. Case Document 1 Filed 02/07/19 Page 1 of 16 PageID 1 7H ORIGINAL ?3 I I .- MATTHEW G. WHITAKER Acting Attorney General ROBERT s. BREWER, JR. United States Attorney Ell-E12 P, MICHAEL G. WHEAT, CBN 118598 5,313,231: Egg; ERIC J. BESTE, CBN 226089 ?f ,0 JANAKI s. GANDHI, CBN 272246 '3 7-9? as COLIN M. MCDONALD, CBN 286561 ,2 Special Attorneys of the United States CLERK 880 Front Street, Room 6293 San Diego, CA 92101 Tel: Email: michael.wheat@usdoj . gov UNITED STATES DISTRICT COURT DISTRICT OF HAWAII CaseNo.CR19 00015 JMS INDICTMENT UNITED STATES OF AMERICA, Plaintiff, Title 21, U.S.C., Secs. 841(a)(1), 846 v. Conspiracy to Distribute and Dispense Controlled Substances; Title 18, U.S.C., Sec. 4 RUDOLPH B. PUANA (1), Misprision Of Felony; Title 21, U.S.C., Sec. KATHERINE P. KEALOI-IA (2), 841(a) Distributing and Dispensing Controlled Substances; Title 18, U.S.C., Sec. Defendants. 1347 Health Care Fraud; Title 18, U.S.C. Secs. 922(g)(3) and 924(a)(2) Addict In Possession Of A Firearm; Title 18, U.S.C., Sec. 853 Forfeiture. INTRODUCTORY ALLEGATIONS 1. Defendant RUDOLPH B. PUANA, of Waimea, Hawaii, was a double- board certi?ed anesthesiologist and pain doctor licensed to practice medicine in the Case Document 1 Filed 02/07/19 Page 2 of 16 PageID 2 State of Hawaii, and a director at large of the American Society of Interventional Pain Physicians, Hawaii Board. PUANA attended medical school at the Creighton University School of Medicine, and served on the staff of hospitals in Texas and Hawaii. PUANA was registered with the Drug Enforcement Administration as a physician authorized to write prescriptions for controlled substances. Between approximately 2010 and 2018, PUANA was an owner and operator of pain management clinics located at various times on the islands of Hawaii, Oahu, and Maui (collectively known as ?the Clinic?). 2. KATHERINE P. KEALOHA of Honolulu, Oahu, was sister, and a licensed attorney in the State of Hawaii. At all times relevant, KEALOHA served as a Deputy Prosecuting Attorney for the City and County of Honolulu. 3. Co-conspirator 1 of Honolulu, Oahu, met PUANA and KEALOHA when the three attended high school together. At all times relevant, maintained a social relationship with both PUANA and KEALOHA, and a business relationship with PUANA. 4. Co-conspirator 2 was at all times relevant a resident of Waimea, Hawaii, and maintained a social relationship with PUANA and 5. Co-conspirator 3 was at all times relevant a resident of Waimea, Hawaii, and maintained a social relationship with PUANA and a familial relationship with . Case Document 1 Filed 02/07/19 Page 3 of 16 PageID 3 6. At various points in time and KEALOHA were listed as patients of PUANA at the Clinic. The generally accepted standard of medical practice required PUANA to write controlled substance preseliptions for his patients only when the controlled substances were to be used for legitimate medical purposes. 7. Co-Conspirator 4 was at all times relevant a resident of Honolulu, Hawaii, a social friend of KEALOHA, and PUANA, and a distributor of a variety of controlled substances. COUNT 1 CONSPIRACY TO DISTRIBUTE AND DISPENSE CONTROLLED SUBSTANCES 21 U.S.C. 841(a)(1) and 846 8. The grand jury realleges and incorporates by reference Introductory Allegations 1 through 7. 9. Beginning on a date unknown, but no later than 2012, and continuing up to 2018, in the District of Hawaii and elsewhere, Defendants RUDOLPH B. PUANA and KATHERINE P. KEALOHA, and knowingly and intentionally conspired and agreed together and with each other, and with others known and unknown, to commit the following offenses against the United States: a. to knowingly and intentionally distribute and dispense a mixture and substance containing a detectable amount of oxycodone, a Schedule II 3 1 Case Document 1 Filed 02/07/19 Page 4 of 16 PageID 4 controlled substance, outside the scope of professional practice and not for a legitimate medical purpose, in violation of Title 21, United States Code, Section 841(a)(1); . b. to knowingly and intentionally distribute and dispense a mixture and substance containing a detectable amount of fentanyl, a Schedule II controlled substance, outside the scope of professional practice and not for a legitimate medical purpose, in violation of Title 21, United States Code, Section 841(a)(1); c. to knowingly and intentionally distribute and dispense a mixture and substance containing a detectable amount of alprazolam (Xanax), a Schedule IV controlled substance, outside the scope of professional practice and not for a legitimate medical purpose, in violation of Title 21, United States Code, Section 841(a)(1); and 10. It was part of the conspiracy that PUANA would write prescriptions so that KEALOHA, and others could obtain controlled substances, such as oxycodone, that were prescribed outside the scope of professional practice and not for a legitimate medical purpose. 11. It was further part of the conspiracy that PUANA would cause the medically unnecessary prescriptions to be delivered to . Case Document 1 Filed 02/07/19 Page 5 of 16 PageID 5 KEALOHA, and others, at the Clinic and at other locations on the islands of Hawaii and Oahu. 12. It was further part of the conspiracy that PUANA would instruct co- conspirators on how to ?ll the unnecessary prescriptions so as not to arouse suspicion. 13. It was ?irther part of the conspiracy that PUANA would advise to sell some of the controlled substances that PUANA had improperly dispensed, and to use the proceeds to pay for personal expenses and to purchase cocaine for and PUANA. 14. It was part of the conspiracy that PUANA would advise and to sell some of the controlled substances that PUANA had improperly dispensed, and to use the proceeds to pay for personal expenses. 15. It was ?u'ther part of the conspiracy that PUANA would travel from Hawaii to Oahu with controlled substances that he had improperly taken from the Clinic, including oxycodone, fentanyl, and alprazolam (Xanax), and distribute these controlled substances to and others. 16. It was further part of the conspiracy that PUANA and would attempt to sell and barter the oxycodone, fentanyl, and alprazolam, in exchange for cocaine. Case Document 1 Filed 02/07/19 Page 6 of 16 PageID 6 17. It was further part of the conspiracy that KEALOHA would distribute to Individual A in Hawaii, and to Individual in. New York, controlled substances improperly dispensed to her by PUANA. 18. It was further part of the conspiracy that when the distribution by PUANA and was discovered by a'police of?cer, KEALOHA would attempt to control the ensuing investigation to ensure that PUANA and were not prosecuted and PUANA could continue prescribing controlled substances. All in violation of Title 21, United States Code, Sections 841(a)( 1) and 846. COUNT 2 MISPRISION OF FELONY 18 U.S.C. 4 19. The Grand Jury realleges and incorporates by reference Introductory Allegations about July 2015, a Honolulu Police Department detective assigned to the Criminal Intelligence Unit noti?ed Defendant KATHERINE P. KEALOHA that her brother RUDOLPH B. PUANA and were purchasing and using cocaine provided by and Individual C. Soon thereafter, KEALOHA arranged to have herself assigned as the prosecutor leading an HPD investigation of drug distribution by and Individual C.. 21. Beginning in or about July 2015, and continuing through the date of this Indictment, in the District of Hawaii, Defendant KATHERINE P. KEALOHA, 6 Case Document 1 Filed 02/07/19 Page 7 of 16 PageID 7 having knowledge of the actual commission of a felony cognizable by a court of the United States to wit, the distribution of controlled substances by RUDOLPH B. PUANA, a felony prosecutable under Title 21, United States Code, Section 841(a)(1) did conceal the same, and did not as soon as possible make known the same to some judge or other person in civil or military authority under the United States. 22. Defendant KATHERINE P. KEALOHA undertook the following af?rmative acts, and others, to conceal the felony committed by PUANA: a. permitting herself to be assigned as the prosecutor to investigate and Individual C?s drug distribution, thereby enabling her to steer law enforcement scrutiny away from her brother?s felonious conduct in that drug conspiracy; b. drafting and approving an af?davit in support of a search warrant for residence that failed to accurately describe PUANA and ?s involvement in the drug conspiracy involving c. concealing from HPD detectives working on the case that her brother was involved in the conspiracy to distribute narcotics with d. preventing HPD detectives from questioning and Individual about the source of controlled substances seized from . Case Document 1 Filed 02/07/19 Page 8 of 16 PageID 8 residence, including the 114 fentanyl transdermal patches provided by e. giving favorable plea offers to and Individual to reduce the likelihood they would reveal that her brother had distributed controlled substances; f. cultivating a close personal relationship with (by, among other things, communicating with using an messaging application), to reduce the likelihood that would reveal brother?s role in the drug distribution conspiracy; and g. concealing from fellow deputy prosecuting attorneys with the Department of the Prosecuting Attorney for the City and County of Honolulu that PUANA, her brother, was source of supply for the prescription drugs was distributing. All in violation of Title 18, United States Code, Section 4. COUNTS 3-38 DISTRIBUTING AND DISPENSING OXYCODONE 21 U.S.C. 841(a)(1) 23. The Grand Jury realleges and incorporates by reference Introductory Allegations l, and 3 through 6. 24. On or about the dates set forth below, in the District of Hawaii, Defendant RUDOLPH B. PUAN A, knowingly and intentionally distributed and Case Documentl Filed 02/07/19 Page90f 16 PageID 9 dispensed a mixture and substance containing a detectable amount of oxycodone, a Schedule controlled substance, outside the scope of professional practice and not for a legitimate medical purpose: Count Date Substance Quantity Recipient 3 5/22/2015 OXYCODONE HCL 30 MG 120 4 6/22/2015 OXYCODONE HCL 30 MG 150 5 7/22/2015 OXYCODONE HCL 30 MG 150 6 8/22/2015 OXYCODONE HCL 30 MG 150 7 9/18/2015 OXYCODONE HCL 30 MG 150 8 10/19/2015 OXYCODONE HCL 30 MG 150 9 11/18/2015 OXYCODONE HCL 30 MG 150 10 12/21/2015 OXYCODONE HCL 30 MG 150 11 1/22/2016 OXYCODONE HCL 30 MG 150 12 3/1/2016 OXYCODONE HCL 30 MG 150 13 3/24/2016 OXYCODONE HCL 30 MG 150 14 4/25/2016 OXYCODONE HCL 30 MG 120 15 5/26/2016 OXYCODONE HCL 30 MG 150 16 8/8/2016 OXYCODONE HCL 30 MG 120 17 9/23/2016 OXYCODONE HCL 30 MG 120 18 10/21/2016 OXYCODONE HCL 30 MG 120 19 11/28/2016 OXYCODONE HCL 30 MG 120 20 1/9/2017 OXYCODONE HCL 30 MG 120 21 3/6/2017 OXYCODONE HCL 30 MG 120 22 5/8/2017 OXYCODONE HCL 30 MG 120 23 8/29/2017 OXYCODONE HCL 30 MG 120 24 10/31/2017 OXYCODONE HCL 30 MG 100 25 4/7/2014 OXYCODONE HCL 30 MG 150 26 5/1/2014 OXYCODONE HCL 30 MG 150 27 9/2/2014 OXYCODONE HCL 30 MG 150 28 10/3/2014 OXYCODONE HCL 30 MG 150 29 11/3/2014 OXYCODONE HCL 30 MG 150 30 12/2/2014 OXYCODONE HCL 30 MG 150 31 2/3/2015 OXYCODONE HCL 30 MG 150 32 3/2/2015 OXYCODONE HCL 30 MG 150 33 4/7/2015 OXYCODONE HCL 30 MG 150 9 Case Document 1 Filed 02/07/19 Page 10 of 16 PageID 10 Count Date Substance Quantity Recipient 34 5/4/2015 OXYCODONE HCL 30 MG 150 35 6/9/2015 OXYCODONE HCL 30 MG 150 36 7/6/2015 OXYCODONE HCL 30 MG 150 37 8/4/2015 OXYCODONE HCL 30 MG 150 38 9/3/2015 OXYCODONE HCL 30 MG 150 All in violation of Title 21, United States Code, Section 841(a)(l). COUNT 39 DISTRIBUTING AND DISPENSING OF FENTANYL 21 U.S.C. 841(a)(1) 25. The grand jury realleges and incorporates by reference Introductory Allegations about August 5, 2015, in the District of Hawaii, Defendant RUDOLPH B. PUANA. M.D., knowingly and intentionally distributed and dispensed a mixture and substance to wit, approximately 114 transdermal patches containing a detectable amount of fentanyl, a Schedule II controlled substance, outside the scope of professional practice and not for a legitimate medical purpose. All in violation of Title 21, United States Code, Section 841(a)(l). COUNTS 40-53 HEALTH CARE FRAUD 18 U.S.C. 1347 and 2 27. The Grand Jury realleges and incorporates by reference Introductory Allegations 1, 4, 5, and 6. 10 Case Document 1 Filed 02/07/19 Page 11 of 16 PageID 11 28. Medicaid, a health care bene?t program under Title 18, United States Code, Section 24(b), is a joint Federal-State program that pays for medical assistance for individuals and families with low incomes and relatively few assets. The State of Hawaii participates in the Medicaid program, and the United States provides funds to Hawaii through the Medicaid program. 29. At all times relevant, Hawaii?s Medicaid program provided an outpatient prescription drug bene?t, such that eligible bene?ciaries could obtain drugs that were prescribed for a legitimate medical purpose at little or no cost. Pharmacies that provided prescribed drugs to Medicaid bene?ciaries would then be reimbursed by Hawaii?s Medicaid program. 30. At all times relevant, Defendant RUDOLPH B. PUANA, was enrolled as a participating provider in the Hawaii Medicaid program, and was obligated to only prescribe drugs within the course of his professional medical practice and for a legitimate medical purpose. 31. Beginning in or about 2014, and continuing through in or about September 2015, Defendant RUDOLPH B. PUANA, and knowingly and willfully devised with the intent to defraud a material scheme to defraud Hawaii?s Medicaid program, and to obtain money and property owned by and under the custody and control of Hawaii?s Medicaid program by means of materially false and fraudulent pretenses, representations and promises. ll Case Document 1 Filed 02/07/19 Page 12 of 16 PageID 12 32. It was part of the scheme that PUANA would give and prescriptions for the controlled substance oxycodone, knowing that and would not use the drug for a legitimate medical purpose. 33. It was further part of the scheme that would ?ll the oxycodone prescriptions at pharmacies on the island of Hawaii using Medicaid bene?ts, causing false and fraudulent claims for reimbursement to be submitted to Medicaid. 34. It was ?irther part of the scheme that would sell the controlled substances fraudulently prescribed by PUANA, and use the proceeds to pay for and personal expenses. 35. On or about the dates set forth below, in the District of Hawaii, Defendant RUDOLPH B. PUANA, knowingly and willfully executed the above- described scheme, in connection with the delivery of and payment for health care bene?ts and items: Count Date . Act in execution 40 4/7/2014 Obtaining 150 tablets of OXYCODONE HCL 30 MG 41 5/1/2014 Obtaining 150 tablets of OXYCODONE HCL 30 MG 42 9/2/2014 Obtaining 150 tablets of OXYCODONE HCL 30 MG 43 10/3/2014 Obtaining 150 tablets of OXYCODONE HCL 30 MG 44 11/3/2014 Obtaining 150 tablets of OXYCODONE HCL 30 MG 45 12/2/2014 Obtaining 150 tablets of OXYCODONE HCL 30 MG 46 2/3/2015 Obtaining 150 tablets of OXYCODONE HCL 30 MG 47 3/2/2015 Obtaining 150 tablets of OXYCODONE HCL 30 MG 48 4/7/2015 Obtaining 150 tablets of OXYCODONE HCL 30 MG 49 5/4/2015 Obtaining 150 tablets of OXYCODONE HCL 30 MG 50 6/9/2015 Obtaining 150 tablets of OXYCODONE HCL 30 MG 12 Case Document 1 Filed 02/07/19 Page 13 of 16 PageID 13 Count Date Act in execution 51 7/6/2015 Obtaining 150 tablets of OXYCODONE HCL 30 MG 52 8/4/2015 Obtaining 150 tablets of OXYCODONE HCL 30 MG 53 9/3/2015 Obtaining 150 tablets of OXYCODONE HCL 30 MG A11 in violation of Title 18, United States Code, Sections 1347 and 2. COUNT 54 ADDICT IN POSSESSION OF A FIREARM 18 U.S.C. 922(g)(3) and 924(a)(2) 36. Beginning in or about 2014, and continuing through in or about October 2018, in the District of Hawaii, Defendant RUDOLPH B. PUANA, then being an unlawful user of a controlled substances, and being addicted to controlled substances as de?ned in Title 21, United States Code, Section 802, did knowingly possess in and affecting interstate commerce, a ?rearm and ammunition, that is, a GLOCK 45ACP, Model 21 semi-automatic handgun, serial number KEW 194; Thompson Center Arms, 7mm Venture, long ri?e, serial number TDY 3822; a Taurus International, Tracker, 357MAG revolver, serial number a Savage .338 caliber LAPUA, long ri?e, serial number an American Classic II, .45 caliber semi-automatic handgun, serial number a Bushmaster .223 caliber long ri?e, serial number and a Remington, 870 Express, 206A shotgun, serial number in violation of Title 18, United States Code, Sections 922(g)(3) and 924(a)(2). l3 Case Document 1 Filed 02/07/19 Page 14 of 16 PageID 14 FORFEITURE ALLEGATIONS 37. The allegations contained in Counts 1 and 3 through 39 are realleged and by their reference fully incorporated herein for purposes of alleging forfeiture to the United States of America pursuant to the provisions of Title 21, United States Code, Section 853. 38. As a result of the commission of the felony offenses alleged in Counts 1 and 3 through 39, said violations being punishable by imprisonment for more than one year, upon conviction of one or more of the offenses, Defendants B. PUANA and KATHERINE P. KEALOHA shall forfeit to the United States pursuant to 21 U.S.C. 853, any property constituting, or derived from, proceeds obtained, directly or indirectly, as a result of the violations and any property used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of the violations, including but not limited to a sum of money representing the amount of proceeds obtained as a result of the offenses. 39. The allegations contained in Counts 40 through 53 are realleged and by their reference fully incorporated herein for purposes of alleging forfeiture to the United States of America pursuant to the provisions of Title 18, United States Code, . Section 982(a)(7). 40. Upon conviction of one or more of the offenses alleged in Counts 40 through 53, Defendant RUDOLPH B. PUANA shall, pursuant to Title 18, United 14 Case Document 1 Filed 02/07/19 Page 15 of 16 PageID 15 States Code, Section 982(a)(7), forfeit to the United States all right, title and interest in any property, real and personal, that constitutes or is derived, directly or indirectly, from gross proceeds traceable to the commission of such offenses. If any of the above-described forfeitable property, as a result of any act or omission of the defendants: a. b. cannot be located upon the exercise of due diligence; has been transferred or sold to, or deposited with, a third party; has been placed beyond the jurisdiction of the court; has been substantially diminished in value; or has been commingled with other property which cannot be divided Without dif?culty; it is the intent of the United States, pursuant to 21 U.S.C. 853(p) and 18 U.S.C. 982(b), to seek forfeiture of any other property Of said defendants up to the value of the forfeitable property described above. 15 Case Document 1 Filed 02/07/19 Page 16 of 16 PageID 16 All pursuant to Title 21, United States Code, Section 853 and Title 18, United States Code, Sections 982(a)(7) and 982(b). Dated: February 7, 2019, at Honolulu, Hawaii. A TRUE BILL Foreperson FOREPERSON, GRAND IU RY MATTHEW G. WHITAKER Acting Attorney General ROBERT BREWER, JR. mum AEL G. WHEAT, CBN 118598 EI J. BESTE, CBN 226089 NAKI S. GANDHI, CBN 272246 COLIN M. MCDONALD, CBN 286561 Special Attorneys of the United States 16