $70,000 in his attorney’s fees.

Gallups has pleaded guilty to health care fraud in a related case, according to the U.S. Attorney’s Office for the Northern District of Georgia.

“These allegations describe someone who was more motivated by personal greed than their duty to provide appropriate and necessary care to patients,” said Keri Farley, the FBI special agent in charge in Atlanta.

But Oxendine’s lawyer, Drew Findling, said Friday that authorities targeted his client “because of his name and gravitas.”

“But to be clear, he has not broken any laws and is innocent of this indictment,” Findling said.

Oxendine is free on a $100,000 signature bond.

In 2018, The Atlanta Journal-Constitution reported on a civil lawsuit related to the lab test scheme. The suit is still pending.

Oxendine served four terms as the state’s insurance commissioner before launching an unsuccessful campaign for the Republican nomination for governor in 2010.

He has been dogged by ethics troubles for years. Earlier this month, Oxendine settled what was the last of a series of state ethics commission complaints dating to 2009, when he was considered the front-runner in the Republican race for governor before losing in the primary.

The commission settled the last of the cases in exchange for about $128,000 in donor money — what was left over in his gubernatorial campaign account after paying lawyers for years to fight the charges.

Oxendine, who was accused of illegally using campaign donations for a down payment on a home, fancy cars and child care expenses, settled the case without the state making any finding in the case. Essentially, he agreed to give the state the leftover campaign money and the state decided it didn’t want to keep fighting him.

He is the second Republican to serve as insurance commissioner to face law enforcement trouble in recent years. Jim Beck is serving seven years and three months behind bars after being convicted in 2021 of swindling money from his former employer to help fund his successful 2018 campaign for the office.

Staff writer J. Scott Trubey contributed to this article.