25 Key Facts about Federal Drug Diversion Investigations - Healthcare Fraud Defense Firm
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25 Key Facts about Federal Drug Diversion Investigations

Doctor with drugs

Facing a federal drug diversion investigation is an extremely serious matter. If you have received a target letter or subpoena, or if any employee of your business or practice has been contacted by a federal agent, here are 25 key facts you need to know:

1. Combatting Drug Diversion (and Opioid Diversion in Particular) is a Top Federal Law Enforcement Priority.

Since the White House declared the opioid epidemic to be a national public health emergency in 2017, combatting drug diversion has become a top federal law enforcement priority. Federal authorities will aggressively target any healthcare provider suspected of contributing to the epidemic.

2. Multiple Federal Agencies are Involved in the Federal Government’s Efforts to Combat Drug Diversion.

While the Drug Enforcement Administration (DEA) is the federal agency primarily responsible for enforcing the nation’s drug laws, the Department of Justice (DOJ), the Federal Bureau of Investigation (FBI), the Office of Inspector General (OIG), and various other agencies are involved in the government’s fight against drug diversion as well.

3. These Agencies are Targeting All Types of Healthcare Providers that Prescribe and Dispense Medications.

At this point, no healthcare provider is immune from being targeted based upon allegations of drug diversion. Pharmacists, physicians, nurses, physician assistants, and professionals and business owners are all being targeted.

4. Drug Diversion is a Federal Crime under the Controlled Substances Act.

Diverting prescription medications is a federal crime under the Controlled Substances Act (CSA). The CSA applies to all healthcare providers, including (but not limited to) those that are registered with the DEA.

5. A Criminal Conviction for Drug Diversion Can Lead to Substantial Fines and Long-Term Imprisonment.

Under the Controlled Substances Act, a conviction for drug diversion can result in a fine of up to $250,000 and up to 10 years of federal imprisonment for each individual offense.

6. Healthcare Providers Accused of Drug Diversion Will Often Be Targeted for Other Federal Offenses as Well.

In addition to being prosecuted under the Controlled Substances Act, healthcare providers accused of drug diversion will often face charges for healthcare fraud, mail fraud, wire fraud, money laundering, tax evasion, conspiracy, and other federal offenses as well.

7. There are a Number of “Red Flags” that Can Trigger Federal Drug Diversion Investigations.

During drug diversion investigations, federal agents are typically looking for a number of “red flags.” These include (but are not limited to) high volumes of opioid prescriptions, lack of patient records, and failure to consistently conduct in-person patient exams.

8. These “Red Flags” May or May Not Be Indicative of Federal Prescription Drug Fraud.

However, these “red flags” may or may not actually be indicative of drug diversion. In many cases, apparent evidence of drug diversion will simply be evidence of sloppy recordkeeping or other practices that do not rise to the level of criminal conduct.

9. Federal Drug Diversion Investigations Can Have Significant Consequences Even if They Do Not Lead to Formal Charges.

Even if a federal drug diversion investigation does not result in charges being filed, it can still have significant consequences. Publicity surrounding the investigation can result in loss of patients and significant harm to a healthcare provider’s professional reputation.

10. The DEA and Other Agencies Will Often Target Multiple Providers During a Single Drug Diversion Investigation.

In drug diversion investigations, it is common for the DEA, DOJ, FBI, OIG, and other agencies to target multiple providers. Typically, these agencies will be looking for evidence of a “conspiracy” focused on unlawfully profiting from the distribution of opioid medications or other prescription drugs.

11. Under the Federal Conspiracy Statute, All Providers Targeted in an Investigation Can Face Prosecution Even if Only One Provider Actually Diverted (or Attempted to Divert) Prescription Drugs.

One of the reasons why federal authorities pursue conspiracy allegations is because they can justify charges against multiple healthcare providers even if only one provider was directly responsible for diverting prescription medications. In conspiracy cases, all providers can face the same penalties regardless of the nature and extent of their role in the alleged criminal enterprise.

12. Physicians, Pharmacists, and Other Healthcare Providers Targeted for Drug Diversion Will Often Face Multiple Additional Charges.

In cases involving allegations of drug diversion and other forms of prescription drug fraud or healthcare fraud, each individual diversion or improper billing can lead to a separate charge, and the aggregate penalties for all charges can be insurmountable.

13. Failure to Monitor Patients Who Have Been Prescribed Opioids Can Lead to Charges for Drug Diversion.

A common allegation in federal drug diversion cases involves failure to adequately monitor patients who have been prescribed opioid drugs. This includes continually prescribing or dispensing opioids without conducting physical examinations to confirm ongoing medical necessity.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden



Lynette S. Byrd
Lynette S. Byrd

Former DOJ Trial Attorney


Brian J. Kuester
Brian J. Kuester

Former U.S. Attorney

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney

Local Counsel

John W. Sellers
John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara
Linda Julin McNamara

Federal Appeals Attorney

Aaron L. Wiley
Aaron L. Wiley

Former DOJ attorney

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (DOJ)

Chris Quick
Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow
Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

14. Known Issues Need to Be Addressed Proactively During the Federal Government’s Investigation.

For healthcare providers who are aware of potential issues regarding their prescription practices, proactively addressing these issues can be crucial to mitigating any potential exposure. However, this does not necessarily mean self-disclosing the issue to the DEA or another agency.

15. Drug Diversion Investigations Can Have Various Triggers, and Knowing What Triggered Your Investigation is Important.

From routine DEA audits and inspections to patient complaints and employee whistleblower claims, various factors can trigger a drug diversion investigation. Figuring out what triggered your investigation is one of the first steps toward executing a strategic defense.

16. If You Give Consent, the DEA Does Not Need a Warrant to Search Your Office or Pharmacy.

While the DEA must obtain a warrant to search your home, office, or pharmacy without your consent, if you consent to a search, a warrantless search is permissible and any evidence obtained can be used against you.

17. Drug Diversion Investigations Can Also Lead to Loss of DEA Registration, Loss of Medicare Eligibility, and Other Penalties.

In addition to the criminal penalties discussed above, drug diversion investigations can also lead to loss of DEA registration, loss of Medicare (and other benefit program) eligibility, civil monetary penalties (CMP), and disciplinary action by your state licensing board.

18. You are Entitled to Legal Representation at All Stages of the Federal Government’s Investigation.

In order to avoid the severe consequences that can flow from a federal drug diversion investigation, you need to engage experienced defense counsel. You are entitled to legal representation at all stages of the government’s investigation, and you should have your defense counsel conduct all communications with federal authorities on your behalf.

19. When Facing a Drug Diversion Investigation, Your Defense Efforts Should Focus on Pre-Charge Resolution.

While a drug diversion investigation can result in civil or criminal charges, it can also end without charges being filed. When defending against a drug diversion investigation, your focus should be on resolving the investigation without charges being filed.

20. There are Many Potential Defenses to Allegations of Drug Diversion and Other Federal Prescription Drug Crimes.

In order to avoid charges, there are a number of defense strategies you can use. From challenging the legality and constitutionality of the government’s investigative tactics to demonstrating that your prescription practices are fully compliant with the CSA, all options need to be explored.

21. Interacting with Federal Agents Without the Advice of Legal Counsel Can Be a Huge Mistake.

Federal agents are trained to solicit incriminating information, and answering agents’ questions directly can be a huge mistake. Even if you are 100% confident that you have not illegally diverted prescription medications, you need to let your defense counsel deal with the authorities on your behalf.

22. There are Other Mistakes You (and Your Employees) Need to Avoid During the Federal Government’s Investigation as Well.

In addition to communicating with federal agents, there are other mistakes you need to avoid during the government’s investigation as well. These include failing to preserve relevant records, continuing to engage in any unlawful prescription practices, and intentionally attempting to obfuscate potentially-incriminating information.

23. An Aggressive and Proactive Defense Strategy Can Be Crucial to Avoiding Unnecessary Consequences Due to a Drug Diversion Investigation.

Federal investigations can move quickly, and this means that executing an aggressive and proactive defense strategy can be crucial to avoiding unnecessary consequences. This starts with hiring federal defense lawyers who are experienced in defending healthcare providers against allegations of illegal drug diversion.

24. A Drug Diversion Investigation Can Have Far-Reaching Impacts in Your Professional and Personal Lives.

Beyond the potential for civil and criminal penalties, a drug diversion investigation can have other lasting and far-reaching implications as well. A federal investigation can damage your professional practice, and it can impact many aspects of your personal life as well.

25. Our Federal Healthcare Fraud Defense Lawyers are Available to Speak with You about Your Drug Diversion Investigation 24/7.

Our federal defense lawyers are available to represent healthcare providers in drug diversion investigations nationwide. If you have been subpoenaed, served with a search warrant, or contacted by federal agents, you can contact us 24/7 for a free initial consultation.

Speak with a Federal Healthcare Fraud Defense Lawyer at Oberheiden, P.C.

If you need legal representation for a federal drug diversion investigation, you can count on the highly-experienced federal healthcare fraud defense lawyers at Oberheiden, P.C. to protect you. To get started with a free and confidential consultation, call 888-680-1745 or tell us how to reach you online now.

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