Feds Roundup Alleged Biker Gang Members, Add More Charges Against Levittown Doctor

A doctor who operated an office in Bristol Township has been charged in connection with the death of one of his patients, federal prosecutors said Thursday.

An unsealed superseding indictment charges Dr. William J. O’Brien III, 49, with causing the death of patient through illegal distribution of a controlled substance and 95 additional counts of distribution of controlled substances – oxycodone, methadone, and amphetamines. The charges come on top of charges filed against the doctor earlier this year.

In addition to to the new indictment, eight others were charged Thursday with conspiracy. The eight others charged are: Michael Thompson, 49, Peter Marrandino, 48, Joseph Mehl, 48, Patrick Treacy, 47, Charles Johnson, 46, Frank Corazo, Jr., 52, Jennifer Lynn Chambers, 21, all of Philadelphia, and Joseph Mitchell, Sr., 39, of West Deptford, NJ, some of whom are members of the Pagans Motorcycle Club. Thompson and Corazo were also charged with health care fraud for allegedly using Medicaid health insurance to pay for the medically unnecessary controlled substances prescribed by O’Brien

Additionally, O’Brien’s ex-wife, Elizabeth Hibbs, 54, was charged with with money laundering, bankruptcy fraud, and making false statements under oath in a bankruptcy proceeding.

Federal agents rounded up six of the alleged coconspirators Thursday morning.

Authorities alleged that between March 2012 and January 2015, O’Brien, a doctor of osteopathic medicine, dispensed roughly 378,914 pills which contained 10 mg, 15 mg or 30 mg of oxycodone and approximately 160,492 methadone pills to his coconspirators. The street value of the drugs was roughly $5 million, according to officials from the U.S. Attorney’s Office.

As part of the criminal activity, O’Brien reportedly made more than $2 million for himself.

Authorities alleged that O’Brien sold scripts for thousands of drugs to an informant and an undercover FBI agent during the course of the investigation.

In charging documents, federal law enforcement officials did not identify the person who died due to O’Brien’s alleged conspiracy.

O’Brien operated an office at 49 Rolling Lane in Bristol Township’s Levittown section and on Bustleton Avenue in Philadelphia.

 From federal authorities:

The Conspiracy

According to the indictment, defendants Thompson, Marrandino, Mehl, Mitchell, and Treacy were members or associates of the Pagans and conspired with O’Brien to distribute large quantities of dangerous and addictive controlled substances for profit.  Through their connection to the Pagans, the defendants had access to illegal drug distributors.  O’Brien and the defendants allegedly developed a scheme whereby so-called “patients,” who were recruited by the defendants, would typically pay O’Brien a $200 cash “co-pay” in exchange for medically unnecessary prescriptions for controlled substances.  With cash-paying “patients,” O’Brien could conceal money from creditors and the United States Bankruptcy Court where he had filed for Chapter 11 protection for his company WJO, Inc., a group of medical practices which he owned.  The indictment further alleges that after filling the prescriptions they got from O’Brien, the “patients” would turn the pills over to the defendants who would sell the pills to drug dealers.  Certain controlled substances, such as oxycodone (30 mg), were in high demand.

Distribution of Controlled Substances Resulting in Death

According to the indictment, in addition to medically unnecessary controlled substances, O’Brien prescribed other drugs for “patients” to create the appearance that he was operating a legitimate medical practice.  Among the other drugs he prescribed was cyclobenzaprine, a muscle relaxant also known as Flexeril.  The indictment alleges that on or about December 17, 2013, in Levittown, O’Brien intentionally distributed, for no legitimate medical purpose, oxycodone, methadone, and cyclobenzaprine, to Person #21, and the death of Person #21 resulted from the combined use of these substances.

Health Care Fraud

Defendants Michael Thompson and Frank Corazo, Jr., were each Medicaid beneficiaries. According to the indictment, Thompson and Corazo each used Keystone First benefits to pay for medically unnecessary prescriptions for oxycodone pills that they obtained from William J. O’Brien III for the purpose of resale to drug dealers.  It is further alleged that Thompson and Corazo falsely represented to Keystone First that the prescriptions were medically necessary.

Money Laundering and Bankruptcy Fraud

Defendants O’Brien and Hibbs were also charged with conspiring to launder the proceeds of O’Brien’s drug distribution operation, and conspiring to commit fraud on the United States Bankruptcy Court by hiding income, including income from O’Brien’s drug distribution operation.  On or about November 15, 2010, O’Brien filed for bankruptcy protection for WJO, Inc.  Defendant Hibbs, who was married to O’Brien when the bankruptcy petition was filed, was, at various times, the Chief Operating Officer and the Chief Executive Officer for WJO, Inc.  The indictment charges that on or about July 10, 2012, O’Brien and Hibbs were fired from WJO, Inc., by the Trustee appointed by the United States Bankruptcy Court.  O’Brien and Hibbs legally divorced in October of 2012 but continued to reside and work together and continued to act as husband and wife.  The indictment charges that O’Brien and Hibbs diverted assets from WJO, Inc. to their personal accounts and to accounts controlled by them.  In addition, it is alleged that O’Brien and Hibbs concealed other assets from the Trustee and from creditors of WJO, Inc.  Both were also charged with knowingly making a false statement under oath during the bankruptcy proceedings.

In the 88-age indictment obtained by LevittownNow.com, federal authorities said Mitchell complained about having to find legitimate employment after being “discharged” from obtaining pills from O’Brien. He allegedly told a friend, “workin’ every day … is for the  birds … ain’t for Pagans.”

The indictment also lays out how O’Brien allegedly made $20,000 per week in unrecorded cash proceeds. The doctor also reportedly had a staff member shred “cash slips” each day after he had completed his reconciliation of cash receipts.

Federal investigators noted that during bankruptcy hearings, O’Brien allegedly stated he was living at his Levittown office, or sometimes with an unidentified cousin, because he was broke and homeless. Court documents say the doctor and his ex-wife, who he continued a relationship with after their divorce, rented a luxury condominium in Philadelphia and resided in Beach Haven, New Jersey. O’Brien’s lifestyle was described as “lavish” and reportedly included Caribbean vacations, designer clothing and fine dining.

During the course of the investigation, authorities seized $58,800 in cash kept in a safety deposit box in Philadelphia, $58,050 in cash kept in a safety deposit box at a Newtown bank and a diamond kept in another deposit box, according to court documents.

O’Brien was part of a group of about 100 doctors who offered to purchase Lower Bucks County Hospital for $20 million several years back, according to an article from the Philadelphia Business Journal.

O’Brien’s former employee, Angela Rongione, 29, was charged in connection with the case earlier this year.

If convicted of all charges, O’Brien faces a mandatory minimum sentence of 20 years in prison and a maximum sentence of life.  The remaining defendants face substantial prison terms and fines, and are subject to criminal forfeiture proceedings.

Editor’s Note: All individuals arrested or charged with a crime are presumed innocent until proven guilty. The story was compiled using information from police and public court documents.