Former Georgia insurance commissioner and gubernatorial candidate John Oxendine is due to stand trial in April on federal charges of conspiracy to commit health care fraud and money laundering.
A federal judge has rejected Oxendine’s attempt to dismiss the criminal charges and set an April 15 trial date.
Oxendine served as insurance commissioner for 16 years before launching an unsuccessful campaign for the Republican nomination for governor in 2010. He was indicted in May 2022 and pleaded not guilty to single counts of conspiracy to commit health care fraud and conspiracy to commit money laundering.
Oxendine remains free on a $100,000 signature bond. His lawyers and the prosecutors in the case are due to discuss trial details in a March 28 hearing. Oxendine’s attorneys did not immediately respond Monday to questions about the case.
Prosecutors allege that Oxendine helped an Alpharetta doctor defraud health care insurance providers and received tens of thousands of dollars in kickbacks. They said the arrangement between 2015 and 2017 involved fraudulent insurance claims for medically unnecessary genetic and toxicology testing by Texas lab company Next Health.
Physician Jeffrey Gallups, who owned a chain of Atlanta-area medical clinics, was sentenced in June 2022 to three years in prison for ordering doctors who worked at his Ear, Nose & Throat Institute clinics to require unnecessary lab tests for patients. Gallups had a secret arrangement with Next Health to split the money generated by the tests, prosecutors said.
Oxendine is accused of being a middleman by receiving through his now-defunct business International Medical Research the hundreds of thousands of dollars in kickbacks that the lab company paid Gallups. Oxendine kept more than $40,000 and used the rest to pay the doctor’s debts and charitable donations, prosecutors allege.
Gallups, who pleaded guilty to submitting fraudulent insurance claims, was ordered to pay more than $700,000 in restitution and fined $25,000. In a separate civil case, Gallups and his company, Milton Hall Surgical Associates, agreed to pay about $3 million to settle a federal whistleblower lawsuit alleging the scheme bilked government health care programs.
Prosecutors said Oxendine pressured doctors in Gallups’ clinics to order the lab tests during a speech at a Buckhead hotel in September 2015. They said Next Health submitted claims for more than $2.5 million in payment for tests ordered by Gallups’ practice, and that it received more than $600,000 from insurance companies as a result.
Next Health was embroiled in a massive civil fraud lawsuit filed by UnitedHealthcare in a Texas federal court. In that case, Next Health and associates were ordered to pay more than $218 million in June 2023.
Oxendine, who denies the allegations, also faced accusations of campaign finance mismanagement. In May 2022, Georgia’s ethics commission settled the last of its cases against Oxendine in exchange for about $128,000 in donor money.
Oxendine is the second former insurance commissioner to face criminal charges in federal court in recent years.
Jim Beck is serving more than seven years behind bars after being convicted in 2021 of embezzling more than $2 million from the Georgia Underwriting Association, his former employer. Prosecutors said the money helped finance Beck’s successful campaign for office in 2018. Beck’s attempt to overturn his conviction was rejected in August 2023 by the federal appeals court in Atlanta.
