Prosecutors: Melgen’s lawyers may have conflict in fraud case

Updated Feb 16, 2016

Federal prosecutors are asking U.S. District Judge Kenneth Marra to investigate attorneys who are representing Palm Beach County ophthalmologist Dr. Salomon Melgen to determine whether they should be barred from defending the physician on charges that he bilked Medicare out of as much as $105 million.

At the same time, Melgen’s attorneys are blasting federal prosecutors, claiming they are misrepresenting a practice that is common among eye doctors to try to turn the respected 61-year-old physician into a criminal. Further, attorneys Matthew Menchel and Kirk Ogrosky claim, prosecutors improperly inflated allegations that were, at worst, a $125,000 misdeed into a $105 million fraud simply “to shock and inflame the jury against Dr. Melgen.”

The dueling motions were filed late Friday in a case that has largely been dormant for months.

Days before he was charged last year with health care fraud, Melgen was indicted in New Jersey on corruption charges with his longtime friend, U.S. Sen. Robert Menendez, forcing his attorneys to battle federal prosecutors on two fronts.

On Feb. 29, lawyers representing Menendez will ask a federal appeals court in Philadelphia to dismiss the 22-count indictment against the long-serving New Jersey Democrat. He claims he accepted gifts and campaign contributions from Melgen because the two were friends not in return for political favors.

Meanwhile, prosecutors in West Palm Beach claim a conflict of interest may prevent Menchel and Ogrosky from representing Melgen on 76 charges that he bilked Medicare by intentionally mistreating hundreds of patients for age-related macular degeneration at clinics in West Palm Beach, suburban Delray Beach, Wellington and Port St. Lucie.

Menchel and Ogrosky also represented Melgen in a civil lawsuit that involves many of the same issues that spurred criminal charges to be filed against him, prosecutors said in their 17-page motion. One of the key claims against Melgen is that he used a single vial of the drug, Lucentis, to treat multiple patients, a practice known as multi-dosing. Yet, prosecutors claim, he billed Medicare as if he used a single vial on each patient.

Since Melgen continued the practice after the U.S. Department of Health and Human Services questioned it and ordered him to return $9 million, he could claim Menchel and Ogrosky told him it was OK. If that’s the case, the two lawyers could become witnesses in the criminal trial, prosecutors wrote.

Even if they aren’t called to testify, Melgen’s attorneys could fail to vigorously represent him for fear of exposing their own involvement, the prosecutors wrote.

While Melgen may opt to keep the same attorneys, his second legal team since his arrest, prosecutors said Marra should investigate the possible conflicts. At least, they said, Marra should make Melgen agree that his defense won’t rest on arguments that the multi-dosing was authorized by his attorneys.

Ogrosky declined comment on the allegations, saying only that he and Menchel would respond to them in court papers.

In the defense attorneys’ motion asking Marra to toss out the indictment against Melgen, they criticized prosecutors for allegedly misrepresenting many of the facts in the case. They asked Marra to let them pierce the secrecy of the grand jury and allow them to look at what they called “prejudicial and erroneous testimony” that may have swayed grand jurors to indict Melgen.