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The New DEA Drug Report: Drug Cartels, Doctors, and Health Care Fraud

The 2016 National Drug Threat Assessment Report from the Drug Enforcement Administration has been released. The biggest problem: controlled prescription drugs. 

This month, the latest annual report from the Drug Enforcement Administration (DEA) has been released.  It’s filled with information concerning illegal drugs like heroin and street drugs like synthetic marijuana.

Read the complete 2016 National Drug Threat Assessment Summary here (194 pages, pdf format).

Look close.  You will find the biggest drug threat remains Controlled Prescription Drugs (“CPDs”), which are pain medications like oxycodone.  So what is the answer to that drug threat?  Apparently, health care fraud prosecutions are a tool for prosecutors going after CPDs.

And what about Dallas?  CPDs are considered a “high drug threat” by the local DEA Office. 

Here are the details:

1.  This is the Federal Government’s “Strategic Assessment” of Major Drug Threats

First things first, what is the DEA Report?  It is the federal government’s annual report on criminal drug activity in the United States.

What does federal law enforcement view as the big drug crimes (and criminals)?  This report explains their position – and Texas (including Dallas) figures prominently in it.  It’s got drug cartels and street gangs, marijuana and cocaine and pain pills.

Why do it?  From its Executive Summary, we know this report compiles analyzed data collected by the DEA as a means of understanding the “… threat posed to the United States by the trafficking and abuse of illicit and prescription drugs.”

We’re told that both (1) street drugs and (2) prescription drugs are included in the DEA Report.  And we’re told that the data used in the federal analysis is effective through August 2016.

Where’d the data come from?  It is based not only information provided by federal, state, and local law enforcement agencies, but info from public health organizations, “intelligence from other government agencies” (whatever that means), and news reports.

The goal:  figuring out what “substances represent the greatest drug threat to the United States” for the purpose of arrest and prosecution.

According to the DEA summary, the major drug threats are:

(1) “The tripartite opioid threat” (controlled prescription drugs, fentanyl, and heroin);

(2)  The methamphetamine threat;

(3) The cocaine threat;

(4) Marijuana (legalization and enforcement issues); and

(5) Drug poisoning deaths.


2.  The Major Players: Drug Cartels and Doctors

So, who’s responsible for these drug threats?  The DEA Report identifies the major manufacturers and distributors of these drugs.

It identifies “Transnational Criminal Organizations” (TCOs) as the major suppliers of “illicit substances” and breaks them down by region.  Along with this breakdown, the various gangs who work with the TCOs in the United States.  The gangs “commit violent crimes and serve as retail-level drug distributors for TCOs.”

What about prescription drugs?  The DEA Report classifies them as “controlled prescription drugs” (CPDs).  Together with heroin and fentanyl, CPDs are considered the “…most significant drug threat to the United States.”   More about the sources of prescription drugs later.

A.  Mexican Drug Cartels

The federal government considers the Mexican Drug Cartels (TCOs) as the “greatest criminal drug threat to the United States.”  They run “lucrative smuggling corridors across the U.S. Southwest Border (SWB),” importing “multi-ton quantities of illicit drugs” for distribution here.  The Mexican Drug Cartels market in heroin, methamphetamine, cocaine, marijuana, and fentanyl.

Which Mexican Drug Cartels are operating in Texas?  The Report lists: Sinaloa, Los Zetas, Gulf, Juarez, Las Familia Michoacan, La Linea, and Los Caballeros Templarios.

B. Other Drug Cartels

Other countries are also mentioned:  Columbia supplies cocaine to the Mexican Drug Cartels; Dominican TCOs and Asian TCOs work to supply drugs to a lesser extent, as well.

C. Gangs

There are different kinds of gangs, but for the most part the DEA Report lumps them all together.  There are street gangs, for instance, as well as outlaw motorcycle gangs (“OMGs” in the DEA Report).  It’s known that there is a growing business relationship between the Mexican Drug Cartels and the American Gangs.  The gangs work to distribute the products provided by the Mexican Drug Cartels.

What Gangs are operating in Texas? The Report lists: the Almighty Latin King and Queen Nation (Latin Kings), Aryan Brotherhood Texas, Barrio Azteca, MS-13, Tango Blast and Tango Cliques, Texas Mexican Mafia, and Texas Syndicate.

D. Doctors

They don’t list “doctors” in a separate category in the DEA Report. Instead they discuss “Controlled Prescription Drugs” and reference studies done by the Centers for Disease Control and Prevention (CDC), showing around 52 deaths per day from prescription pain medication overdoses.

It’s stated that the abuse of CPDs happens more that the use of cocaine, heroin, methamphetamine, MDMA, and phencyclidine (PCP) combined.

Notice, however, that these are prescribed drugs.  This means those who are writing those prescriptions are also suppliers here.

3.  Follow the Money:  Money Laundering

What about all that profit?  Most of it is in cash.  It’s reported that the Dallas-Fort Worth area is a prime location for illicit financial activities in the United States.

Here, according to the DEA Report, sales revenue from drugs sold in the United States is collected and processed for return to the Mexican Drug Cartels who have manufactured the drugs and/or provided them for distribution.

There are “local stash houses” where “bulk currency” is stored and then processed for transport over the border.  How is this done?  By all sorts of inventive ways, you’ve seen the news stories of money being found hidden inside car doors, etc.  One big method of moving lots of cash: local Money Service Businesses.

In 2015, it’s reported that $41,486,676.00 was seized by federal authorities in bulk currency that was being smuggled back into Mexico.   It’s not known how much bulk currency was successfully transported without discovery.  The Treasury Department estimates U.S. drug sales gross revenue annually of $64 Billion.

4. Controlled Prescription Drugs: The Big Threat

The DEA Report acknowledges that the biggest drug threat in the United States today is the abuse of prescription pain medications.

Counterfeit Pain Pills

The Report discusses fentanyl being placed into “counterfeit prescription pills” which “leads to overdose incidents.” Another problem with “counterfeit prescription pills” is the pressing of synthetic cannabinoids into pills that are “new psychoactive substances” made with chemical formulas that create “new, unregulated and unscheduled drugs.”

Gangs are also identified as being in the business of interstate distribution of prescription drugs alongside heroin and crack cocaine.   However, the biggest problem regarding pain medications are those that involve prescription painkillers.

Prescription Pain Pills

The DEA Report states that “drug overdose deaths have become the leading cause of injury in the United States.”  That’s including ALL forms of injury (like car crashes).  The majority of DEA Field Offices list CPDs (controlled prescription drugs) as one of their top drug threats.

The Dallas DEA Field Office reported that CPD availability in its jurisdiction was “high” in 2015.

Where are these prescription pills coming from?  The top five Schedule I-II CPDs are distributed nationwide at the retail level (hospitals, pharmacies, practitioners, and teaching institutions). (See, Figure 28 in the Report.)

So what is being done by the federal government to deal with the CPD drug threat?  The DEA reports that there are administrative actions as well as criminal investigations into CPDs, based in part upon violations of the Controlled Substances Act.

But here is the key insofar as doctors and physicians: it’s connected to prosecutions for Health Care Fraud.

From the DEA Report, page 38-39:

Unscrupulous physicians and pharmacists, and doctor shoppers add to the health care burden in the United States. Corrupt pharmacists contribute to burgeoning health care costs in the United States by over-billing patients to increase their profits or even colluding with physicians to gain patients.

Across the country, corrupt physicians accept cash payments from patients without providing them proper examinations, and some file erroneous or fraudulent claims with private insurance companies and Medicare/Medicaid.

Insurance fraud on part the of pharmacists, physicians, and doctor shoppers taxes the insurer’s resources, which in turn contributes to increases in premiums and costs for legitimate insurance holders who have to recoup the damages done by fraud.

Will We See an Increase in Health Care Fraud Prosecutions Designed to Stop Controlled Prescription Drug Sales?

For doctors and health care providers in Dallas, Fort Worth, and the rest of Texas, here are some questions:

  • Should we read the DEA Report as a suggestion that federal prosecutions will be using felonies based upon health care fraud as a means to curtain prescription drug medications being misused by patients (or their friends or family members)?
  • If there is a drug overdose caused by a prescription pain medication, will that be the beginning of an investigation into health care fraud charges?
  • And if so, will they add money laundering charges as well?  Doing so allows for forfeiture actions, where all sorts of property can be seized.

It’s something to think about, isn’t it?  Given that the United States has more people dying of prescription drug overdoses than ANY OTHER KIND OF INJURY, something is going to happen to fight this epidemic.

Something to think about.


For more information, check out our web resources as well as Michael Lowe’s Case Results and his article, “Arresting Texas Doctors for Health Care Fraud: What You Need to Know.”


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