State lawmaker facing additional charges for COVID-19 fraud scheme
SPRINGFIELD, Mo. – (DOJ) – Additional charges have been returned by a federal grand jury against an elected Missouri state representative for a nearly $900,000 COVID-19 fraud scheme, following her indictment last month for a separate fraud scheme in which she made false claims about a supposed stem cell treatment marketed through her clinics in southern Missouri, and for illegally providing prescription drugs to clients of those clinics.
Patricia “Tricia” Ashton Derges, 63, of Nixa, Missouri, was charged in a 23-count superseding indictment returned under seal by a federal grand jury in Springfield, Mo., on Tuesday, March 23. The superseding indictment replaces the original indictment returned on Feb. 1, 2021, and includes three new counts of COVID-19 fraud in addition to the original charges.
Derges, a Republican, was elected in November 2020 as a Missouri state representative in District 140 (Christian County). Derges, who is not a physician but is licensed as an assistant physician, operates three for-profit Ozark Valley Medical Clinic locations in Springfield, Ozark, and Branson, Mo. Derges also operates the non-profit corporation Lift Up Someone Today, Inc., with a medical and dental clinic in Springfield to serve the poor, homeless and uninsured.
Today’s indictment alleges that Derges fraudulently received $296,574 in CARES Act funds for Lift Up, although Lift Up did not provide any COVID-19 testing services to its patients. In fact, Lift Up’s medical clinic closed at the beginning of the COVID-19 pandemic and remained closed from March to June 2020.
Derges allegedly sought CARES Act funding for COVID-19 testing that had been provided, and already paid for, at her for-profit Ozark Valley Medical Clinic. According to the indictment, Derges requested reimbursement for $379,294 in COVID-19 testing and related expenses, and future funding in the amount of $503,350. In total, Derges applied for $882,644 from the CARES Act Relief Fund on Lift Up’s behalf.
Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020, which provided $150 billion to states, tribal governments, and units of local government. Missouri was allocated approximately $2.3 billion. Missouri allocated approximately $34 million in CARES Act funds to Greene County. To administer the CARES Act funds it received, the Greene County Commission created the CARES Act Relief Fund to “promote recovery by funding programs and services that support the needs of those impacted by the COVID-19 public health emergency.” An advisory council of 30 citizen volunteers was appointed to review funding requests and make funding recommendations to the Greene County Commission.
Derges claimed in her application to the Greene County CARES Act Relief Fund that Lift Up provided COVID-19 testing and she sought reimbursement for “COVID-19 eligible expenses” that Lift Up had incurred. To support her claim, Derges provided invoices totaling $296,574 from Dynamic DNA for more than 3,000 COVID-19 laboratory tests. Derges submitted the Dynamic DNA invoices as Lift Up expenditures, the indictment says, although they were actually for testing done at Derges’s for-profit Ozark Valley Medical Clinic.
Lift Up, a non-profit charity, and Ozark Valley Medical Clinic, a for-profit corporation, are separate legal entities. According to the indictment, Ozark Valley Medical Center had already received payment from its clients of approximately $517,000 for these COVID-19 tests. Ozark Valley Medical Center charged clients, patients, or their patient’s employer approximately $167 per sample for its COVID-19 testing services. Derges allegedly concealed from Greene County that these COVID-19 tests had already been paid for by other payors.
In December 2020, the Greene County Commission awarded Lift Up $296,574 in CARES Act funding based upon Lift Up’s fraudulent application and the Dynamic DNA invoices Derges had submitted. Derges deposited the check into Lift Up’s bank account, then transferred the funds into Ozark Valley Medical Center’s bank account.
Derges provided several more invoices from Dynamic DNA to Greene County later in December 2020 to further support her application for Lift Up, the indictment says, although the invoices were actually for testing done for clients at Ozark Valley Medical Center, raising the total to $589,143 for 6,177 COVID-19 tests. Derges allegedly concealed from Greene County that Ozark Valley Medical Center already had been paid approximately $1 million by clients, patients, or their patients’ employers, for these COVID-19 tests.
Ozark Valley Medical Center’s COVID-19 testing services were a financial boon for the corporation, according to the indictment. Between January 2015 and May 19, 2020, Ozark Valley Medical Center’s daily bank account balance never exceeded $50,000. On Sept. 22, 2020, for example, the daily bank account balance was over $345,000.
Wire Fraud Scheme
The superseding indictment contains the original eight counts of wire fraud related to a nearly $200,000 fraud scheme, which lasted from December 2018 to May 2020. Derges allegedly marketed a stem cell treatment that actually utilized amniotic fluid that did not contain any stem cells.
The Controlled Substances Act
The superseding indictment contains the original 10 counts of distributing Oxycodone and Adderall over the internet without valid prescriptions. The indictment alleges that Derges, without conducting in-person medical evaluations of the patients, wrote electronic prescriptions for Oxycodone and Adderall for patients and transmitted them to pharmacies over the internet.
The superseding indictment contains the original two counts of making false statements to federal agents investigating this case in May 2020.
In addition to the criminal charges, the indictment contains a forfeiture allegation, which would require Derges to forfeit to the government any property derived from the proceeds of her alleged fraud schemes, as well as a money judgment representing the proceeds Derges obtained through the fraud schemes.
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