Feds: Levittown Pill Mill Doctor Now Facing Fraud Charges

A Levittown doctor already charged with running a pill mill that led to the death of a patient and making $2 million in profit is now facing additional charges from federal law enforcement.

Dr. William J. O’Brien III, 50, of Philadelphia, was charged with conspiring to defraud the Food and Drug Administration (FDA) and a separate conspiracy to commit health care fraud, according to indictment unsealed by the U.S. Attorney’s Office on Wednesday.

O’Brien, who practiced osteopathic medicine, operated an office at 49 Rolling Lane in Bristol Township’s Levittown section and another on Bustleton Avenue in Philadelphia. The offices were shut down after the multi-agency investigation led to the arrest of O’Brien earlier this year.

The indictment alleges that O’Brien and others, who were not named, had made misrepresentations to the FDA in order to obtain clearance for a so-called hyperbaric chamber that O’Brien marketed under the name Hyperox 101.

From federal authorities:

A hyperbaric chamber is a sophisticated medical device in which patients breathe 100% pure oxygen for a prolonged period in a pressurized environment.  To achieve a therapeutic effect, the chamber is pressurized to at least 1.4 atmospheres below sea level.  The pressure creates a biochemical reaction that increases oxygen absorption into the blood.  A hyperbaric chamber for treating patients must be constructed using pedigree steel and certified as a pressure vessel for human occupancy.

According to the indictment, Hyperox 101 as constructed did not meet these standards; rather, it was built by welding together pieces of a used propane tank.  The indictment charges that defendant O’Brien knew of the deficiencies in Hyperox 101, but passed it off as a medical device by submitting false documentation to the FDA.  The indictment alleges that, due to its substandard construction, Hyperox 101 did not provide patients with the therapeutic benefits associated with hyperbaric oxygen treatment, but instead posed potential risks to patients.

The indictment charges that defendant O’Brien used the unapproved device to defraud Medicare and other health benefit programs.  From in or around March 2007 through in or around August 2011, O’Brien obtained millions of dollars based on fraudulent claims that he caused to be submitted to Medicare and IBC, among other health care benefit programs.  O’Brien caused fraudulent claims to be submitted of approximately $15 million for medically unnecessary and potentially unsafe treatments.  O’Brien obtained reimbursement from Medicare and other insurers of approximately at least $4.2 million based on the fraudulent claims.

The investigation into O’Brien became public in 2011 when members of the FBI raided a Middletown office containing the hyperbaric chamber. A 2011 report from the Burlington County Times details the raid and how the 10-person hyperbaric chamber was confiscated along with documents.

O’Brien, who is in federal custody, his ex-wife, a former employee and eight others are charged in connection with the federal investigation. Some of those charged were known associates of the Pagans Motorcycle Club.

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.

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

Federal investigators previously 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 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.

If conviced in the various federal cases O’Brien has pending, he could face a maximum sentence of life behind bars and criminal forfeiture proceedings.

The latest indictment was filed after an investigation by the FBI, FDA Office of Criminal Investigations and the Department of Health and Human Services.

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.