West Virginia Doctor Probed Over Workers’ Compensation Prescriptions

April 6, 2010

Investigators have seized a small fortune from a Mingo County, West Virginia doctor in a case that parallels last month’s raid of a Williamson pain clinic, court filings show.

The U.S. District Court papers disclose that prosecutors are negotiating a plea deal with the physician, Dr. Diane Shafer. They suspect her of the same improper pill prescriptions that led to the March 2 search of the Mountain Medical Care Center.

A state-federal probe tracked hundreds of people who entered the storefront clinic daily, paid between $150 and $450 cash, and left with pain drug prescriptions. No charges have been filed, and a lawyer for the clinic’s office manager says it treated legitimate patients.

One court filing alleges Shafer’s illegal activities yielded more than $1.36 million last year alone. The emerging federal case against her could end a medical career that has often brought her unwelcome headlines over the past several decades.

Shafer, 57, has repeatedly run afoul of the licensing boards in both West Virginia and Kentucky over her prescribing practices and treatment of workers compensation patients, among other reasons. She was convicted of bribery in 1993 after secretly marrying and giving $42,500 to the Kentucky official overseeing one of those ethics cases, which he then had dismissed. Her conviction was later overturned.

More recently, Shafer turned to politics. After running for West Virginia’s Legislature as a Democrat in 1996, 1998 and 2002, she switched to the GOP. Following a failed 2004 House of Delegates bid under that banner, she was elected to the Republican State Executive Committee in 2006. She also is the state GOP’s top individual donor this election cycle, giving a total of $9,000, according to Federal Election Commission reports.

Shafer could not be reached for comment last Friday. The court filings and West Virginia Board of Medicine records show she surrendered her license in that state in December. She is still listed as president of Mingo County’s chapter of the state medical association.

The federal court papers reveal that investigators pursued at least a dozen other search or seizure warrants the day they raided the Williamson clinic. They targeted the homes of its two main doctors, William Ryckman and Katherine Hoover, and of office manager Myra Miller as well as bank accounts, a safety deposit box and Hoover’s 2007 BMW convertible.

The filings show the FBI also searched a Williamson apartment shared by Hoover and Shafer, and obtained separate warrants for each of their locked bedrooms. Agents confiscated nearly $91,000 in cash from Shafer’s bedroom.

While seeking the warrant for Shafer’s bedroom, prosecutors disclosed an earlier, January raid of Shafer’s bank holdings that yielded more than $500,000 in cash and valuables. About half that haul consisted of stacks of $100 bills found in one of her safety deposit boxes, the records said.

That seizure followed an early December search of Shafer’s Williamson medical office. There, investigators found at least 75 prewritten prescription forms, which are illegal in West Virginia, the filings said.

“The condition of Dr. Shafer’s office during the execution of the search warrant indicated that it would be physically impossible for her to utilize her examining tables,” FBI Special Agent James Lafferty said in a sworn statement following the search. “She indicated that she examined her patients ‘at another location.”‘

Shafer had issued 188,445 controlled substance prescriptions since December 2002, including at least 17,065 in 2009, Lafferty’s affidavit said. He also cited evidence suggesting she saw nearly as many patients daily as the Mountain Medical clinic.

That evidence included photos taken by “an individual concerned with activity at Dr. Shafer’s office” the month it was searched, the affidavit said. The photos showed a line of people waiting to see Shafer that reached the sidewalk and stretched down the street, with as many as 30 people waiting outside, Lafferty wrote.

Lafferty also referred to evidence against Lisa K. Baisden, a staffer at Shafer’s office who pleaded guilty March 17 to a prescription fraud-related charge. Her plea agreement with prosecutors requires her to cooperate with investigators.

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