BUFFALO, N.Y. (WIVB) — Tonawanda-based physician Dr. William Stephan has pleaded guilty for his involvement in a prescription fraud scheme that led to more than $8 million in fraudulent healthcare reimbursements, according to the U.S. Attorney’s Office.
Stephan, 65, who operated a family medical practice, was convicted of misprision of felony. He received a sentence of one year probation and must complete 100 hours of community service.
The scheme began in April 2015 when Stephan was approached by Erik Berg, who requested him to sign off on prescriptions for compounded medications. Over several months, Stephan signed prescriptions for 19 individuals—none of whom were his patients.
Authorities revealed that the prescriptions were already completed, including the number of refills, when presented to Stephan. Despite this, Stephan signed them based solely on Berg’s claim that the patients required the medications. He allegedly failed to note the refill authorizations, leading to the prescriptions being filled over 500 times.
Each prescription averaged more than $16,000 in reimbursements. In total, health care benefit programs paid $8,750,315 for the prescriptions signed by Stephan.
Federal officials noted that the pharmacy benefit managers would have rejected the claims had they known the prescriptions were pre-filled, medically unnecessary, or issued without proper doctor-patient relationships.
In addition, Stephan signed compounded prescriptions for two other individuals—Scott Trapp and Michael Luehrsen. Berg and Luehrsen have also been convicted and are awaiting sentencing, while Trapp has already been sentenced.
Stephan’s guilty plea follows a broader crackdown on healthcare fraud, including a recent federal takedown involving $14.6 billion in fraudulent claims nationwide. The case adds to a growing number of Medicaid and prescription-related fraud incidents in the Buffalo area.
