Acting United States Attorney Thomas F. Kirwin, Northern District of Florida, announced Wednesday that Dr. Gerardo A. Klug, 65, of Palm Coast, Florida, was convicted following a week-long trial of conspiracy to distribute controlled substances and of conspiracy to commit money laundering.
Dr. Klug was a physician licensed to practice by the State of Florida, and possessed a Drug Enforcement Administration registration number that authorized him to prescribe controlled substances.
He was employed as a prescribing physician between April and August 2005 at “Chronic Pain Management Clinic, LLC.”
Evidence at trial proved that from at least April 1, 2005 through December 31, 2006, the clinic manager, Klug, and two other physicians purported to provide “pain management” treatment for chronic pain patients through the clinic, when, in fact, they did not operate a legitimate medical practice but instead engaged in a conspiracy to unlawfully dispense controlled pain medications including Oxycontin, Dilaudid, Roxicodone, Oxycodone, Lortab, Methadone, and others in exchange for cash office visit fees.
During the same period of time, Klug and his co-defendants engaged in financial transactions designed in whole or in part to promote the carrying on of the conspiracy to unlawfully dispense controlled substances through their deposit into a clinic bank account of patient fees.
Klug is set for sentencing before United States District Judge Casey Rodgers in Pensacola on February 13, 2009.
The controlled substances conspiracy carries a maximum penalty of 20 years imprisonment, a $1,000,000.00 fine, and 5 years of supervised release. The money laundering conspiracy carries a maximum penalty of 20 years imprisonment, a $250,000.00 fine, not greater than twice the gain or twice the gross loss, and 3 years of supervised release. Klug stipulated to the forfeiture of $47, 000.
The indictment was the result of a multi-year Organized Crime Drug Enforcement Task Force (OCDETF) Operation named “Doc-in-a-Box,” investigated by agents of the U.S. Drug Enforcement Administration, Internal Revenue Service Criminal Investigation Division, and Florida Department of Law Enforcement, together with deputies of the Escambia County Sheriff’s Office and the Santa Rosa County Sheriff’s Office.
The case is being prosecuted by Assistant United States Attorney Randall J. (Randy) Hensel and Assistant United States Attorney Edwin F. (Ed) Knight.