Methadone clinic operator gets prison for health care fraud

A defense attorney and a courtroom full of supporters depicted a woman who ran a methadone clinic for 20 years as a cross between a den mother and an angel of mercy to southwestern Pennsylvania's growing population of opioid addicts, but a federal prosecutor countered that she was a "greedy" businesswoman who defrauded Medicaid to feed a gambling habit.

U.S. District Judge Nora Barry Fischer opted for the middle ground Thursday.

The judge sentenced Rosalind Sugarmann, 62, to a year and a day in federal prison for her December guilty plea to health care fraud and illegally distributing the drug Suboxone, which can be used to wean addicts off heroin. In doing so, the judge rejected Assistant U.S. Attorney Shaun Sweeney's request for at least 2 1/2 years in prison and defense attorney Efrem Grail's arguments for probation.

Pittsburgh psychologist Thomas Petrone, who specializes in addiction, was called as a character witness by the defense.

"I think Ros is a game changer," Petrone testified. "I think she was a mom to hundreds of people."

Sweeney painted a different picture, relying on a couple of federal grand jury indictments returned since Sugarmann's Addiction Specialists clinic was raided by federal agents in October 2015.

Sugarmann and Dr. Dominic Dileo have pleaded guilty to unlawfully dispensing Suboxone, which, besides helping heroin addicts, can be abused by addicts to get high. The indictment accused them of illegally supplying the drug on scores of occasions from January 2013 to July 2015.

Dileo, 69, pleaded guilty last July and will be sentenced Aug. 2.

Sugarmann, in her plea last year, acknowledged aiding and abetting Dileo, who gave the Suboxone to her under the alias Larry Greene. In a tearful apology read to the court, Sugarmann claimed she did that to protect the reputation of her clinic's former chief financial officer, whose anonymity she was trying to guard while treating him for drug addiction.

Sweeney argued Sugarmann, of Allison Park, was motivated by "greed," noting she and her husband claimed nearly $1 million in salary on their 2013 tax return.

Despite that, Sugarmann's husband has twice filed for personal bankruptcy and Sugarmann once in recent years. Both also have tax liabilities and "substantial gambling losses" from 2009 to 2013, including more than $2 million in one year, Sweeney told the judge.

Sugarmann's decision to hire Dileo showed her motives weren't pure, Sweeney said.

Dileo was sentenced to 10 years in prison for Medicare fraud in the 1990s and lost his medical license, which was reinstated in 2005. In that case, Dileo was convicted of writing illegal painkiller prescriptions and taking kickbacks that he spent on extramarital affairs. He also faked medical tests so he could claim patients needed oxygen, which he sold through a medical supply company he co-owned by submitting fraudulent bills to insurers.

"Who hires such a doctor to be the medical director of an addiction treatment clinic?" Sweeney said.

Sugarmann must pay $400,000 in restitution and serve three years of probation after prison.


This story has been corrected by removing a reference to the clinic's former chief financial officer pleading guilty in the case; that man was never indicted and did not plead guilty.