Former Georgia insurance commissioner sentenced to prison after pleading guilty to health care fraud

A federal judge on Friday sentenced former Georgia Insurance Commissioner John Oxendine to serve three-and-a-half years in prison after Oxendine pleaded guilty to conspiracy to commit health care fraud.

U.S. District Judge Steve Jones had one question for the 62-year-old Republican, who was elected four times to the office before mounting a failed run for governor:

"Why?"

As Jones noted at a hearing in Atlanta, Oxendine only personally gained $40,000 from the scheme, although Jones ordered him to pay a $25,000 fine and to share in $760,000 in restitution with Dr. Jeffrey Gallups, who pleaded guilty to health care fraud before he could even be indicted.

Oxendine answered that he is “too much of a pleaser” and said he was trying to make his client Gallups happy.

That meant that Oxendine stood up before doctors who worked for Gallups at a September 2015 meeting at a Ritz-Carlton hotel in Atlanta and urged them to order unnecessary medical tests on patients and bill insurers, Oxendine said. It also meant Oxendine devised a plan to collect $260,000 in kickbacks from medical testing company Next Health through his consulting firm and funnel most of the money to Gallups, prosecutors said. Oxendine paid a $150,000 charitable contribution and $70,000 in attorney’s fees on Gallups′ behalf, prosecutors said.

Oxendine noted that his father, who was legally blind, served as a Gwinnett County judge. But Oxendine said he had betrayed his own duties as a lawyer.

“I chose to be blind, but it was my own doing,” Oxendine told the judge. “I just sat there; I shut my eyes. I was blind to my actions and the consequences, how other people would suffer."

Defense attorney Drew Findling asked Jones to sentence Oxendine to no more than two-and-a-half years, compared to the 3 years and 8 months prosecutors sought. Findling argued Oxendine should serve no more time that Gallups, who was sentenced to three years in 2021. Gallups is now asking for his imprisonment to be reduced because he made secret recordings as evidence against Oxendine.

About 60 people submitted letters seeking mercy for Oxendine, including family members, lawyers, former U.S. Rep. Bob Barr and insurance commissioners from other states.

“I know John regrets the choices he made," Ivy Oxendine, his wife, told Jones through tears. "They were his choices that brought him here today. He has expressed remorse to me and his children.”

But prosecutors said Oxendine misused his position as an attorney and his political “sway” from his four terms as insurance commissioner to commit fraud.

“He should have stopped the scheme instead of designing it," said Assistant U.S. Attorney Christopher Huber. “He should have reported the kickbacks instead of collecting them.”

Huber noted that the scheme hurt not only insurers, but patients, including one who got an $18,000 bill.

Prosecutors have said Oxendine told Gallups to falsely tell a compliance officer at Gallups' company that the payments from Oxendine were loans. Oxendine told Gallups to repeat the lie when questioned by federal agents, prosecutors said. And they said Oxendine falsely said he didn’t get money from Next Health when interviewed by The Atlanta Journal-Constitution.

Jones said Oxendine discarded his political pledge to advocate for the ”little guy.”

“In this situation, you weren’t helping the little guy,” the judge said. “You were hurting the little guy.”

Jones did show some mercy, dropping prosecutors' requested $700,000 fine to $25,000. And after Huber told Jones that Gallups has paid $197 toward the $760,000 in shared restitution, Jones pledged Gallups would face scrutiny on his payments. Oxendine made an initial $100,000 payment toward the sum on Friday.

Gallups separately owes $5.4 million after a whistleblower filed a lawsuit saying Gallups defrauded the federal government through the Next Health scheme and a kickback scheme with a separate medical device company.

Oxendine ran for governor in 2010 but lost the Republican primary. The Georgia Ethics Commission began investigating campaign finance violations in 2009, alleging Oxendine illegally used campaign funds to buy a house, lease luxury cars and join a private club.

Oxendine settled that case with the commission in 2022, agreeing to hand over the remaining $128,000 in his campaign fund while admitting no wrongdoing.

He was also accused of accepting a $120,000 bundled contribution, 10 times the legal limit, from two Georgia insurance companies when he was running for governor. A judge ruled state officials waited too long to pursue Oxendine on those charges.